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TWN Info
Service on WTO and Trade Issues (Nov19/08) South
countries call for "policy space" in proposed WTO reforms Geneva, 12 Nov (D. Ravi Kanth) - Trade envoys from several developing countries have called for ensuring "policy space" in the proposed "reforms" at the World Trade Organization, which is facing a grave systemic crisis, with the dispute settlement system about to become dysfunctional. Many developing countries also pressed for developmental outcomes at the WTO's twelfth ministerial conference (MC12) in Nur Sultan, Kazakhstan, in June 2020. At a closed-door retreat convened by South Africa at the Wilson Hotel on Friday (8 November), trade envoys of India, South Africa, China, Bangladesh, Barbados, Benin, Egypt, Indonesia, Jamaica, Malawi, Malaysia, Oman, Turkey, Saudi Arabia, and Uganda among others spoke against attempts to undermine the special and differential treatment (S&DT) for developing countries. The trade envoys criticized approaches by the United States and other major developed countries such as the European Union and Japan to bring about "differentiation/graduation" among developing countries for availing S&DT, said participants, who asked not to be quoted. Trade envoys of India and South Africa - Ambassador J S Deepak and Ambassador Xolelwa Mlumbi-Peter respectively - called for a "developmental perspective" in WTO reforms based on ensuring "policy space" for pursuing development-friendly policies in trade and industry. In separate interventions, the two countries cautioned about attempts to change the approach to S&DT, insisting that developing countries must strive for accomplishing the development objectives as embedded in the Doha Development Agenda. Trade envoys from Argentina, Bangladesh, Barbados, Benin, Brazil, Central African Republic, China, Egypt, Guatemala, Indonesia, Jamaica, Kazakhstan, Kenya, Malawi, Nigeria, Oman, Saudi Arabia, Turkey, India, Chile, Paraguay, and Uruguay took part in the day-long meeting at the Wilson Hotel. The former South African trade minister Rob Davies delivered the keynote address at the meeting. He provided a detailed account of how promises made in the Doha work program were not fulfilled, said a participant who asked not to be quoted. A day before the retreat, Davies had suggested that developing countries only succeeded in securing the title of the Doha work program, a la Doha Development Agenda. He lamented that the developing countries invariably lost out on substantive issues during the Doha negotiations. Davies had cautioned about agreeing to issues at the ministerial meetings that would have politically-binding effects. Davies had expressed sharp concern over attempts to undermine the S&DT for developing countries while hijacking the negotiations to include new issues. The former South African minister said the extension of the moratorium for not imposing customs duties on electronic transmissions would constitute a special and differential treatment for Google, Facebook, Amazon, Alibaba, and Microsoft among others. In a session on "reflections on the multilateral trading system and priorities for developing countries," Richard Kozul-Wright, the Director of the Globalization and Development Strategies Division at the United Nations Conference on Trade and Development (UNCTAD), spoke about the urgent need for "policy space" to pursue credible and sustainable policies for industrialization, particularly for tackling climate change. Carlos Correa, the South Centre's executive director, also spoke on the priorities for developing countries, including the moratorium on TRIPS (trade-related aspects of intellectual property rights) non-violation complaints. During the meeting, Brazil questioned the need for "policy space", as advocated by Kozul-Wright for pursuing industrialization policies. The Brazilian trade envoy Ambassador Alexandre Guido Lopes Parola called for "fiscal space" by pursuing un-interrupted market-opening policies. Brazil, which founded the G20 coalition of developing countries along with India, China, and South Africa in August 2003, severely criticized India and other developing countries for allegedly providing trade-distorting subsidies for sugar and cotton, said a participant, who asked not to be quoted. Brazil also opposed calls for enhancing special and differential treatment provisions, suggesting that big emerging countries would not need policy space based on special and differential treatment, the participant said. Brazil, along with several other South American countries such as Chile, Argentina, Uruguay, and Paraguay among others, said the joint statement initiatives on electronic commerce, domestic regulation for services, and investment facilitation are the main priorities for the Nur Sultan meeting. In a session on "approach to December 2019 issues", the Indian Ambassador J S Deepak spoke about the urgent need for ensuring the functioning of the WTO's Appellate Body that would become dysfunctional after 11 December 2019 when it would be reduced to one member. Speaking on the "e-commerce moratorium," Rashmi Banga of UNCTAD cautioned the participants about ongoing attempts to move the goalposts on what would constitute e-commerce transmissions, said a participant, who asked not to be quoted. Banga said the goalposts on electronic transmissions are being systematically shifted since 2003. She said the ETs (electronic transmissions) were called "digitizable products" by the WTO Secretariat in 2016, and now as "digital deliveries" by the Paris-based Organization for Economic Cooperation and Development (OECD) to cover services like business services, the participant said. At a time when the participants of the plurilateral informal Joint Statement Initiative (JSI) group on e-commerce are calling for a permanent moratorium based on flawed assumptions, the developing countries need to carefully assess the shifting of goalposts by bringing in "other services" such as legal services, financial services, and architectural services, within the scope of e-commerce and ETs, Banga said. In effect, the shifting of goalposts will be further accelerated if the moratorium on e-commerce duties is further extended, she suggested. "That would leave the GATS (General Agreement on Trade in Services) commitments redundant," she said, according to another participant, who asked not to be quoted. China's trade envoy Ambassador Zhang Xiangchen informed members about the discussions on WTO reforms at last week's Shanghai meeting. In short, the day-long retreat revealed sharp differences between a large majority of developing countries on the one side, and Brazil on the other, over issues such as "policy space", special and differential treatment, and the priorities for the Nur Sultan meeting next year, participants told the SUNS.
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