TWN Info Service on WTO and Trade Issues (Jul19/08)
3 July 2019
Third World Network

South propose inclusive approach to WTO transparency, notifications

Published in SUNS #8937 dated 2 July 2019

Geneva, 1 Jul (D. Ravi Kanth) – South Africa and India along with four other developing countries have proposed an “inclusive approach to transparency and notification requirements in the WTO [World Trade Organization]”, challenging the developed countries on whether they “comply with their notification requirements or do so selectively,” trade envoys told the SUNS.

As part of the WTO reforms, the six countries – South Africa, India, Cuba, Nigeria, Tunisia, and Uganda – stated unambiguously that “developing countries often struggle to comply with onerous obligations, while in many instances, developed countries also do not comply with their notification requirements or do so selectively.”

In their joint proposal (Job/CTG/15) circulated on 27 June, the six developing countries suggested far-reaching reforms concerning transparency and notification requirements from a “development-oriented” perspective, said a trade envoy, who asked not to be quoted.

It countered the joint proposal by the United States, the European Union, Japan, Canada, Australia, New Zealand, Argentina, Costa Rica, and Chinese Taipei (Job/GC/204/Rev.2 of 27 June) that called for punitive measures, including naming and shaming and financial penalties on countries failing to adhere to timely notifications.

Maintaining that the “capacity of developing countries to comply with notification obligations is inextricably linked with their level of economic development and access to resources,” the six countries reminded the developed countries that “notifications require a deep understanding of the entire range of WTO agreements, mature institutional mechanisms and human resource capacities that are often lacking in developing countries.”

Any work in this area should be on “supporting and incentivizing developing countries to address these difficulties, especially as it relates to transparency obligations,” the six countries said, adding that “existing notification obligations should be rationalized so that they are commensurate with Members’ level of development.”

In effect, developing countries, small and vulnerable economies (SVEs) and least-developed countries cannot be burdened with notification obligations that are beyond their capacities, the six countries maintained.

Without naming the recent proposal by the US and its allies that seeks to impose “new or strengthened notification obligations,” the joint proposal by South Africa, India, Cuba, Nigeria, Tunisia, and Uganda said categorically that “if developing countries are not able to meet current notification obligations, there would be no possibility of meeting even higher notification requirements in [the] future.”

The six developing countries expressed grave concern “about the ongoing activities in the regular bodies that seem to increase transparency obligations under the guise of efficient rationalisation of notification procedures and formats.”

They cited the following examples to show how transparency obligations are being increased:

* Committee on Rules of Origin (CRO): Where Switzerland continues to negotiate outcomes on transparency in non-preferential rules of origin. Document G/RO/W/182 remains subject to various concerns raised by developing country Members.

* Committee on Market Access: Transparency in applied rates (Russian Federation proposal JOB/MA/138) is of great concern as it increases the burden of notification.

Transparency, the six countries argued, “cannot only be seen from the view of notification obligations”, and “it should permeate the full spectrum of the operation of the WTO, from its day-to-day meetings, as well as Ministerial Conferences.”

At a retreat of developing countries on 19 June, Richard Kozul-Wright, the Director of the Globalization and Development Strategies Division at UNCTAD, had warned that the transparency debate is a “bait-and-switch” attempt for denying “policy space” to the developing countries.

The six developing countries said that while there is a need for complying with transparency and notification obligations under the Marrakesh Agreement that established the WTO in 1995, it is also important to recognize that “the obligation to comply is not blind to the situation that a particular Member or groups of Members may find themselves in.”

The six developing countries cited the discussion that took place in the Working Group on Notification Obligations and Procedures in 1996 where “some developing country participants pointed out that in view of the ever-increasing workload, combined with limited resources in the small delegations, they had great difficulty in advising their governments on all aspects of the notifications required.”

According to the report of the Working Group on Notification Obligations and Procedures of 1996, “many developing countries had difficulty understanding the frequently complex and highly technical information demanded, and therefore faced a prohibitive task in providing complete responses to the notification requirements and formats.”

“While they recognized that these notifications were part of their Membership obligations and they were prepared to respond to the maximum of their abilities, there were serious constraints to what they could achieve due to their limited resources.”

Further, the Working Group’s observations which were adopted by the Council for Trade in Goods and the Committee on Trade and Development include: “the development of a special programme of assistance to developing country Members and particularly to the least-developed country Members providing more intensive technical assistance, possibly with the participation of other organizations, focusing on the development of systems and structures required to respond to notification obligations”.

In contrast, the transparency proposal by the US and its allies “pre-supposes the causes and remedies for non-compliance and proposes increased notification obligations rather than addressing developing countries’ difficulties in complying with these obligations,” the six developing countries argued.

They urged the proponents seeking enhanced notification obligations to provide “empirical evidence” and also demonstrate that “their remedies are tailored to address the problems developing countries encounter in this area.”

Against the backdrop of growing resource constraints, “developing countries cannot agree to any transparency obligations which go beyond existing obligations,” the six countries maintained.

