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Info Service on WTO and Trade Issues (Mar23/07) Geneva, 24 Mar (D. Ravi Kanth) — A large majority of developing and least-developed countries joined forces at the World Trade Organization on 20 March to demand substantial outcomes on the G-90’s ten Agreement-specific proposals for making special and differential treatment (S&DT) simple and effective, said people familiar with the development. The 10 Agreement-specific proposals were crystallized from the 150-odd proposals from the Doha work program. Since 2002, the United States and other developed countries repeatedly created one barrier or another, even to the extent of refusing to engage in discussions on the proposals. This time around the credibility of the WTO has been badly hit by the failure to extend the WTO’s 12th ministerial conference (MC12) Ministerial Decision on the TRIPS Agreement to COVID-19 diagnostics and therapeutics. Now it remains to be seen whether the WTO can deliver on the critical needs of developing and least-developed countries as explained in the G-90 proposal by the 13th ministerial conference (MC13), to be held in Abu Dhabi in February 2024, said participants, who asked not to be quoted. The United States has apparently indicated that it is ready to discuss a comprehensive proposal tabled by a large majority of developing and least-developed countries. Up until now, the US has repeatedly refused to engage with the G-90 countries on their proposal, as the improvements sought for making the S&DT provisions simple and effective were allegedly unsustainable, said people familiar with the discussions. However, the US, bound by paragraph two of the Outcome Document of MC12 that was held in June 2022, apparently reluctantly concurred with a proposal tabled by the G-90 countries for enhanced formal and informal discussions in the run-up to MC13. Trade ministers at MC12 reaffirmed “the provisions of special and differential treatment for developing country Members and LDCs as an integral part of the WTO and its agreements.” The trade ministers also reiterated that “special and differential treatment in WTO agreements should be precise, effective and operational.” Paragraph two of the MC12 Outcome Document states that “… we recall that trade is to be conducted with a view to raising standards of living, ensuring full employment, pursuing sustainable development of Members, and enhancing the means for doing so in a manner consistent with Members’ respective needs and concerns at different levels of economic development.” Trade ministers instructed “officials to continue to work on improving the application of special and differential treatment in the CTD SS and other relevant venues in the WTO, as agreed and report on progress to the General Council before MC13.” At a negotiating session of the Committee on Trade and Development (CTD) on 20 March, the US concurred with the members of the African Group, the ACP (African, Caribbean, and Pacific) group, and the Least-Developed Countries (LDCs) for dedicated formal and informal meetings in the run-up to MC13, said participants, who asked not to be quoted. Apparently, the European Union adopted a more conciliatory approach as compared to the US by agreeing to work with the G-90 members for addressing their specific concerns in their 10 Agreement-specific proposals, the participants said. At the special CTD session, India, China, Cuba, and Nicaragua among others supported the G-90 proposal, underscoring the need for resolving the specific issues raised in the G-90 proposal by MC13, participants said. The WTO’s Director-General, Ms Ngozi Okonjo-Iweala, in her remarks at the meeting, admitted that “more still needs to be done to ensure that special and differential [treatment] provisions are fit-for-purpose and responsive to the genuine needs of developing members.” She also said that “special and differential [treatment] provisions are not ends in themselves, they are a means of enabling and empowering developing countries and LDCs to use the opportunities created by the WTO, to improve people’s lives on the ground.” The DG also mentioned the Trade Facilitation Agreement and the partial Fisheries Subsidies Agreement. Ahead of the meeting, South Africa, on behalf of the African Group, the ACP Group, and the LDC group, submitted a new proposal explaining the underlying rationale and the importance of addressing the 10 Agreement-specific proposals on a war footing, said participants, who preferred not to be identified. DEVELOPMENT DIVIDE South Africa introduced the restricted G-90 proposal (Job/TN/CTD/2, Job/TNC/106) spelling out the central goals as stated in the Marrakesh Agreement. The large majority of developing and least developed countries argued that “Special and differential treatment (SDT) was embedded in WTO agreements precisely as an acknowledgement of the different levels of economic development and capacities among its membership and the role that trade should play in bridging the development divide which finds expression in a number of forms, including infrastructure, prosperity, technology, industrialisation, digital connectivity, etc.” The proponents said that constructive “exchanges and interaction at the Informal General Council Meeting on WTO Reform focused on Development on 2-3 February 2023 revealed consensus among WTO Members on the centrality of development as a fundamental objective of the multilateral trading system.” Significantly, members “reasserted their commitment to the founding principles and objectives of the WTO, in particular, that trade is not an end in itself, but a means towards … raising the standards of living, ensuring full employment and to enhance the means of doing so in a manner consistent with their respective needs and concerns at different levels of economic development.” The proponents expressed confidence that “political commitment and guidance provides a clear pathway and necessary impetus towards the review of all special and differential treatment provisions with a view to strengthening them and making them more precise, effective, and operational in line with paragraph 44 of the Doha Ministerial Declaration.” The proponents emphasized that developing and least developed countries face bigger challenges today as they are still grappling with “the lingering devastating impact of the COVID-19 pandemic on their economies and remain constrained in realising