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TWN Info
Service on WTO and Trade Issues (May21/05) Washington DC, 4 May (D. Ravi Kanth) – Members of the World Trade Organization on 3 May talked past each other over their respective priorities for the WTO’s 12th ministerial conference (MC12) to be held later this year, with little convergence between a large majority of developing countries on the one side, and major developed countries on the other over the likely deliverables, except on fisheries subsidies, said people familiar with the development. At an informal Trade Negotiations Committee (TNC) meeting, sharp divergences in priorities and colliding narratives among members came into the open, with little convergence on what needs to be accomplished at MC12, except on fisheries subsidies, said people familiar with the proceedings. A large majority of developing countries, including Indonesia, India, and South Africa, among others pressed for resolving the mandated issues that fall under the purview of the TNC mandate. The developing countries also called for an immediate outcome on the TRIPS waiver in combating the COVID-19 pandemic. The developing countries and several developed countries called for the restoration of the Appellate Body (AB) without further delay, with New Zealand expressing doubts in bringing about WTO reforms without resolving the AB impasse, said people familiar with the proceedings. The developing countries rallied around the G90’s Agreement-specific proposals for making special and differential treatment (S&DT) simple and effective. THE INDUSTRIALIZED COUNTRIES In sharp contrast, the industrialized countries as well as some developing countries of the Ottawa Group focused on their controversial priorities such as trade and health, trade and climate change, and plurilateral negotiations, along with fisheries subsidies negotiations and a few elements in agriculture such as transparency and export restrictions. The United States, which spoke briefly on grounds that it will outline other issues at the General Council meeting on 5 May, merely highlighted two issues – a meaningful agreement on fisheries subsidies and transparency-related issues and possibly an agreement on the exemption from export restrictions for the procurement made by the World Food Program. Significantly, the US remained silent on industrial subsidies, disciplines for state-owned enterprises, and forced technology transfer. In a move apparently targeted at China, Washington’s two other trilateral partners – Japan and the EU – raised these controversial issues. Japan called for starting negotiations on these three issues at MC12, while the EU spoke only on industrial subsidies and state-owned enterprises, said people, preferring anonymity. The US also did not touch on the issue of resolving the Appellate Body impasse at the meeting, despite calls from a large majority of members to address this issue up-front, said people familiar with the development. Despite calls from the director-general Ms Ngozi Okonjo-Iweala not to get locked in talking past each other and enter into solution-based discussions, members appeared to remain indifferent to her call, said a person, who asked not to be quoted. DG’S SUMMING-UP REMARKS In her concluding remarks, Ms Okonjo-Iweala highlighted that “three concrete deliverables stood out: an agreement to curb harmful fisheries subsidies; outcomes on agriculture, with a focus on food security; and a framework that would better equip the WTO to support efforts against the COVID-19 pandemic and future health crises.” For the first time, she did not mention the word “JSIs” (Joint Statement Initiatives) even though she said somewhat indirectly to groups of countries. She touted the recent meeting she convened on vaccine inequity, claiming that it has opened the possibilities for ramping up the production of vaccines. In line with the Ottawa Group’s demand on trade and health, the DG said a working group would be constituted, a claim that was not in accordance with the TNC mandate. DG said that “in the coming days, she would intensify her own outreach with heads of delegation, organizing meetings “in various configurations large and small” to support the chairs of negotiating groups in their efforts to broker compromise among members.” In preparations for the July ministerial meeting, the DG assured members that “nothing will be done behind closed doors that people don’t know about,” indicating that she would work closely with the General Council chair and the chairs of the negotiating bodies as well as the MC12 chair Kazakhstan to conduct these meetings. Ms Okonjo-Iweala emphasized “the tight timeframe for members to resolve their outstanding differences”. The Director-General said the “path to July” would involve a large number of intensive meetings aimed at narrowing gaps. “Week in, week out, this is what we will do now.” DEVELOPING COUNTRIES REITERATE DEVELOPMENTAL PRIORITIES At the meeting, China said members should work towards reinvigorating the multilateral trading system, restoration of the Appellate Body and reduction in fisheries subsidies with broad S&DT flexibilities. China also supported the TRIPS waiver as well as the Trade and Health initiative of the Ottawa Group on the basis of the DG’s “third way” approach. INDONESIA In one of the strongest statements yet at the meeting, Indonesia’s trade envoy Ambassador Syamsul Bahri Siregar said