South Africa, India, Cuba, Nigeria, Tunisia, and Uganda rejected the “punitive approaches to enforce notification and transparency obligations”, emphasizing that “any work in this area must support developing countries’ ability to address their difficulties through inclusive and mutually agreed approaches, such as through simplified notification formats.”

The six countries called for “prolonged time-frames” in which “technical assistance and capacity building must be central components.”

“Flexibilities must be provided to developing countries, SVEs and LDCs in relation to existing notification obligations so that they are commensurate with their levels of development,” the six countries argued.

More important, the six countries said that “notifications can only be made by the concerned Member and no counter-notifications will be valid.”

“Neither the Secretariat or any other Member of the WTO shall have the right to notify information on behalf of another Member unless this possibility has been provided for in existing agreements,” the six developing countries said.

“It is also important to preserve the international character of the WTO Secretariat by ensuring that it takes no positions relative to approaches advanced by Members,” the six developing countries maintained.

The WTO Director-General Roberto Azevedo and the Secretariat, for example, are openly assisting the controversial plurilateral Joint Statement Initiatives on electronic commerce, the domestic regulation for services, disciplines for micro, small, and medium enterprises, investment facilitation and trade and gender, said a trade envoy, who asked not to be quoted.

“These illegal and anti-multilateral practices must be stopped as part of the WTO reforms,” the envoy said.

In their proposal, the six developing countries also expressed concerns about the “insufficient information” provided by the developed countries in their notifications.

The developing countries suggested improving agriculture notifications by calling on “members with Final Bound AMS commitments” to provide their final notification no later than 120 days following the end of the year.

The developed countries take up to two years or more to submit these notifications.

The six developing countries also called for improvements in notifications concerning GATS (General Agreement on Trade in Services), suggesting that “developing countries, and especially least developed countries, have submitted more notifications under the GATS than some developed countries.”

South Africa, India, Cuba, Tunisia, Nigeria, and Uganda pointed a finger at some developed countries who undermined “their WTO commitments or have not implemented them in the spirit in which such commitments were made,” especially in GATS Mode 4.

“We, therefore encourage developed Members to regularly notify existing and new measures which significantly affect their mode 4 commitments,” the six countries said.

The six proponents also said that developed countries have not complied with Article 66.2 of the TRIPS Agreement that requires “developed country Members to provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least-developed-country Members in order to enable the creation of a sound and viable technology base.”

“Developed countries have a positive legal obligation to provide incentives to enterprises and institutions in their territories to promote and encourage technology transfer to least-developed countries (LDCs),” the six countries argued.

But, “for the longest time, LDCs have demanded that this requirement be made more effective,” they noted.

“More transparency in this area would be supportive of LDCs’ efforts to build a viable technological base,” the six countries pointed out.

Worse still, the developed countries are required to comply with “Paragraph 39 of the Ministerial Declaration of 18 December 2005 [that] requires that WTO Members agree to amend the TRIPS Agreement to establish an obligation for Members to require patent applications to disclose the origin of biological resources and/or associated traditional knowledge, including Prior Informed Consent (PIC) and Access to Benefit Sharing (ABS).”

“Non-disclosure of such resources severely effects developing countries’ efforts at improving substantive examinations and in assuring the integrity of determinations under traditional intellectual property legal requirements, in providing greater certainty as to the validity of granted rights or privileges,” the six countries argued.

Little wonder that “traditional communities are severely affected by unlawful appropriation of biological resources and/or associated traditional knowledge,” the six countries argued.

“It would be useful to require WTO Members to make annual notifications on the number of patent applications based on traditional knowledge,” the six countries pointed out.

South Africa, India, Cuba, Tunisia, Nigeria, and Uganda demanded the developed countries to notify “ad valorem equivalents” of their opaque tariffs for agricultural products every year.

More importantly, the six developing countries said “transparency must permeate the operation of the WTO” so that the functioning of the inter-governmental trade body remains “transparent and inclusive.”

It is imperative that the functioning of the WTO must be improved according to the following markers. This includes:

* The scheduling of various committee meetings which often conflict. Thus, transparency issues arise as this practice limits the ability of developing country Members to effectively participate in important deliberations;

* The proliferation of informal open-ended negotiating meetings, for example, in fish and agriculture has made it impossible for small delegations to follow all the negotiations, disadvantaging these delegations. Further, this is not helped by the fact that these meetings are not minuted;

* How Ministerial Conferences are conducted on the basis of green room meetings in which most developing countries who are not invited are relegated to the position of effectively being “decision-takers”, and the processes that precede them in Geneva. Each WTO Member must be provided an equal opportunity in the decision-making process. Thus, meetings must be open to all, not only to some in Green Room processes;

* Language remains a fundamental constraint and a capacity issue for many delegations where their effective participation is dependent on translation.

In conclusion, the six countries brought the central issues that are plaguing the WTO for the past 25 years into the open.

They suggested that secrecy and top-down approaches that guide the WTO Secretariat must stop, as part of the reforms.