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TWN Info Service
on WTO and Trade Issues (Dec21/07) Attempts to transform
WTO into a "plurilateral" trade organization Geneva, 8 Dec (D. Ravi Kanth) - Several ministerial statements were issued on 3 December on the issue of trade and environment, in an apparent attempt to transform the World Trade Organization into a "plurilateral" trade organization. After the postponement of the WTO's 12th ministerial conference (MC12) ten days ago, a flurry of un-mandated plurilateral ministerial statements have been issued in areas covering the Joint Statement Initiative (JSI) agreement on services domestic regulation, the JSI on trade and gender, the JSI on structured discussions on trade and environmental sustainability, the JSI on fossil fuel subsidies, and the JSI statement on the informal dialogue on plastic pollution and environmentally sustainable plastics trade among others. Notwithstanding these initiatives, which are being steered by the European Union, there was also a Trilateral initiative announced earlier by the United States, the European Union, and Japan on 30 November. As part of what appears to be a rather dangerous push towards turning the WTO, an inter-governmental and multilateral trade body, into a plurilateral trade organization, these JSIs constitute the biggest threat to advancing the interests of the developing countries in the coming years, said people, who asked not to be quoted. The three ministerial statements on trade and environment that were issued on 3 December pertain to: (1) structured discussions on trade and environmental sustainability; (2) phasing out of fossil fuel subsidies; and (3) an informal dialogue on plastic pollution and environmentally sustainable plastics trade. THE ROLE OF THE WTO DG Surprisingly, the WTO director-general Ms Ngozi Okonjo-Iweala has not made any official comment on these three JSI ministerial statements, as she had done on the JSI agreement on services domestic regulation (see SUNS #9474 dated 6 December 2021). Nonetheless, Ms Okonjo-Iweala had spoken in favour of these three initiatives in her very first statement made at the time of her appointment as DG on 15 February this year (see SUNS #9287 dated 17 February 2021). In that statement (Job/GC/250), Ms Okonjo-Iweala said: "We should also work to ensure that the WTO best supports the green and circular economy and addresses more broadly the nexus between trade and climate change." She went on to say in her intervention that "trade and environmental protection can be mutually reinforcing, both contributing to sustainable development." Ms Okonjo-Iweala emphasized the importance of re-activating and broadening "the negotiations on environmental goods and services. This would help promote trust and encourage Members to explore further ways in which trade can contribute positively to an improved climate." She also said that "care must, however, be taken to ensure that any disciplines are not used arbitrarily or as a disguised restriction on trade, and that they take into account the need for developing countries to be assisted to transition to the use of greener and more environmentally friendly technologies." And, in tune with the European Union's plans to impose a carbon border tax arrangement including the imposition of a carbon tax, Ms Okonjo-Iweala, in her article published in the Financial Times on 14 October, had said that "adopting a global carbon price is essential". In the FT article, she acknowledged that the "poor regions of the world see this (carbon border tax) measure as unfair." "This is no argument against carbon pricing," Ms Okonjo-Iweala said. "The most straightforward solution would be a global carbon price aligned with the Paris Agreement," she said, suggesting that "this would help achieve our collective climate goals, and bring stability and fairness for cross- border business." In short, there is not a moment when Ms Okonjo-Iweala has not overly endorsed the elements revolving around the "carbon border tax arrangements" that have been pushed by the European Union and the United States, including their recent bilateral steel agreement, said people familiar with the development. THE NARRATIVE ON TESSD The ministerial statement on the "Trade and Environmental Sustainability Structured Discussions" (TESSD), which was signed by the US and China among others, highlights "the recent and current efforts by a diversity of WTO Members to address and promote dialogue and information sharing at the WTO on issues where trade, environmental and climate policies intersect, including on circular economy; natural disasters; climate change mitigation and adaptation; fossil fuel subsidies reform; plastic pollution; combating illegal, unreported and unregulated fishing and ensuring legal and sustainable trade in wildlife; the conservation and sustainable use of biodiversity; sustainable oceans; facilitating access to green technology; sustainable tourism; sustainable agriculture as well as trade in environmental goods and services." It calls for launching "dedicated discussions on how trade-related climate measures and policies can best contribute to climate and environmental goals and commitments while being consistent with WTO rules and principles." Almost along the lines of what the DG had