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TWN
Info Service on WTO and Trade Issues (Jun21/08) Geneva, 14 Jun (D. Ravi Kanth) – The leaders of the Group of Seven (G7) industrialized countries on 13 June advocated a hotchpotch of their “free and fair trade” priorities that includes creating a “modernized rule-book” to bring about a fundamental change in availing of special and differential treatment by developing countries and doing away with the consensus principle for arriving at decisions at the WTO. The G7 countries, which include the United States, Japan, Germany, the United Kingdom, France, Italy and Canada, issued the Carbis Bay G7 Summit Communique titled “Our Shared Agenda for Global Action to Build Back Better” after two days of deliberations during which some members of the G7 such as Germany and Italy appear to have differed with the US-centric goals for targeting China on several fronts, according to media reports. The section on “free and fair trade” contains four paragraphs (nos. 27 to 30) that appears to be a set of “theological” prescriptions that could strike a fundamental blow to the rules-based and member-driven World Trade Organization. The “US AND THEM” TRADE AGENDA The section on “free and fair trade” begins with a rather controversial remark that states, “we agree on the need for the world’s leading democratic nations to unite behind a shared vision to ensure the multilateral trading system is reformed, with a modernized rule-book and a reformed World Trade Organization (WTO) at its centre, to be free and fair for all, more sustainable, resilient and responsive to the needs of global citizens.” The somewhat “pompous” and “arrogant” wording in the paragraph above seems to be the new mission of the seven democratic countries, which appear to be facing fundamental democratic challenges within their own countries, according to media reports. Also, whether the seven countries will pay any attention to the development and inclusive agenda of reforms at the World Trade Organization as proposed by India, South Africa, and several other developing countries remains unclear. Essentially, the G7 countries seem to be advancing their own agenda without any regard to the composition of the WTO members, their specific status in the global trading system, and their developmental aspirations as set out in the Doha Development Agenda. That the G7 countries seem determined to kill the proposed development and inclusive agenda of reforms is now further vindicated in the specific goals they have listed in their communique. In paragraph 28, the G7 communique says that “we support multilateral and plurilateral agendas to address issues in the global trading system itself and shared global challenges.” While the G7 countries did not quite specify the “multilateral and plurilateral agendas”, it is an open secret that the seven countries intend to change the negotiating function of the WTO by bringing about differentiation among developing countries for availing of special and differential treatment as well as doing away with the consensus- based principle of decision-making. Effectively, the G7 leaders are insisting that where it is convenient to pursue their multilateral initiatives they will do so, like in further trade liberalization and now the proposed fisheries subsidies agreement, and where it is not possible, then they will pursue their plurilateral agendas even if these allegedly violate the core provisions in the Marrakesh Agreement that created the WTO in 1995. “Looking ahead to the 12th WTO Ministerial Conference (MC12) in November”, the G7 leaders stated in paragraph 28 of their communique that “we will work with other WTO members to make progress on immediate issues, including reaching a meaningful conclusion to the multilateral negotiation on fisheries subsidies and advancing negotiations on e-commerce.” Unwittingly, the G7 leaders seem to have put paid to the WTO Director-General Ms Ngozi Okonjo-Iweala’s goal to strike an agreement on fisheries subsidies by 15 July, at a ministerial meeting that she has convened. In short, due to the G7 pledge, there may not be a fisheries subsidies agreement reached by 15 July. The seven countries also welcomed “the work undertaken towards the conclusion of the negotiations under the Joint Statement Initiative on Services Domestic Regulation by its participants.” That the proposed Joint Statement Initiative (JSI) agreement on domestic regulation in services has severely undermined the ongoing multilateral trade negotiations on the same issue, which are being held under the mandate of the Working Party on Domestic Regulation in services, is well known. Further, the JSI negotiations have allegedly violated the core principles of the Marrakesh Agreement, which have been well established by India, South Africa and several other developing countries. The G7 communique also promotes a plurilateral agreement “to bolster women’s participation in trade and economic empowerment.” In a prelude to bringing trade and environment policies