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TWN
Info Service on WTO and Trade Issues (Mar22/09) Geneva, 10 Mar (D. Ravi Kanth) – The World Trade Organization’s 12th ministerial conference (MC12), which is scheduled to be held in the second week of June, appears to be facing strong headwinds and even a likely postponement, if the US and its allies succeed in suspending Russia from the WTO due to Moscow’s invasion of Ukraine, said people familiar with the development. On Wednesday, the US House of Representatives overwhelmingly decided to ban Russian energy imports and to push for the suspension of Moscow’s membership in the WTO. The Representatives, however, decided to drop the Permanent Normal Trade Relations (PNTR) bill against Russia apparently at the request of the US administration. The House also decided to drop a bill on scrapping Permanent Normal Trade Relations status with Belarus, which is currently seeking WTO membership. “Membership in the WTO is a privilege that comes with responsibilities, and bad actors who destabilize global security should not enjoy the economic benefits belonging to that body,” said Mr Richard Neal, a House member, according to a report in the Washington Trade Daily (WTD) on 10 March. However, the US Senate intends to terminate PNTR status with Russia, which amounts to denying most-favored- nation (MFN) treatment to products exported by Russia to the US, and instruct the US Trade Representative (USTR) Ambassador Katherine Tai to seek suspension of Russia’s WTO membership as well as halt Belarus’ action to seek WTO membership. Canada has also reportedly decided to deny PNTR status to Russia, a decision that Ottawa is yet to notify the WTO. US ACTION HAMPERS WTO NEGOTIATIONS The US-led actions along with other developed countries, including Switzerland against Russia at the WTO since 24 February have already halted negotiations on the proposed “deliverables” for MC12, said several people, who asked not to be quoted. Switzerland, which is the host country for the WTO and also currently holds the chairmanship of the WTO’s General Council (GC), has so far not held any meeting on the much-promised WTO’s response to the pandemic allegedly due to pressure from its developed-country allies to exclude Russia, said people, preferring anonymity. The Swiss trade envoy Ambassador Didier Chambovey, who has been the GC chair since 24 February, is yet to appoint a facilitator to oversee the discussions on the WTO’s response to the pandemic, said people, who asked not to be quoted. More importantly, Switzerland, which has eschewed its “neutrality” status and has chosen to impose economic sanctions on Russia, has also to decide whether it would allow the Russian trade minister to participate in MC12, said a person, who asked not to be quoted. SUSPENDING RUSSIA FROM WTO WON’T BE EASY The US campaign together with its allies to suspend/remove Russia from the WTO is not going to be easy, as such a decision is difficult to justify under the WTO rules, said a trade envoy, who asked not to be quoted. “The US and other developed countries succeeded only in bringing the negotiating processes to a halt and this is untenable,” the trade envoy said. Apparently, the ongoing small-group meetings have been either suspended or postponed due to opposition from the developed countries to Russia’s participation, said a person, who asked not to be quoted. Consequently, there has been little or no engagement on three vital “deliverables” for MC12 – the WTO’s response to the pandemic, a proposed fisheries subsidies agreement, and agriculture including the permanent solution for public stockholding programs for food security, the person said. The US and its allies would only be able to issue a joint statement along with other like-minded group members to condemn Russia and also simultaneously demand its expulsion from the small-group consultations, the person said. In a worst-case scenario, if there is no consensus to isolate/suspend Russia from the WTO, the US and its allies could decide the issue through voting as stipulated in Article IX.1 of the Marrakesh Agreement, the person said, adding that it would open the proverbial “Pandora’s Box” where countries may demand voting on other issues in the future. Any war-related complaint against Russia must be taken up at the United Nations and not the WTO, which is a rule-based forum only meant for negotiating new trade agreements, said another trade envoy, who asked not to be quoted. So far, Russia has argued that the WTO is not the forum to discuss the Ukraine issue. It has also remained silent over its likely exclusion from small-group meetings, but it may soon seek its place given its proposals on the three difficult issues, namely, the WTO’s response to the pandemic, fisheries subsidies, and agriculture, the trade envoys said. RUSSIA FIGURES IN TRIPS COUNCIL MEETING Ukraine made a strong intervention against Russia at the TRIPS Council meeting on 9 March, praising the Developed Countries Coordinating Group that has excluded Russia from its deliberations, and called on other members to refrain from engaging with Russia and not to remain indifferent to the current situation. Ukraine asked members to consider whether Russia’s continued participation in the WTO would be consistent with the objective and purpose of the WTO, as “the Russian Federation has clearly abandoned the basic principles and values that the GATT and the WTO have promoted for almost 80 years since the end of World War II.” Ukraine said that it does not see how members can conduct economic relations with the Russian Federation within the WTO on a business-as-usual basis in the present circumstances. The European Union, the United States, the United Kingdom, Canada, Norway, New Zealand, Korea, Japan, Switzerland, Trinidad and Tobago and Georgia took the floor to condemn Russia’s unprovoked and unjustified military aggression against Ukraine, which they said grossly violates international law and the UN Charter, and undermines international security and stability. These countries urged Russia to cease its military actions, withdraw all its troops from the entire territory of Ukraine and fully respect Ukraine’s territorial integrity, sovereignty and independence within its internationally recognized borders. Russia, however, reminded these countries that “the WTO is a rule-based trade organization and should remain as such.” Moscow asked members to refrain from raising political issues, suggesting that they are not within the scope of the WTO. In a nutshell, the concerted campaign launched by the US and its allies against Russia seems to have scuppered the ongoing negotiations on the “deliverables” for MC12. The consequence of these developments could result in the postponement of MC12, said people, who asked not to be quoted.
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