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TWN Info
Service on WTO and Trade Issues (Jul20/16) Geneva, 21 Jul (D. Ravi Kanth) – Many developing countries have warned that the WTO’s 12th ministerial conference (MC12) next year will hinge on whether members can restore the two-stage Dispute Settlement Body (DSB), conclude the fisheries subsidies negotiations based on the UN Sustainable Development Goal 14.6, and reform the trade body on the basis of developmental goals, trade envoys told the SUNS. At the Doha Trade Negotiations Committee (TNC) meeting on 20 July, the developing countries issued strong markers on the growing digital divide and the failure to arrive at a consensus on the scope of the moratorium on customs duties on electronic transmissions. Many developing countries specifically underlined their concerns over the hindrance of the WTO’s TRIPS Agreement for addressing the issue of access to vital medicines to combat the Covid-19 health crisis. The ACP (Africa, Caribbean, and Pacific) group as well as many developing countries expressed sharp concern over the continued failure to resolve the improvements in the special and differential treatment (S&DT) as proposed by the group of 90 developing and least-developed countries since 2003, said several trade envoys, who asked not to be quoted. In sharp contrast to the mandated developmental issues in the Doha Development Agenda (DDA) raised by the large majority of developing countries, several developed countries and their developing country allies called for accelerating work on the Joint Statement Initiatives (JSI) on electronic commerce, investment facilitation, and domestic regulation in services among others. The European Union, which took the floor first at the TNC meeting, underscored the need to discuss trade and health products in the wake of the Covid-19 health crises, and even negotiations on trade and environment products and services. While the developed countries rallied around the non-mandated Joint Statement Initiatives, the developing countries stuck to their escalating demands for addressing the core developmental issues in the DDA, said several trade envoys, who asked not to be quoted. During its intervention, China said Beijing’s positions “on issues like market practices, industrial subsidies and developing country status (differentiation among developing countries for availing special and differential treatment) remains unchanged,” implying that Beijing would oppose these three issues at MC12, said a participant, who asked not to be quoted. At the TNC meeting, China also reminded members, including the United States, that it is sharply concerned “with the attempt of some members to arbitrarily fragment global supply chains aiming to realize so-called self-sufficiency”. In his introductory statement at the TNC meeting, WTO director-general Roberto Azevedo indicated that he did away with the “green room” meetings on grounds of representational concerns. Although the outgoing DG has consistently used the green-room format during the last seven years, except for the last six months, his claim of doing away with the green-room format has come as a surprise, said a trade envoy, who asked not to be quoted. STATEMENTS OF DEVELOPED COUNTRIES The US said it will issue a detailed statement on fisheries subsidies and on WTO reforms at the General Council meeting on Wednesday. The US praised the General Council (GC) chair and the Secretariat for the smooth conduct of the special General Council meetings in selecting the new director-general. The European Union, which took the floor first, called for concluding the fisheries subsidies agreement without delay. Brussels underscored the need for accelerating work on the Joint Statement Initiatives (JSI), particularly electronic commerce, investment facilitation and domestic regulation in services. Against the backdrop of the ravaging Covid-19 pandemic, the WTO must focus on trade in health products involving the examination of tariffs, trade restrictive measures, and other measures, the EU’s trade envoy to the WTO, Ambassador Joao Aguiar Machado, told the members, according to trade envoys, who asked not to be quoted. Canada, the coordinator of the Ottawa Group, echoed the need for finalizing the agreement on fisheries subsidies, accelerating the JSI on e-commerce, investment facilitation, and domestic regulation in services, and issues concerning the domestic support in agriculture. Australia, which coordinates the JSI on electronic commerce along with Japan and Singapore, highlighted the rapid work done on electronic commerce. Canberra said a consolidated draft text on the plurilateral JSI on electronic commerce will likely be issued by the end of the year. Australia said the trade-distorting domestic support entitlements also need to be addressed at MC12. However, the JSI coordinator expressed sharp concern over demands to discontinue the moratorium on customs duties on electronic commerce. Australia said doing away with the moratorium will have serious repercussions for the global digital trade. Several industrialized countries of the JSI on electronic commerce, including Switzerland, had