said in her earlier intervention, the ministerial statement calls on WTO Members to, "explore opportunities and possible approaches for promoting and facilitating trade in environmental goods and services to meet environmental and climate goals, including through addressing supply chain, technical and regulatory elements." FOSSIL FUEL SUBSIDIES Meanwhile, the ministerial statement on fossil fuel subsidies calls for "the rationalization and phase out of inefficient fossil fuel subsidies that encourage wasteful consumption along a clear timeline and encourage the remaining WTO Members to join us in those efforts, recognizing the substantial financial resource this could unlock globally to support the transition." The ministerial statement acknowledges the need for reform of fossil fuel subsidies to take into account "the specific needs and conditions of developing countries and minimize the possible adverse impacts on their development in a manner that protects the poor and the affected communities." However, it places burdensome notification requirements on the developing countries, including through "enhanced World Trade Organization transparency and reporting that will enable the evaluation of the trade, economic, and environment effects of fossil fuel subsidy programmes." It also emphasizes on "elaborating concrete options to advance this issue at the World Trade Organization in advance of MC13." INFORMAL DIALOGUE ON SUSTAINABLE PLASTICS TRADE In the ministerial statement on plastic pollution and environmentally sustainable plastics trade, the signatories pledged "to intensify our work on access of common interest with a view to identifying actions that participating members could take collectively to support global efforts to reduce plastics pollution." As part of the shared actions on sustainable plastics trade, the ministerial statement calls for "identifying ways to improve the understanding of global trade in plastics, including flows of plastics embedded in internationally traded goods or associated with them (such as plastic packaging), and enhance transparency regarding trade policies relevant to reducing plastic pollution and more environmentally sustainable plastics trade." It calls for "sharing experiences of effective approaches to move towards more circular, resource efficient and environmentally sustainable plastics trade". The ministerial statement emphasizes the need to move towards more circular plastics economies and "environmentally sound management, recovery and recycling of plastics." Although the ministerial statement highlights the need to facilitate "access to key technologies" and "expand trade in environmentally sustainable and effective substitutes and alternatives," it is well established that these goals invariably remain unfulfilled at the WTO. "PLURILATERALIZATION" OF THE WTO The non-mandated ministerial decisions on digital trade, trade and environment, trade and gender, plastics, disciplines for MSMEs (micro, small and medium enterprises), etc show the eagerness of the developed countries to pursue their market access and trade liberalization agenda even if this comes at the cost of undermining the core principles of the WTO, including the principle of consensus-based decision making, said people, who asked not to be quoted. Moreover, these initiatives are destroying the existing multilateral initiatives within the WTO on these issues such as the work programs on services domestic regulation and on e-commerce, the work in the Committee on Trade and Environment, etc, said people, who asked not to be quoted. The alleged role played by the WTO Secretariat and particularly the DG in pushing these decisions and further hailing the success of agreements between a few countries such as on services domestic regulation may prove to be the final nail in the coffin of the WTO, said people, preferring not to be quoted. Some of these draft decisions may seem to be innocuous to the development concerns of the developing countries such as on trade and gender and on MSMEs but have the potential to be used to undercut the special and differential treatment provided to the developing countries, as they put at par women and MSMEs in developed countries with those in developing and least developed countries. The ministerial decisions on issues such as trade and environment and plastics could directly impact on the trade competitiveness of the developing countries. They could also adversely impact the exports of the developing countries like plastic products and other metals and minerals which are major export items of the developing countries. On the other hand, these decisions will push the imports of environmentally-friendly goods, services and technologies into developing countries, as the developed countries are major exporters of these goods and services. In conclusion, it's time for the developing countries to wake up to these realities and push for ministerial decisions only on the mandated issues such as on the permanent solution for public stockholding programs for food security, cotton, etc. The developing countries should refuse to engage in any discussions or negotiations at the WTO until there is an agreement on the TRIPS waiver, said people, who asked not to be quoted.
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