into the WTO, the G7 leaders endorsed “the conclusions of G7 Trade Ministers on promoting the transition to sustainable supply chains, and acknowledge the risk of carbon leakage, and will work collaboratively to address this risk and to align our trading practices with our commitments under the Paris agreement.” The G7 leaders have also pledged “to work in the WTO to formulate pragmatic, effective and holistic solutions to support trade in health, as well as their support for open, diversified, secure, and resilient supply chains in the manufacture of COVID-19 critical goods and vaccines and their components.” During the last one year of the worsening pandemic that has claimed more than 3.7 million lives so far, the G7 countries had imposed various restrictions on the critical supply of raw materials that were needed in the manufacture of vaccines and this has been documented with evidence, according to media reports. That for the G7 leaders to now preach on “open, diversified, secure, and resilient supply chains in the manufacture of COVID-19 critical goods and vaccines and their components” seems somewhat hypocritical. More importantly, the continued silence on what the G7 countries intend to do on the temporary TRIPS waiver to combat COVID-19, as co-sponsored by 63 developing countries and supported by more than 50 other developing countries is a clear signal that they may stymie the upcoming text-based negotiations on the waiver. Echoing the US agenda on forced labour purportedly aimed at targeting China, the G7 leaders said that “we are concerned by the use of all forms of forced labour in global supply chains, including state-sponsored forced labour of vulnerable groups and minorities, including in the agricultural, solar, and garment sectors.” Surprisingly, the G7 leaders did not include the issue of forced labour in the fishing sector, which the US had already raised in the ongoing fisheries subsidies negotiations. The G7 countries, which had failed to bring social clauses into global trade at the Seattle ministerial meeting in December 1999, have now said that “we agree on the importance of upholding human rights and of international labour standards, including those deriving from International Labour Organisation membership, throughout global supply chains and tackling instances of forced labour.” The G7 leaders tasked their trade ministers to “identify areas for strengthened cooperation and collective efforts towards eradicating the use of all forms of forced labour in global supply chains, ahead of the G7 Trade Ministers’ meeting in October 2021.” The G7 communique says that “we will work together at the WTO and with the wider WTO membership ahead of MC12 to advance” various points, which appear to be diametrically opposed to the priorities advanced by a large majority of developing countries at the WTO. These points include: A. Modernization of the global trade rule-book so that it both better reflects, with new rules, the transformations underway in the global economy, such as digitalisation and the green transition; and strengthens rules to protect against unfair practices, such as forced technology transfer, intellectual property theft, lowering of labour and environmental standards to gain competitive advantage, market-distorting actions of state-owned enterprises, and harmful industrial subsidies, including those that lead to excess capacity; B. Stronger adherence to the existing and modernized rule-book, including through greater respect for and compliance with transparency obligations, and a strengthened WTO monitoring and deliberating function; C. A fairer approach to countries’ different responsibilities under the rule-book, including through addressing the arrangements for special and differential treatment so they reflect developments in the global economy but continue to account for the special needs of the least developed and low-income developing countries; D. Proper functioning of the WTO’s negotiating function and dispute settlement system, requiring addressing long-standing issues; and E. Support for the interests of the least developed and low-income developing countries, including in the full implementation of WTO rules to integrate into the world trading system, so that any modernization of the global trading system supports the social and economic growth and development of these countries. At a time when the G7 countries are themselves promoting state-led industrial policies like the recently announced US industrial policy that is estimated to provide $250 billion in subsidies for various high-tech sectors, questions are bound to be raised whether there is any credibility at all to the list of “free and fair trade” priorities outlined by the G7. If anything, the G7 “free and fair trade” charter appears to read more like a reformed neoliberal trade agenda that includes new terms like “inclusive” and “resilience” to camouflage the real intention to pursue policies on a “us and them” framework.
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