repeatedly emphasized the need for a permanent moratorium on customs duties on electronic commerce. Several industrialized and even some developing countries specifically called for accelerating work on the JSI issues such as a digital trade agreement, investment facilitation, and domestic regulation in services. They emphasized the need to address the specific Covid-19-related trade measures, particularly the export restrictions on medical products and food products. STATEMENTS BY DEVELOPING COUNTRIES Although all members emphasized the need to negotiate on the draft text on fisheries subsidies issued last month by the chair of the Doha rules negotiating body, Ambassador Santiago Wills of Colombia, many developing countries highlighted their demands for robust special and differential treatment provisions given the existential needs of tens of millions of poor fishermen in developing countries who are dependent on fishing for their survival. Many developing countries – India, South Africa, and Indonesia among others – spoke about their developmental initiatives, including reforms and the need for updating the 1998 work program on electronic commerce concerning the moratorium on customs duties on electronic transmissions. India’s new trade envoy Ambassador Brajendra Navnit highlighted New Delhi’s core concerns, particularly the need to tackle the Covid-19 health crisis at home. He said that for India, being the main user of the dispute settlement system, the restoration of the Appellate Body is one of the top priorities for MC12. He said that the restoration of the two-stage dispute settlement system must precede all other WTO reforms, according to trade envoys, who asked not to be quoted. Given the ravaging Covid-19 health crisis, India said work at the WTO should be calibrated. New Delhi welcomed the draft fisheries text issued by the Doha rules chair Ambassador Santiago Wills from Colombia. Ambassador Navnit emphasized that harmful fisheries subsidies that enable fishing in distant waters and industrial scale fishing must be curbed. He said the outcome in the fisheries subsidies negotiations must address the harmful subsidies given by some members. Without naming the major subsidizers such as China, the European Union, the United States, Japan and Korea among others, India said large subsidies in value and per capita terms must be curbed. India said the interests of the millions of small scale artisanal fishermen must be protected and special and differential treatment must remain at the heart of the fisheries subsidies agreement. On electronic commerce, the work program of 1998 must be updated and the scope of what would constitute electronic transmissions must be clarified without delay, India said in its intervention. While emphasizing the need for digital industrialization, India said any rule-making in the e-commerce is a leap into the dark. On agriculture, India opposed proposals for capping trade-distorting domestic subsidies, suggesting that its proposal with China for eliminating aggregate measurement of support (or amber box subsidies) must remain as the basis for any negotiations in domestic support. India also called for an outcome on the permanent solution for public stockholding programs for food security. During her intervention, South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter quoted the United Nations Secretary-General’s 18th Nelson Mandela lecture on 18 July in which he said that “COVID-19 has exposed the fragility of the world, the injustice of rising inequality and the fallacies and falsehoods, including that free markets can deliver healthcare for all”. The UN Secretary-General Antonio Guterres had emphasized that “we have an opportunity to build back a more equal and sustainable world based on a New Social Contract and a New Global Deal.” “In our view,” said Ambassador Xolelwa, “the (Covid-19) pandemic has exposed the cost of non-commitment to the DDA and the WTO`s failure to deliver on the promise of development.” Agriculture remains a core priority for MC12, she said, emphasizing that “the WTO must deliver on mandated issues such as PSH (public stockholding programs for food security), TDDS (trade-distorting domestic support), SSM (special safeguard mechanism) and cotton.” On fisheries subsidies negotiations, South Africa said that it is committed to conclude these negotiations in line with SDG 14.6. The UN Sustainable Development Goal 14.6 states: “by 2020, prohibit certain forms of fisheries subsidies which contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU fishing, and refrain from introducing new such subsidies, recognizing that appropriate and effective special and differential treatment for developing and least developed countries should be an integral part of the WTO fisheries subsidies negotiation.” She said “disciplines must deliver on all pillars of the mandate, must target large scale industrial fishing and not constrain the use of beneficial subsidies that contribute to the sustainability of fish stocks, safeguard food security and livelihoods of coastal communities, including policy space to develop their marine resources.” South Africa argued that “S&DT must be an integral part of the outcome. We will work constructively with the Chair towards a balanced outcome that delivers on the mandate.” Ambassador Xolelwa drew attention to the G90 proposal on making S&DT simple and effective. She said that “S&DT is one of the key principles of the WTO provided to developing countries to adjust to trade rules at their pace and in accordance with their level of development,” arguing that “this principle and right must be preserved and is central to the integration of developing countries in global trade.” Ambassador Xolelwa argued that the e-commerce and TRIPS moratoria “must be considered on its merit as their mandates and contexts are different.” She said that the 1998 work program on e-commerce and the need to address the digital divide remain the core priorities for MC12. “The priority must be the scope of the moratorium which will inform decision making by MC12,” she said. Ambassador Xolelwa called for prioritizing the work of the CTD (Committee on Trade and Development) that is mandated to discuss the developmental aspects that are key to ensuring inclusive participation in the digital economy. On the TRIPS Agreement, she said that “COVID-19 is fundamentally a health crisis” and “the WTO has a role to play in contributing to a multilateral solution that ensures affordable access to the vaccine and requisite technologies.” Commenting on the issue of transparency, she said that South Africa continues to “advocate for a cooperative, development-oriented approach and we will work constructively with Members in this regard.” On the Appellate Body (AB) crisis, she said that “the impasse on the appointment of AB members has significant implications for the preservation of rights and obligations of Members.” “We need a solution-oriented multilateral process to restore a two-stage DSS and unlock the impasse in the selection process of AB members,” she emphasized. Indonesia offered points of reflection on Covid-19, saying that countries are fighting the Covid-19 to ensure that life goes on safely. Indonesia’s trade envoy to the WTO, Ambassador Syamsul Behri Siregar, said that the Covid-19 pandemic has challenged the WTO as to how it can remain relevant to the global economy. “Our attitude to the pandemic will determine the relevance of this organization for the future.” The role of the WTO to ensure affordable access to medical products and vaccines “is crucial, especially ensuring that the IPR (intellectual property regime) does not become hindrance to accomplish global public health objectives.” Global trade recovery will depend on equitable access to help combat the Covid-19 health crisis, the Indonesian envoy argued. Indonesia said the continuing crisis at the dispute settlement system and the restoration of the two-stage Dispute Settlement Body must be addressed without further delay. On the mandated issues, Indonesia said it is imperative to address them. “All should be able to reap the gains,” Indonesia said. It called for addressing the trust-deficit at the WTO. The African Group said “it is indispensable to build our capacities and resilience to crises – now and in the future.” TRIPS and Public Health should ensure “that patents and other intellectual property do not unfairly stand in the way of achieving the critical public health objectives,” Botswana said on behalf of the African Group. Botswana said the need of the hour is “solidarity and close cooperation among Members to ensure affordable access, and on reasonable terms, to medicines, vaccines, diagnostics and medical equipment. Accessibility of technologies to produce these resources, particular to Members with limited or no productive capacities in the pharmaceutical area is essential to fight the COVID-19 pandemic effectively.” The African Group reaffirmed that “(TRIPS) Non-Violation and Situation Complaints should not be subjected to dispute settlement and thus undermine Members’ rights to regulate in the public interest.” Botswana emphasized credible and developmental outcomes in fisheries subsidies, agriculture, cotton, and safeguarding and strengthening of special and differential treatment provisions. In conclusion, the African Group said it “looks forward to progressing discussions on all these issues in a focused manner, subject to the evolution of the COVID-19 pandemic and the ability of our Capitals to provide technical guidance and political oversight on our negotiations.” “It is instructive to note that the realities imposed by COVID-19 have thus far limited our ability to prepare, coordinate and engage particularly for the fisheries negotiations,” the African Group emphasized. The ACP group called for a fair and balanced reform process, arguing that “the process and substance should accentuate the development dimension of international trade, complement the SDGs, be fair, transparent and inclusive.” The largest developing and least-developed country group at the WTO urged “caution against sub-plenary arrangements” and reiterated “the need for an outcome that is mutually acceptable and adopted in line with the consensus principle of the WTO.”
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