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TWN
Info Service on WTO and Trade Issues (Oct22/06)
Trade: WTO DG proposes controversial hybrid agenda for trade
body's reform Geneva, 7 Oct (D. Ravi Kanth) -- After meeting a delegation of members of the United States Congress on 6 October, the World Trade Organization's Director-General, Ms Ngozi Okonjo-Iweala, has upped the ante on WTO reforms by suggesting a controversial hybrid agenda, including a top-down approach to identify two or three cross-cutting issues for the WTO's negotiating pillar. At the WTO's General Council (GC) meeting on 6 October, the DG delivered a long statement touching on several issues including WTO reforms, extending the MC12 TRIPS decision on vaccines to cover diagnostics and therapeutics, reform of the dispute settlement system, and agriculture, which appear to have revealed her intentions, said people, who asked not to be quoted. WTO REFORMS On WTO reforms, the developing countries have unambiguously stated their development-oriented priorities while the Northern countries seem to have adopted rather "stealthy" approaches so far. (See SUNS #9625 dated 28 July 2022). Against this backdrop, the DG said that a delegation of members of the US House Ways and Means Committee said that "WTO Reform is key to members of the US Congress and business community." Though the DG did not reveal what other issues were discussed during the meeting with the US Congress team, she said "absent the movement of this reform, the WTO will not be seen as delivering," emphasizing that "we really have to work on issues of WTO Reform." Delivering her report as the chair of the Doha Trade Negotiations Committee (TNC), the DG said "the coverage of WTO reform is quite large," suggesting that acting "on all fronts at once would lead us to gridlock." Earlier in July, the DG had said, "I simply want to reiterate the need to develop common understandings about what reform is, build on that and act with a sense of urgency - including in resolving the Appellate Body issue - a matter that many Leaders have raised." (See Job/GC/315.) Yet, in her latest statement at the GC meeting on 6 October, Ms Okonjo-Iweala has pushed for "a hybrid approach - bottom-up for the deliberative function in WTO bodies and top-down in identifying one or two cross-cutting issues that we can deliver possibly at MC13." However, the DG did not indicate why a "bottom-up" approach cannot be adopted for discussing the negotiating function where the US and other industrialized countries seem determined to legalize the plurilateral route based on the criteria of "critical mass", differentiation among developing countries for availing of special and differential treatment (S&DT) or doing away with the principle of consensus-based decision making, said a trade envoy, who asked not to be quoted. Several developing countries are calling for the negotiations on WTO reform to be held in the General Council, suggesting that issues must be decided and negotiated without any top-down, "stealthy" approach, said a trade envoy, who asked not to be quoted. Without resolving the mandated issues, the DG's apparent penchant for non-mandated issues has also come into the open. "Members also have an opportunity to discuss the future of trade - which I remain convinced, and I say this everywhere that the future of trade is services, digital, green, and should be inclusive," she said. The future of world trade lies in removing the asymmetrical WTO rules in agriculture, and other areas that are hanging unaddressed from the Bali and Nairobi ministerial outcomes - issues like the permanent solution for public stockholding (PSH) programs for food security, the special safeguard mechanism (SSM) for developing countries, and several other issues, the trade envoy said. Essentially, the DG seems determined to promote the Joint Statement Initiative (JSI) on digital trade and the controversial trade and environment issues, which remain in the realm of the non-mandated plurilateral fora, the envoy added. DISPUTE SETTLEMENT SYSTEM On the paralyzed two-stage dispute settlement system since December 2019, due to the repeated blocking by the US of the selection process for filling the vacancies on the Appellate Body, the DG said: "we must act with a sense of urgency in line with paragraph 4 of the MC12 Outcome Document whilst giving full space to the process that is underway now of consultations led by the United States to have its time until the end of the year, as they have requested." Paragraph 4 of the MC12 Outcome Document states: "We acknowledge the challenges and concerns with respect to the dispute settlement system including those related to the Appellate Body, recognize the importance and urgency of addressing those challenges and concerns, and commit to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024." It remains unclear whether the DG is referring to the informal consultations started by the US with a group of developing countries at the recently held G20 trade ministers' meeting in Bali or some other consultations taking place at the WTO, said a participant, who asked not to be quoted. According to sources, even if an "emaciated" Appellate Body (AB) is agreed to by the United States, Washington seems to be working on what is called the "positive consensus" principle that was followed during the GATT days wherein any member can block the Appellate Body's recommendations. The AB was created, following the Uruguay Round negotiations, on the basis of what is called the "negative consensus" principle under which the AB's recommendations in a dispute can only be rejected with the consent of all the members and not just by one member, said sources, who preferred not to be identified. TRIPS DEADLINE FOR DIAGNOSTICS & THERAPEUTICS With just about two months left to extend the compromise reached on COVID-19 vaccines to cover diagnostics and therapeutics, the DG's remarks at the GC meeting on this issue are somewhat misleading, said a trade envoy, who preferred not to be quoted. While the DG emphasized on the need to constructively engage in the discussions in the TRIPS Council under the leadership of its chair, Ambassador