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TWN
Info Service on WTO and Trade Issues (Sept22/03)
Trade: Developing countries need to stand united against US-EU
WTO reforms Washington DC, 2 Sep (D. Ravi Kanth) -- The developing countries have their tasks cut out for them at the World Trade Organization as the United States and the European Union are expected to up the ante on "WTO reform, food security, respective engagements with third countries" and "non-market economic policies and practices" among others. Even before the ink has dried on the outcomes reached at the recently concluded WTO's 12th ministerial conference (MC12) in Geneva on 17 June, signals have already begun to emerge from the two trans-Atlantic giants about their discussions on a range of multilateral and bilateral issues, including clean energy technologies. In a press release issued after what appears to be a virtual discussion between the US Trade Representative (USTR) Ambassador Katherine Tai and the EU Trade Commissioner Mr Valdis Dombrovskis on 1 September, the two sides apparently exchanged ideas on the "US-EU Trade and Technology Council, the upcoming G-7 and G-20 meetings, WTO reform, food security, respective engagements with third countries, and non-market economic policies and practices." Apparently, the two sides committed "to continue working on concrete deliverables ahead of the next Trade and Technology Council Ministerial." The two members, according to the press release, also discussed "issues related to the EU cybersecurity scheme and the electric vehicle tax credits (several countries reckon these credits as subsidies)" in President Joe Biden's recently signed Inflation Reduction Act. The two trade chiefs also discussed "the shared need to increase investments in clean energy technologies to seriously combat the climate crisis, as well as supply chain and security vulnerabilities." Ambassador Tai and Commissioner Dombrovskis plan to hold a number of bilateral meetings throughout the year on all these issues. FISHERIES SUBSIDIES AGREEMENT PROTOCOL Significantly, the press release does not indicate whether the two sides discussed the fisheries subsidies agreement, especially on the implementation of the MC12 outcome on IUU (illegal, unreported, and unregulated) fishing and the rules set out in the agreement plus the protocol that has to be ratified by the US and the EU member countries. Unless two-thirds of the WTO members ratify the fisheries subsidies agreement, it will not come into force. Unconfirmed reports indicate that the WTO's Director-General, Ms Ngozi Okonjo-Iweala, may travel to several countries to canvass for speedy implementation of the protocol, said people familiar with the development. More importantly, it is not clear what the US intends to do as regards ratifying the fisheries subsidies agreement, as it had apparently indicated that the new agreement would need "legal scrubbing", which implies that the agreement has to undergo a thorough legal scrutiny, said people familiar with the development. At the last General Council (GC) meeting held at end-July, the US statement on the need for "legal scrubbing" apparently caused some "legal scrubbing" among the members. Subsequently, several members appear to have decided that they will wait to implement the protocol until the full agreement encompassing the proposed disciplines for overcapacity and overfishing and overfished stocks are negotiated in the next one and a half years before the 13th ministerial conference, said people familiar with the development. The chair of the Doha fisheries subsidies negotiations, Ambassador Santiago Wills from Colombia, had also clarified at the GC meeting that once members agreed on the new fisheries subsidies agreement, including the protocol, the only thing left for members is its ratification, followed by implementation, said people familiar with the development. In a similar vein, it is not clear what is going to be the US stance on the need to decide on the "extension to cover the production and supply of COVID-19 diagnostics and therapeutics." The US apparently indicated at the last GC meeting that there is no deadline to decide on the extension to cover the production and supply of COVID-19 diagnostics and therapeutics within six months. It maintained that members are only required to discuss the issue of extension, said people, who asked not to be quoted. WTO REFORMS Interestingly, there is no mention in the press release of the unresolved issues like agriculture. But the US chose to mention WTO reforms in the press release, though it has not clarified what exactly was discussed on this divisive issue with the EU. Many developing countries have proposed development-oriented reforms while the developed countries have not clearly indicated what their priority areas are in the proposed WTO reforms. Although ideas have been mooted for bringing about differentiation among developing countries for availing of special and differential treatment as well as suggestions to do away with the principle of consensus-based decision-making, there has been no concrete proposal by the developed countries so far as part of WTO reforms. In paragraph three of the MC12 outcome document (WT/MIN(22)/24) issued on 17 June, it is outlined: "We acknowledge the need to take advantage of available opportunities, address the challenges that the WTO is facing, and ensure the WTO's proper functioning. We commit to work towards necessary reform of the WTO. While reaffirming the foundational principles (as set out in the Marrakesh Agreement) of the WTO, we envision reforms to improve all its functions. The work shall be Member-driven, open, transparent, inclusive, and must address the interests of all Members, including development issues. The General Council and its subsidiary bodies will conduct the work, review progress, and consider decisions, as appropriate, to be submitted to the next Ministerial Conference." However, there is a footnote attached to paragraph three which states that "for greater certainty, in this context, this does not prevent groupings of WTO Members from meeting to discuss relevant matters or making submissions for consideration by the General Council or its subsidiary bodies." Clarifying this crucial paragraph, the chair of the WTO's General Council, Ambassador Didier Chambovey of Switzerland, said at the GC meeting end -July that "Paragraph 3 contains the "launching pad" for Member-driven, open, transparent and inclusive reform discussions. It also stipulates that the General Council and its subsidiary bodies conduct the work, review progress, and consider decisions, as appropriate, to be submitted to the next Ministerial Conference. As you know, there is a footnote clarifying that this does not prevent groupings of WTO Members from meeting to discuss relevant matters or making submissions for consideration by the General Council or its subsidiary bodies." This is where the danger of WTO reforms being ambushed with controversial proposals from the so-called Ottawa Group of countries led by Canada and other major developed countries cannot be ruled out. It remains to be seen how these proposals would be mooted and whether they would undermine the Marrakesh Agreement by giving special status for pursuing plurilateral agreements among others, said people familiar with the development. Unless the developing countries remain vigilant and solidly united on the WTO reforms, they may find themselves with a new set of rules by 2024 that would virtually exclude them from availing their rights in the coming years at the WTO. +
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