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Info Service on WTO and Trade Issues (Feb23/04) Geneva, 6 Feb (D. Ravi Kanth) — The two-day informal meeting on “WTO reform focused on development modalities” which concluded on 3 February at the World Trade Organization seems to have opened a “Pandora’s Box” of broken promises, unfulfilled ministerial mandates, and constant goal-shifting on development-oriented mandated issues, particularly the special and differential treatment (S&DT) provisions, said people familiar with the discussions. At the concluding session of the informal meeting convened on 3 February by the chair of the WTO’s General Council (GC), Ambassador Didier Chambovey from Switzerland, many developing and several least-developed countries apparently brought to the center stage numerous issues concerning the mandated issues on development that remain unfilled since the launch of the Doha Development Agenda (DDA) round of trade negotiations in 2001, said people, who asked not to be quoted. More importantly, major developed countries, including the United States and the European Union, seem to have adopted “soft” positions somewhat reluctantly, said people, who asked not to be quoted. Apparently, Norway suggested a “safe box” to address issues concerning development, particularly for LDC- specific issues, a suggestion that was supported by the EU, said people, who asked not to be quoted. Nevertheless, the long list of issues raised by the developing and least-developed countries on how goal-posts seem to have been shifted on development, especially S&DT, including the ten Agreement-specific proposals raised by the Group of 90 (G90) countries, has apparently “shown the mirror” about the WTO’s repeated failures to address development-oriented issues raised by developing countries since the launch of the DDA negotiations, said several people, who asked not to be quoted. STATEMENTS BY GC CHAIR & DG The GC chair, Ambassador Chambovey, convened the two-day informal meeting in order to elicit members’ views on the questions that he posed in his restricted document (Job/GC/334). The questions he had posed in his restricted document include: (1) How do members view development in the WTO?; (2) How can the opportunities in the WTO system help Members achieve their development objectives?; (3) Within the WTO context, what challenges need to be addressed to ensure that all Members are in a position to achieve their development objectives?; and (4) What concrete steps and actions are needed to use the opportunities in the WTO system and address identified challenges to achieve Members’ development objectives? After the first day’s breakout sessions conducted in four different groups on 2 February, the four facilitators – Ambassador Ahmad Makaila of Chad, Ambassador Petter Olberg of Norway, Ambassador Ms Sofica Boza Martinez of Chile, and Ambassador Dr Muhammad Mujtaba Piracha of Pakistan – provided their respective reports at the concluding session. The WTO’s deputy director-general Mr Xiangchen Zhang orally provided a comprehensive summary of all the issues raised by members. A written statement of comments made by Mr Zhang is yet to be issued. In remarks posted on the WTO website on late 3 February, the director-general Ms Ngozi Okonjo-Iweala said, “When developing countries prosper, this creates a huge opportunity for all, developing and developed, because you have more meaningful trade partnerships, and more meaningful strategic cooperation.” “Let’s take this issue and let’s turn it into a positive that can help us move forward in this organization,” she said. According to the Outcome Document of the WTO’s 12th ministerial conference (MC12) held last June, members agreed to undertake reform of the WTO, which seems like an amorphous task, to improve all its functions. On the face of it, one major function i.e., enforcement that ensures implementation of the binding decisions of the Appellate Body remains impaired due to the dysfunctional Appellate Body. Consequently, China said on the first day of the informal meeting that there is little use to discuss either development or WTO reforms when the enforcement function remains non-operational, said people familiar with the Chinese statement. In his concluding remarks, the GC chair, Ambassador Chambovey, welcomed the candid exchanges among members on the way forward. “In my view, this has been a great start towards enabling development to permeate the WTO work and facilitate us in advancing in all areas,” he said. “Through your constructive participation, we have built good momentum in WTO reform work. My ask of you is to not let this momentum slip.” “I think that we have made a significant step forward in our development discussions,” added Deputy Director- General Zhang, who moderated the plenary session. “Amid the plethora of views shared today, I detect members’ commitment to build on these difficult but necessary discussions. There is a clear desire to advance together to enable the WTO to facilitate the achievement of members’ development objectives.” MAZE OF ISSUES At the concluding plenary meeting on 3 February, developing countries seem to have demanded that the many mandated issues that were agreed upon by trade ministers since 2001, must be addressed without delay, said people who asked not to be quoted. India apparently urged the WTO Secretariat to provide a full account/audit of issues on development that have not been addressed so far from the previous ministerial mandates, said people, who asked not to be quoted. India noted that in 2011, the former WTO director-general Pascal Lamy apparently provided a detailed account of the development issues that remained unaddressed, said people familiar with the discussions. POLICY SPACE India along with many developing and least-developed countries emphasized the need for “policy space” for pursuing autonomous development-oriented initiatives such as digital industrialization. As part of development in WTO reform, India apparently urged an agreement on the extension of the MC12 