|
||
|
TWN
Info Service on WTO and Trade Issues (Nov21/15) Geneva, 15 Nov (D. Ravi Kanth) – Attempts to establish a Working Group for negotiating on the proposed reforms of the World Trade Organization (WTO) are being likened to a proverbial “monster” in the making as they could fundamentally alter once and for all the rule-book as laid out in the Marrakesh Agreement against the interests of the developing countries, said people familiar with the negotiations. India has apparently opposed the continued attempts at establishing the Working Group for overseeing the proposed WTO reforms that seem to be aimed at changing the trade body’s core functions in the areas of negotiations, the two-stage dispute settlement system, and the implementation of the covered agreements, said people familiar with the development. In the ongoing battle on the elements to be included in the ministerial outcome document at the WTO’s 12th ministerial conference (MC12), scheduled to begin in Geneva on 30 November, tensions have come into the open over the attempts to insert language relating to the Working Group by the European Union, Brazil, the US, and other developed countries. The proponents of the proposal for the Working Group have not spelt out the terms of reference, the mandate, and the process for the meetings of the Working Group, said people, who asked not to be quoted. The proposal for establishing the Working Group on WTO reforms, as mooted by the European Union and Brazil, could lay the ground for doing away with the principle of consensus-based decision-making at the WTO and the self-designated basis for developing countries to avail of special and differential treatment (S&DT). It could also pave the way for consigning the two-stage dispute settlement system to history, said people, who asked not to be quoted. The proposal for the Working Group, which is being shared by the European Union and Brazil on the WhatsApp messaging service, has not been officially circulated to all members. Significantly, the co-sponsors have not spelled out the mandate for establishing the Working Group, its terms of reference, and several other issues, said people familiar with the development. At an informal meeting of select countries on 11 November, which was attended by the WTO General Council chair Ambassador Dacio Castillo from Honduras and the WTO director-general Ms Ngozi Okonjo-Iweala, the EU and Brazil, with support from the United States and other developed countries, made a strong push for their amended proposal, said people familiar with the development. According to people familiar with the discussions, the US is keen to work with the European Union, Brazil and other countries on establishing a Working Group, but does not seem to prefer having any mention of the restoration of the two-stage dispute settlement system, particularly the Appellate Body (AB), said people, who asked not to be quoted. The US seems more focused on continuing with a single-stage DSS (dispute settlement system, whereby only panels will decide on the outcomes of disputes and leave it to the parties to negotiate the final decision on the dispute) without the restoration of the AB, said people familiar with the ongoing small-group consultations. USTR CALLS FOR NEW DISPUTE SETTLEMENT SYSTEM Speaking to reporters in Washington DC on 10 November, the US Trade Representative (USTR), Ambassador Katherine Tai, called for a new dispute settlement system without indicating what that system is going to look like in terms of carrying out the WTO’s enforcement function. “I think that we need to be very bold here. Just restoring the WTO to where it was four years ago, five years ago, is not actually going to bring back the energy that we need, frankly, for a world economy that is changing very quickly,” she said, according to a report in the Washington Trade Daily on 11 November. Ms Tai told reporters that MC12 will be a “laboratory” that will demonstrate the WTO’s ability to change, along with how new leadership will change the dynamics. Among the needed changes is a new dispute settlement system, she said. The US has repeatedly blocked for the past two years a proposal from 121 WTO members that called for the start of a selection process to fill all seven vacancies in the Appellate Body. Effectively, the US seems to be seeking reforms only in the two pillars – the monitoring function and the negotiating function – of the WTO, while leaving the two-stage dispute settlement system including the Appellate Body remaining frozen in limbo, said people, who asked not to be quoted. Under the new amended proposal on a Working Group on WTO reforms, the EU and Brazil chose not to elaborate on the specific issues in the reform of the three pillars of the WTO, which were contained in their earlier proposal, according to people familiar with the development. The US apparently does not want any elaboration of issues and timelines before the Working Group, said people, who preferred not to be quoted. So far, the EU and Brazil are unable to provide any clarity on what is the mandate of the Working Group, the terms of reference for its functioning, the scope of the WTO reforms, and whether it will report to the Doha Trade Negotiations Committee (TNC) or the General Council and so on, said people, who preferred not to be quoted. One underlying goal, which has not been stated openly, is that the Working Group could suggest the termination of the Doha Development Round of trade negotiations at the WTO’s 13th ministerial conference (MC13), said an analyst, who asked not to be quoted. To accommodate the US suggestions, the new