TWN Info Service on WTO and Trade Issues (May22/19)
25 May 2022
Third World Network

MC12 “modalities” suggest negotiations on five issues at WTO
Published in SUNS #9583 dated 25 May 2022

Geneva, 24 May (TWN) – The World Trade Organization’s 12th ministerial conference (MC12), scheduled for 12-15 June, appears to be a negotiating meeting on five issues including “WTO response to the Pandemic and TRIPS waiver”, “food crisis”, “fisheries subsidies”, “agriculture reform”, and “WTO reform”, organized around thematic sessions on these issues, according to the “modalities of sessions” document issued on 23 May.

The restricted informal “modalities” document (WT/MIN/(22)/INF/9) issued on 23 May, seen by the SUNS, provide that thematic sessions provide Ministers and Heads of Delegations “… an opportunity to engage with each other in a frank dialogue on these issues in an interactive, personable environment. The respective Minister Facilitators will chair these sessions and engage in further discussions/outreach in various configurations as necessary to finalize reaching specific decisions/ministerial guidance or other outcomes on any of these areas”.

This document seems to reveal the game-plan of the WTO Director-General, Ms Ngozi Okonjo-Iweala, that under the apparent pretext of the thematic sessions, she is actually going to pursue “decisions/ministerial guidance or other outcomes” through negotiating sessions involving trade ministers in different “configurations” that may include multiple “green room” meetings, on these issues, said people familiar with the development.

The modalities do not mention whether the ministers will negotiate on the mandated and unresolved issues like the permanent solution for public stockholding programs for food security purposes in developing countries, and special safeguard mechanism. However, it lists other issues like the food crisis, agricultural reform, and the WTO reforms, several of which are non-mandated. Nor does it mention the flexibilities sought by the least-developed countries for graduating LDCs.

Notwithstanding the lack of progress on major issues so far, the DG appears determined to plunge into negotiations by adopting seemingly “bullying” tactics on African countries, said an African trade official.

Effectively, the developing and least-developed countries should be prepared to face “take-it-or-leave-it” decisions at the eleventh hour and without engaging them in negotiations, said people, who asked not to be quoted.

It now appears somewhat clear that when the Director-General referred to some five deliverables in her recent exchanges with the trade lobbies in Washington, she also suggested that at least two decisions are likely to be concluded, said people familiar with the development.

However, she has never revealed what those two deliverables are going to be, said a person, who asked not to be quoted.

Interestingly, regardless of the progress made in these five areas which are supposed to figure in stocktaking meeting early next month, the modalities document indicates that she is going to turn MC12 into negotiating sessions like what happened at the WTO’s 10th ministerial conference in Nairobi, Kenya, in December 2015, and the 11th ministerial conference in Buenos Aires, Argentina, in December 2017, said people, who asked not to be identified.

MC12 MODALITIES DOCUMENT

Without mentioning Russia’s war against Ukraine, the modalities document says, “the reconvened MC12 – from 12 to 15 June 2022 will take place against a backdrop of an unprecedented pandemic, which triggered a significant socio-economic crisis with devastating effects including on lives and livelihoods across the globe.”

It says that “the uneven and fragile recovery from the COVID-19 pandemic, coupled with the current geopolitical situation since the postponement of MC12, have had important implications for global trade, the multilateral trading system, and vulnerable populations around the world.”

The document suggests that “households are directly affected by the current food and energy crisis, and we are now witnessing social unrest in some countries.”

At a time when the WTO’s enforcement function remains in tatters due to the US decision to block the selection of members to the Appellate Body since December 2019, the modalities document merely says, “the WTO itself has continued to face significant challenges in its core functions.”

The document provides that: “It is therefore not business as usual, which makes it imperative that Ministers address the reforms needed to make the WTO fit for purpose and ready to address 21st century challenges.”

Yet, the document does not explain how the undermining of the enforcement function as well as the inability to deliver on the negotiation’s issues under the Doha work program, particularly those of concern to developing countries and LDCs, are some of the major challenges currently facing the WTO.

The document goes on to ask Ministers to “address the reforms needed to make the WTO fit for purpose and ready to address 21st century challenges.”

However, the document does not answer as to what would happen to all the unresolved and mandated issues of the Doha work program which are still on the table, unless Ministers decide to terminate the negotiations at the ministerial conference, said people, who asked not to be quoted.

“We feel let down that none of our core issues in Doha work program, particularly in agriculture and development, have been addressed until now,” said an African trade envoy, who asked not to be quoted.

The restricted document says that “MC12 is a critical opportunity for Ministers to galvanize action, accomplish what needs to be done and provide much needed political guidance to enable the WTO to be more responsive to the challenges faced by all its Members.”

It goes on to say that “a business-like and streamlined format (for MC12) is appropriate to enable frank exchanges amongst WTO Ministers and Heads of Delegation on the most pressing issues of our time and act decisively on the critical menu of issues before the WTO.”

In the second paragraph (2.3) of the modalities document under the sub-heading “action by Ministers”, it says that “during the Formal Closing Session, Ministers and Heads of Delegation are expected to take action that they deem necessary for the work of the WTO.”