Ministerial Decision on the TRIPS Agreement. India apparently said that members need to extend the TRIPS Decision to diagnostics and therapeutics. Indonesia, which raised several issues about the process and substance of issues concerning development, is understood to have supported India’s call for providing an audit of mandated issues that remain unfulfilled, said people, who asked not to be quoted. Indonesia said development issues that are cross-cutting in nature should be discussed in the Committee on Trade and Development. It argued that the lack of fulfilling the mandated issues on development could have serious ramifications for all members, suggesting that the failure to address development issues in agriculture, the fisheries subsidies negotiations, and the moratorium on customs duties on electronic transmissions could have a “domino effect.” Most members raised cross-cutting issues. Apparently, countries from the GRULAC (Latin American and the Caribbean Group) spoke about issues concerning development in agriculture and food security. At the informal closed-door two-day retreat that began on 2 February at the WTO’s premises, developing countries including South Africa, Indonesia, India, Egypt, and many others seemed to have stood their ground that S&DT is a treaty-bound and an integral part of the rule-based WTO’s architecture, said people, who asked not to be identified. Uruguay apparently said that development has been at the center stage since the Uruguay Round of trade negotiations, complaining that major developed and some developing countries continue to provide massive farm subsidies, said people, who asked not to be quoted. Several developing countries, including South Africa, India, Egypt, and Indonesia, seem to have emphasized that special and differential treatment based on self-declaration/designation by developing countries is a treaty-bound right. They contended that previous ministerial mandates clearly stipulated that S&DT must be strengthened. China said that it is up to developing countries to decide whether to avail of S&DT or opt out from using it, maintaining that it is “voluntary” for countries to decide, said people, who asked not to be quoted. At MC12 last June, China opted out from availing of the TRIPS Decision concerning vaccines, as part of a bilateral understanding between the US and China. REVERSE S&DT Several developing countries also pointed to the reverse S&DT availed of by the major developed countries in agriculture, arguing that the asymmetries in WTO rules that favour developed countries continue to provide distortions in global farm trade, said people, who asked not to be quoted. India apparently cited the 35-year-old external reference price of 1986-88, which is the basis for calculating agricultural subsidies, that leads to major distortions in the calculation of Aggregate Measurement of Support (AMS). India also suggested that the external reference price must be updated by taking recent three-year or five-year rolling prices to address the distortions in agriculture subsidies calculations. Without fulfilling the mandated issues, it would be difficult to make real progress on WTO reform, said several developing countries. Djibouti, which is the coordinator for the least-developed countries (LDCs), delivered a strong statement at the meeting about the LDC issues, including the LDC graduation issue. Several LDCs such as Cambodia, spoke about the three vulnerable issues – the three Cs, namely, Conflict, COVID, and Climate Change – emphasizing how their issues must be addressed on a special footing, said people, who asked not to be quoted. South Africa appears to have underscored the need to deliver on the mandated issues, as well as the need to strengthen the Committee on Trade and Development (CTD). Several countries supported UNCTAD’s latest Trade and Development Report, suggesting that it offered a blueprint for addressing and pursuing development issues in areas of digital trade and trade and environment. THE EU & THE US Several industrialized countries such as the European Union indicated their willingness to address the issue of LDC graduation and the specific flexibilities sought by those countries set to graduate from LDC status. The EU apparently said there is a need to reflect on LDC graduation, adding that members should consider how to strengthen the Committees. According to people present at the meeting, Norway spoke about creating a “safe box” to address the LDC issues, which was apparently supported by the EU. The EU also spoke about facilitation issues, including the plurilateral Joint Statement Initiative (JSI) on investment facilitation, and the interface between trade and environment, particularly climate change. Without mentioning the US Inflation Reduction Act and the large green subsidies being provided under it, the EU seems to have touched on the huge investment subsidies provided by some members. Brussels also emphasized the urgent need to restore the two-stage dispute settlement system, particularly the resurrection of the Appellate Body. The US, however, remained somewhat silent on the demands put forth by the LDCs, said people, who preferred not to be quoted. In the face of growing calls at the informal meeting for a well-functioning two-stage dispute settlement system, particularly the restoration of the Appellate Body (AB), the US appears to have said that it is working on improving the dispute settlement system, according to people, who spoke to SUNS on the condition of anonymity. The US, which has made the AB dysfunctional since December 2019 by repeatedly blocking the selection of its members, appears to have given no details on how it is going to improve the dispute settlement system. In conclusion, the informal meeting on development seems to have “shown the mirror” on the WTO’s failure to address mandated issues on development and also constant goal-shifting on development-oriented issues, said people, who spoke to SUNS on the condition of anonymity. +
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