TWN Info Service on WTO and Trade Issues (Jul19/01)
1 July 2019
Third World Network

South countries establish “common platform” on WTO reform

Published in SUNS #8930 dated 21 June 2019

Geneva, 20 Jun (D. Ravi Kanth) – Trade envoys from 38 developing countries, at a retreat on Wednesday (19 June) in Geneva, decided to establish a “common platform” for pursuing an “inclusive” and “developmental” agenda in the ongoing discussions on “reforms” at the World Trade Organization, several trade envoys told the SUNS.

“From New Delhi to Geneva, we have established a platform for developing countries to discuss reforms of the WTO from a developmental perspective,” said China’s trade envoy Ambassador Zhang Xiangchen, who hosted the day-long retreat at the Inter-Continental Hotel in Geneva on 19 June.

“There are many groups in this town, but this is a developing country group,” he emphasized. “Being the biggest group at the WTO, we want to pursue reforms with development dimension,” he said, according to a trade envoy, who asked not to be quoted.

The developing countries, said Ambassador Zhang, “want to protect the core values of the WTO such as non-discrimination and special and differential treatment” while safeguarding “our offensive and defensive interests,” according to the participant.

Trade envoys from India, South Africa, Indonesia, Malaysia, Jamaica, Pakistan, Honduras, Brazil, Argentina, Uganda, Benin, and Turkey among others concurred with Ambassador Zhang about the urgent need to provide a “counter-narrative” from developing countries for bringing about “inclusivity” and the “developmental dimension” in the multilateral trading system and the WTO.

Notwithstanding the differences among “some of us on the issues at the WTO such as the controversial plurilateral negotiations on electronic commerce, investment facilitation, and disciplines for micro, small, and medium enterprises, the developing countries want the conclusion of the unfinished “Doha Development Agenda” (DDA) negotiations and “reforms” to address the specific concerns of the developing countries,” he said.

China, he said, would like to play its part, as a follow-up to the discussions in New Delhi, for establishing a solid developing country platform.

Discussions at the day-long retreat centered on “WTO Reform to Enhance Development Dimension”, “Transparency and Procedural Reforms”, “On-going Negotiations and Discussions (on fisheries subsidies, e-commerce, and investment facilitation)” and “US-EU-Japan Trilateral Joint Statements and Implications to Developing Countries.”

During the first session on “WTO Reform to Enhance Development Dimension,” the two panelists – Ambassador J S Deepak of India and Richard Kozul-Wright, Director of the Globalization and Development Strategies Division at the United Nations Conference on Trade and Development (UNCTAD), presented their assessments on how to enhance the development dimension in the multilateral trading system and the World Trade Organization.

Ambassador Deepak said 17 trade ministers from developing countries had decided last month (see SUNS #8907 dated 15 May 2019) to work “collectively” for strengthening the WTO while advancing the development dimension in the WTO reforms.

Expressing concern over the “one-sided narrative” in the reform proposals tabled by the United States and other major developed countries, he said there is an urgent need for developing and least-developed countries to “join forces” for safeguarding the core values and objectives of the WTO, particularly the consensus-based rule-making, non-discrimination, and special and differential treatment (S&DT) for developing countries.

He circulated a concept paper that India has prepared after discussion with several developing countries, the WTO Centre in New Delhi and the South Centre.

The six-page concept paper calls for amending “laws and regulations of WTO members” which mandate unilateral action on trade issues.

It says that “rules in the Marrakesh Agreement are fundamental and must be respected.”

“Multilateral avenues, based on consensus, remain the most effective means to achieve inclusive development- oriented outcomes”; and “provisions governing plurilateral agreements in the Marrakesh Agreement must be adhered to – if they are to be multilateral agreements, the outcomes of these initiatives (the so-called Joint Statement Initiatives on electronic commerce, investment facilitation, disciplines for MSMEs, and disciplines for domestic regulation in services),” by way of new rules can only be introduced into the WTO when there is consensus,” the concept paper emphasized.