joint proposal by the EU and Brazil states that “recognizing the urgent need for a review of the operation of the World Trade Organization, in all of its three functions, including in order to have a fully functioning dispute settlement system, decides as follows: we establish a Working Group under the auspices of the General Council to consider institutional improvements to the functioning of the WTO.” According to the joint proposal by the EU and Brazil, the Working Group should serve as a forum for discussion and to issue recommendations around the institutional aspects of WTO reform that are of systemic interest. The Working Group shall prepare recommendations on the following issues, among others: (1) monitoring and deliberating function; (2) negotiating function; and (3) dispute settlement function. According to the proposal, the Working Group will issue recommendations sufficiently in advance of MC13. In sharp contrast, the joint proposal, in its earlier iteration, had suggested specific issues to be discussed/reviewed by the Working Group. The issues include: (1) improving the WTO’s monitoring role; (2) improving the effectiveness of WTO committees; (3) discussing arrangements in relation with stakeholders; and (4) enhancing cooperation between the WTO and other international organizations, in the monitoring and deliberating function. In the negotiating function, the issues include: (1) considering how to revitalize the WTO’s negotiating function (removal of the principle of consensus-based decision-making and bringing about differentiation among developing countries for availing of S&DT); and (2) facilitating inclusiveness and participation by developing countries, particularly noting the challenges faced by those with small delegations. And in the dispute settlement function, the EU and Brazil have suggested “considering areas where reforms of WTO dispute settlement are needed and identifying solutions to allow a fully functioning and improved dispute settlement system.” Clearly, the EU and Brazil seem eager to push forward with an open agenda without any clear mandate or principles, so that many issues like the Joint Statement Initiatives (JSIs), trade and climate change, and non-trade issues such as trade and labour, and even trade and human rights could also be brought under the proposed Working Group’s discussions, said people familiar with the development. At the informal meeting on 11 November, India opposed the EU-Brazil proposal, saying that it has not clearly defined the rationale for the Working Group and has not clarified its terms and conditions, said people familiar with the discussions. India raised a range of questions on the terms of reference for the Working Group, and whether it will work under the General Council or the Doha Trade Negotiations Committee. India sought to know the scope of the reforms and how the process will be carried out. Earlier, India, Cuba, and the African Group had argued that “WTO reform” does not mean accepting either inherited inequities or new proposals that would worsen imbalances. (See SUNS #9259 dated 22 December 2020). In a proposal, the three co-sponsors had emphasized that “reforms must be premised on the principles of inclusivity and development and respond to the underlying causes of the current backlash against trade and the difficulties that developing Members continue to face vis-a-vis their industrialization challenges.” The proponents argued that “inclusivity would require, at a minimum, preserving consensus decisions in the WTO.” They said the priorities for the reform of the WTO must include: (a) The negotiating function of the WTO; (b) Strengthening the multilateral character of the WTO. Critically, this must include the preservation of consensus decision-making and respecting Art. X of the Marrakesh Agreement on Amendments with regards to new rules; (c) Addressing the unilateral and protectionist actions taken by some Members; (d) Reaffirming the principle of Special and Differential Treatment, which is a treaty-embedded, non-negotiable right for all developing countries in the WTO; and promoting inclusive growth, widening spaces for states to pursue national development strategies in the broad framework and principles of a rules-based system; (e) Keeping development at its core through delivering on the long-promised development concerns, in particular the outstanding development issues of the DDA; as well as address the asymmetries in WTO Agreements such as those in Agriculture, the Subsidies Agreement, TRIMs and the related GATT articles (Art. III and XI), TRIPS and other areas; continuing with the on-going multilaterally mandated negotiations; and reinvigorating the discussions in the 1998 E-Commerce Work Programme particularly looking at the E-Commerce Moratorium and the issues of digital divide; (f) The dispute settlement function; (g) Restoring the Appellate Body and the two-tier WTO DSU; (h) The monitoring function of regular bodies; (i) Reaffirming existing commitments and not adding more obligations in the areas of transparency, specific trade concerns, and the functioning of regular bodies. The WTO must also allow for different economic models rather than push for one form or another. In short, MC12 will decide on the status and the fate of the developing countries at the WTO. If the developing countries fail to safeguard their core interests on the proposed reforms and to oppose the creation of the Working Group, then it would be difficult for them to function at the WTO to advance their developmental agenda after MC12, said people familiar with the development.
|
||