“This may include any action on ministerial declarations or decisions,” it says, adding that “to prepare the finalization of such action, several informal sessions will be convened from 13 to 15 June. A non-exhaustive list of areas that could be taken up – based on views that Members have expressed – can be found below under the sub-heading 3.3 Thematic Sessions on Specific Areas”.

The tentative schedule of meetings set out in the modalities document says that “in line with the business-like and streamlined format of the Conference and to effectively and urgently respond to the challenges that the world and the WTO face, the table below provides a proposed order of meetings and informal sessions during the Conference.”

It also says that MC12 is proposed to have informal thematic sessions on fisheries subsidies, agriculture reform, the WTO’s Response to the Pandemic and TRIPS Waiver, the current food crisis and WTO Reform.

“This does not preclude the possibility of a session or sessions on other matters, if need be, for example on the e-commerce moratorium and work programme or the outcome document,” according to the document.

It maintains that “this non-exhaustive list reflects some of the key areas in which Members have indicated interest in Ministerial exchange for guidance.”

The ministerial sessions, which will be held at the big Council Room within the WTO, include (1) formal opening session of the Ministerial Conference to be followed immediately by an informal heads of delegation meetings on 12 June; (2) ministerial thematic sessions and horizontal heads of delegation meeting on 13 June; (3) continuation of thematic sessions and horizontal HOD meeting on 14 June; and (4) thematic sessions and HODs meeting to be followed by formal closing session on 15 June.

As regards description of each session, the document suggests that “on 12 June, the ministerial conference will formally open,” and subsequently the “General Council Chair will then formally transmit to Ministers and Heads of Delegation work from WTO bodies for their consideration at the Conference – including under the agenda “Action by Ministers”.”

For setting the context for the informal sessions, the document says that “the meeting will shift to informal mode, in which Ministers and Heads of Delegation will hear reports from the General Council Chair, the Facilitator on the WTO’s Pandemic Response, and Chairs of the TRIPS Council, Negotiating Group on Rules, and Committee on Agriculture in Special Session on progress in their respective areas highlighting specific points for the attention of Ministers and Heads of Delegation during the conference.”

There will also be a dedicated session on the challenges facing the “Multilateral Trading System”, and following the discussion, the thematic sessions will be held on fisheries subsidies, agriculture reform, the WTO’s Response to the Pandemic and TRIPS Waiver, the current food crisis and WTO Reform will take place from 13-15 June. This does not preclude the possibility of a session or sessions on other matters, if need be, for example, on the e-commerce moratorium and work programme or the outcome document.”

While the thematic sessions are currently organized in a consecutive order, it is not clear whether this approach will be maintained. One can imagine that if certain sessions are added, as suggested by the document, or if work on one theme does not end in the allocated time (which is currently set for 3 hours for each theme), then these sessions will have to be held simultaneously, which could create major challenges for delegations to follow and effectively participate.

The table in the document outlines the facilitators in each area. The specific areas include:

1. WTO response to the Pandemic and TRIPS waiver to be chaired by a Minister Facilitator, who will be assisted by the facilitator of the WTO response to the pandemic, Ambassador Dacio Castillo of Honduras, and the chair of the WTO’s TRIPS Council, Ambassador Lansana Gberie of Sierra Leone;

2. Food crisis to be chaired by a Minister Facilitator, who will be assisted by the chair of the Doha agriculture negotiations, Ambassador Gloria Abraham Peralta of Costa Rica;

3. Fisheries subsidies to be chaired by a Minister Facilitator, who will be assisted by the chair of the Doha Rules negotiations, Ambassador Santiago Wills of Colombia;

4. Agriculture reform to be chaired by a Minister facilitator, who will be assisted by the chair of Doha agriculture negotiations, Ambassador Gloria Abraham Peralta of Costa Rica;

5. WTO reforms to be chaired by a Minister Facilitator who will be assisted by the chair of the WTO’s General Council, Ambassador Didier Chambovey of Switzerland.

Besides, for transparency purposes, at the end of each day, the Director-General and MC12 Chair will convene a Heads of Delegation Meeting, an “occasion for Ministers and Heads of Delegation to be updated on all of the meetings, outreach efforts and discussions throughout the day by facilitators and delegations. The HoDs will also assist Ministers in their preparations for the sessions the following day.”

On the formal closing session of the Ministerial Conference, the document says that “on 15 June, the Ministerial Conference will convene in formal mode to take any action including gavelling final agreements or decisions as appropriate.

In short, the modalities document indicates that there seem to be no clear deliverables for the developing/ least- developed countries on the table at MC12, and even the proposed fisheries subsidies agreement is replete with carve-outs for the big subsidizers like China, the United States, the European Union, Canada, and other developed countries.

Last but not least, the modalities document and the way the negotiations on various issues have been developing, along with the over-emphasis on the narrative that the WTO has to deliver, seems to point towards likely “take-it-or -leave-it” decisions that may be foisted on the developing/LDCs at the eleventh hour on 15 June.