Ambassador Deepak said “new multilateral agreements need to be based on the Doha work program and the ministerial mandates of the Bali, Nairobi, and Buenos Aires meetings”.

He suggested that negotiating new trade agreements is futile without resolving the systemic crisis at the Dispute Settlement Body, particularly the Appellate Body.

He praised China for its initiative to develop a counter-narrative to the proposal presented by the United States for bringing about differentiation/graduation for curtailing special and differential flexibilities to 34 developing countries in the current and future trade negotiations.

The concept paper, said Ambassador Deepak, has laid the immediate priorities for reform at the WTO. They include:

* Resolving the crisis in the Appellate Body;

* Addressing the unilateral actions taken by some Members.

Any reforms must:

* Keep development at its core through delivering on the long-promised development concerns, in particular the outstanding development issues of the DDA; as well as address the asymmetries in WTO Agreements such as those in Agriculture and other areas;

* Strengthen the multilateral character of the WTO, especially preservation of consensus decision-making and respecting Art. X of the Marrakesh Agreement on Amendments;

* Continue with the on-going multilaterally mandated negotiations;

* Last but most importantly, reform must reaffirm the principle of Special and Differential Treatment, which is a treaty-embedded, non-negotiable right for all developing countries in the WTO; and promote inclusive growth, widening spaces for states to pursue national development strategies in the broad framework and principles of a rules-based system.

In her comments on Ambassador Deepak’s presentation on enhancing the development dimension in the global trade, South Africa’s trade envoy Ambassador Xolelwa Mlubi-Peters said the concept paper has clearly laid out the immediate priorities for developing countries to pursue at the WTO.

She said South Africa will issue a paper on what ought to be transparency and notification improvements from the perspective of the developing countries.

During his presentation on what ought to be the development dimension in global trade, Richard Kozul-Wright said that developing countries are facing a common set of challenges, which stem from the imbalanced and asymmetrical Uruguay Round agreements.

The “muted” celebrations of the 25th anniversary of the (conclusion of the) Uruguay Round this year is an indication that it was not development-friendly for developing countries, even though the developed countries projected it as development-friendly.

Kozul-Wright demolished the arguments advanced by the European Union and other developed countries for enhancing transparency and notification requirements, saying that they are “bait-and-switch” for advancing “dangerous” reforms for curtailing the “policy space” for developing countries to pursue industrial development.

Kozul-Wright urged the developing countries to vigorously pursue policies based on “catching-up” policies to overcome their structural and other problems, policies that he said the developed countries had followed for several centuries.

During the discussion on electronic commerce and the plurilateral negotiations pursued by developed and some developing countries, India’s trade envoy Ambassador J S Deepak challenged the need for framing rules in e-commerce.

He said the Joint Statement Initiative strikes at the very roots of the multilateral negotiations being conducted under the 1998 work program.

The Indian envoy warned against the plurilateral negotiations on e-commerce, saying they are aimed at bringing the rules from the failed Agreement for Trans-Pacific Partnership.

China, which has joined the JSI group in January, expressed concern over data flows and removal of restrictions on the foreign servers for storing data, said a trade envoy, who asked not to be quoted.

The Chinese envoy suggested that if the plurilateral negotiations on e-commerce are not balanced then Beijing could walk out of the process, according to another trade envoy, who asked not to be quoted.

On investment facilitation, South Africa’s trade envoy Ambassador Xolelwa said it is not clear why investment facilitation has to be taken up at the WTO, which is a multilateral body for trade rules.

She challenged the proponents that if they are seeking best practices in investment facilitation, then the WTO is not the forum.

The WTO director-general Roberto Azevedo, who spoke at the retreat, said pursuing development through WTO reforms is extremely important.

WTO reforms and development are intrinsically linked, and without strong international trade rules there will be chaos, he argued.

He acknowledged that the crisis at the Appellate Body needs to be resolved without delay. However, members must work on other reforms as well, he said.

The “retreat” brought developing countries together to face the reform-related challenges collectively at the WTO, said several trade envoys who asked not to be quoted.