that “nothing is more important for the world at the moment than addressing this crisis,” cautioning that “we can either be part of the solution or part of the problem, by taking no concrete action.” Ambassador Siregar said “the WTO needs to finalize the temporary TRIPS waiver without much delay,” as it “leads to a real change in ramping up diagnostics, therapeutics, and vaccines across countries.” Indonesia, which coordinates the G-33 coalition of 47 developing countries, said that “a balanced (and) meaningful outcome”, especially “a permanent solution for PSH, operable SSM, and balanced outcome in domestic support is highly important for food security, especially during and after the pandemic.” INDIA AND SOUTH AFRICA India outlined its priorities for MC12 that include: (1) an immediate outcome on the TRIPS waiver; (2) movement of health professionals; (3) simple and efficient permanent solution on public stockholding programs for food security; (4) the resolution of the AB impasse, fisheries subsidies with effective special and differential treatment; (5) clarity on scope and definition of electronic transmissions and the impact of the moratorium on customs duties on electronic transmissions; and (6) a post-MC12 work program. South Africa called for urgent text-based negotiations on the TRIPS waiver “to temporarily lift the IP barriers to enable sharing of technology and know-how to ramp-up production and leverage under-utilized manufacturing capacity that clearly exist as confirmed in the meeting you (the DG) convened on 14 April 2021. The outcome must be reached before MC12.” It underscored the need for discussing the WTO response to COVID-19 at the July meeting. In agriculture, South Africa called for preserving support to resource poor farmers under Article 6.2 of the Agreement on Agriculture, capping and substantial reduction of domestic support, a permanent solution for PSH (public stockholding), an outcome on cotton, and the special safeguard mechanism. “A meaningful outcome in agriculture negotiations should address historical imbalances,” South Africa said, arguing that the “outcome cannot be limited to transparency and Work Programme.” It also highlighted the proposed disciplines on fisheries subsidies based on “sustainability” and the concept of “common but differentiated responsibility.” South Africa called for acceleration of the unresolved G90’s demand on Agreement-specific proposals for improving S&DT provisions. South Africa said that “the outcome on the e-commerce moratorium at MC12 will depend on clarifications with regard to the scope and definition of ET (electronic transmissions).” UNITED STATES’ STANCE The US, which spoke towards the end of the meeting, alluded to members talking past each other, saying it has not heard anything new at the meeting. A US official urged the DG to spell out her “vision and the process” between now and July. The US official expressed confidence in the DG’s efforts to “bridge the gaps, and break the cycle of talking past each other will soon bear fruit,” calling for collective focus on what members can reasonably achieve in a few short months between now and MC12. For Washington, the top priorities include a “truly meaningful outcome on fisheries subsidies,” suggesting that it has actively participated in the discussions on overfished stocks, IUU (illegal, unreported and unregulated) fishing, disciplines on overcapacity and overfishing, artisanal exemptions, and special and differential treatment. Without naming China, it called for additional focus on the most harmful subsidies, specifically on subsidies contingent beyond national jurisdiction, and subsidies for vessels that do not fly the flag of the subsidizing members, said people familiar with the proceedings. It also spoke about the COVAX facility, while remaining silent on the proposed TRIPS waiver. Lastly, the US said the most important achievable issue is transparency and possibly the exemption on export restrictions, without indicating what its stand is going to be on the core mandated issues such as the permanent solution for public stockholding programs for food security for developing countries. The US had blocked an agreement on the permanent solution for public stockholding programs for food security at MC11 in Buenos Aires, in December 2017 and it remains to be seen whether it will do so at the Geneva ministerial meeting later this year, said a participant, who asked not to be quoted. THE JSI PROPONENTS At the meeting, the JSI coordinators presented somewhat upbeat reports even though there is little consensus on the scope and definition of what would constitute electronic goods and services, entrenched positions on data localization servers, and cross-border data flows, said people, who asked not to be quoted. The European Union called for a “clear idea on the process from now to MC12,” emphasizing outcomes on fisheries subsidies, a ministerial declaration on trade and health, and other issues for the post-MC12 work program, said people familiar with the proceedings. China said that members should work towards reinvigorating the multilateral trading system, restoration of the Appellate Body and reduction in fisheries subsidies with broad S&DT flexibilities. China also supported the TRIPS waiver as well as the Trade and Health initiative of the Ottawa Group on the basis of the DG’s “third way” approach.
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