Lansana Gberie of Sierra Leone, she has suggested in her budget proposal for more "data and analysis on COVID therapeutics and diagnostics to support discussions related to MC12 decision. This work will require additional analytical resources." (See SUNS #9654 dated 27 September 2022). Also, her comment at the GC meeting that "we have heard H.E. Luz Maria de la Mora Sanchez of Mexico say that this (meeting the 17 December deadline to extend the TRIPS decision on vaccines to cover therapeutics and diagnostics) will not be easy ... I agree with her" - has caused confusion, as it would be tantamount to ruling out any likelihood of meeting the deadline, said another trade envoy, who asked not to be quoted. AGRICULTURE On agriculture, the DG's comments at the GC meeting suggested changing the approach to the agriculture negotiations, as she says that much has changed in these negotiations. "We are no longer today where we were 22 years ago ... much of the context in which agriculture takes place has changed." Her proposed "retreat" on agriculture on 24 October, which will now take place at the WTO instead of the Evian Hilton hotel in France, is focused on trade and sustainability but not on how to frame the agriculture work program, said a trade envoy, who asked not to be quoted. In her statement, the DG said, "I would hope that at the retreat on 24 October, we will be able to listen to new ideas from scientists and agricultural trade specialists who would take through some of the changes that they see in the world. If we stand back and absorb this information, I hope it will animate the way we think about approaching agricultural negotiations." "So, this will not be an exercise in academics or just having theoretical presentations. It is an exercise in telling us what is really happening on the ground and challenging us to see how we should factor these developments into the way we approach agriculture negotiations in the future," the DG said, suggesting that "I hope this retreat will work and serve as a catalyst to help Members think freshly and innovatively." In effect, Ms Okonjo-Iweala said that "I hope we will not just retreat back into our normal statements but really come with open minds and fresh approaches." While she acknowledged the Cairns Group retreat, the DG emphasized the "urgent, present and long-term climate and water challenges." However, she did not indicate that there is a divide within the Cairns Group of farm-exporting countries, between those industrialized countries like Australia, New Zealand, and several others on the one side, and the major South American developing countries, on the other, over issues concerning attempts to force what some South American members call "greenwashing" as well as attempts to force protectionist measures on developing countries engaged in exporting rice, and meat and poultry products, said a South American trade official, who asked not to be quoted. The DG needs to be careful in bringing in the OECD agenda on subsidies and climate change, which are not part of the WTO's mandated menu of unresolved issues, the South American trade official said. The DG also emphasized on the "MC12 Ministerial Declaration on Emergency Response to Food Insecurity" and encouraged Members to implement its provisions. Ms Okonjo-Iweala lamented about export restrictions and prohibitions, giving an estimate of such measures currently being deployed by members. "We have now added 11 new restrictions on food, fertilizer, and other inputs, and we are back to 53," she said, arguing that "this is certainly not a trend to be applauded. I would like to strongly request Members to please look at this because these export restrictions and prohibitions do have an impact on international prices for food and they do have an impact on the availability of inputs such as fertilizers moving from one part of the world to the other where it is needed." She urged for reversing "this trend and be able to report that we are moving back in the right direction." REJUVENATION OF E-COMMERCE WORK PROGRAM At the GC meeting, India and South Africa presented their joint paper on rejuvenating the e-commerce work program of 1998, particularly the issue of terminating the moratorium on levying customs duties on electronic transmissions. MC12 has mandated members "to reinvigorate the work under the Work Programme on Electronic Commerce, based on the mandate as set out in WT/L/274 and particularly in line with its development dimension." It calls for intensifying "discussions on the moratorium and instruct(s) the General Council to hold periodic reviews based on the reports that may be submitted by relevant WTO bodies, including on scope, definition, and impact of the moratorium on customs duties on electronic transmissions. We agree to maintain the current practice of not imposing customs duties on electronic transmissions until MC13, which should ordinarily be held by 31 December 2023. Should MC13 be delayed beyond 31 March 2024, the moratorium will expire on that date unless Ministers or the General Council take a decision to extend." Sri Lanka, Indonesia, and several other countries supported the joint paper, suggesting that it offers a route for rejuvenating the discussion without further delay, and underscoring the need to adhere to the mandate, said a person, who asked not to be quoted. The US trade envoy Ambassador Maria Pagan apparently said while the US is ready to engage in the discussions, it is not sure whether the 1998 work program and the mandate are still valid, the person said. LOBBYING FOR MC13 VENUE The lobbying for the MC13 venue seems to have gotten underway in full earnest, when the trade minister of Cameroon, Mr. Luc Magloire Mbarga Atangana, and Dr. Thani bin Ahmed Al Zeyoudi, the Minister of State for Foreign Trade of the United Arab Emirates (UAE), presented their offers to host MC13. While the GC chair, Ambassador Didier Chambovey of Switzerland, will oversee the discussions on the venue for MC13, privately, some trade envoys are suggesting that in all likelihood the scales could be tilted in favour of Cameroon to host MC13. +
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