equitable and meaningful integration into the global economy and reaping gains from the “post-pandemic” recovery, these countries are now contending with new sets of external shocks such as rocketing inflation, the food and energy crises, and balance of payment challenges, among a host of threats.” With the global economy facing heavy headwinds and continued disruptions to global supply chains, they highlighted “the disproportionate impact of these global economic shocks for developing countries, including LDCs relative to more resilient developed economies with the resources and capacities to cushion and withstand negative economic shocks.” The proponents said that they are committed to the pursuit of meaningful mainstreaming of development in the WTO and its agreements. Part of the problem with the S&DT provisions is that they are somewhat vague in the current WTO agreements making it difficult for the developing countries and LDCs to implement them, they said. They recalled that the 10 Agreement-Specific Proposals (ASPs) have been a result of serious consideration over several years and have undergone arduous rationalization from what were over 150 ASPs. The G-90 proposal says that “while some 75% of WTO Members are currently developing countries, the promises of welfare gains from trade liberalization have not materialized for a majority of them or at the least been much more modest than anticipated when the WTO was established.” Therefore, it is important to provide “the necessary clarity and certainty to the policy space and flexibilities accorded in theory in the 10 ASPs,” as “they positively contribute to the industrialization, economic diversification and structural transformation of its members and ensure their integration into the multilateral trading system.” The proponents highlighted their specific concerns in their 10 Agreement-specific proposals, which encompass:
The G-90 proposal stressed that “as was numerously pointed out at the Informal General Council Meeting on WTO Reform Focused on Development, improving the development prospects of developing countries, including LDCs and narrowing the development divide is in the interests of all members, including developed countries.” It said there is growing evidence today that points “to a growing use of policy tools that are deployed especially by developed countries, including the adoption of measures to promote industrial development, build supply- chain resilience, among other objectives, and to address specific vulnerabilities.” The proposal drew attention to an unofficial room document (RD/TN/CTD/1 and RD/TN/CTD/1/Add.1) circulated by the G-90 and Sri Lanka in September 2022. That proposal underscored the need for “a series of CTD-SS formal meetings dedicated to focussed, technical discussions on all the 10 ASPs over 4-5 meetings” and “these could be complemented by informal open-ended meetings, as necessary to facilitate substantive negotiations based on proposals by members on the ASPs within each of the 10 ASPs.” The proponents urged the chair of the CTD in Special Session, Ambassador Kedra Ahmed Hassan of Djibouti, “where it is deemed requisite and feasible, organise a workshop and invite relevant experts, including from institutions such as UNCTAD and members of the WTO Secretariat responsible for the agreements under which the ASPs fall to apprise the Committee on the implementation of relevant SDT provisions in those agreements, including factual data and information that could assist the CTD-SS to appreciate the technical matters at hand.” The G-90 members also requested the chair to take up “substantive discussions on ASP 4 on the Agreement on the Application of Sanitary and Phytosanitary Measures and ASP 5 on the Agreement on Technical Barriers to Trade.” Given the past history of negotiations on the G-90 proposals, the proponents said “all members are encouraged to provide substantive proposals that will facilitate technical engagements in solutions-based mode.” POLICY SPACE The G-90 proposal reiterated the following key points and principles that inform its approach to fulfilling the mandate to make SDT provisions more precise, effective and operational: * SDT for developing and least developed countries is an integral part of the multilateral trading system architecture and a treaty embedded right. * The mandate under paragraph 44 of the Doha Declaration and reaffirmed at MC12 is to review SDT provisions under the covered Agreements with a view to strengthening them and making them more precise, effective and operational. * The G-90 is not seeking blanket exemptions from commitments, but rather, to operationalize the collective commitments of the WTO Membership in several WTO agreements to facilitate the effective integration of developing countries and LDCs into the multilateral trading system. * SDT is not confined to transitional periods and capacity building and technical assistance, but should be intrinsically embedded in the trade rules to allow policy flexibility to developing countries and LDCs to achieve their development objectives, and under conditions of certainty. The proponents emphasized that “G90 proposals do not aim to seek blanket, permanent, unconditional carve outs.” “On the contrary,” the proponents stressed that “they aim to seek the effective implementation of existing S&D provisions, including through the provision of assured technical assistance and capacity building, policy space, commercially meaningful export opportunities, and implementation timelines.” Further, the proponents sought “stability, predictability and transparency in the implementation of existing S&D provisions, and thus strengthen the key hallmarks of the multilateral trading system.” The proponents informed members that “in relation to the SPS and TBT, of all the NTMs (non-tariff measures) that are notified to the WTO, technical barriers to trade account for 57.6% and SPS accounts for 37.6%.” The G-90 said that it is “not putting into question the right of Members to implement legitimate measures but is calling for an opportunity to be provided where possible and where the regulations of the Member implementing the measures allow to make provision for phased implementation, longer time frames and capacity building for developing countries that are facing capacity constraints.” Lastly, the proponents argued that “the poly-crisis is revelationary in highlighting the structural weaknesses of developing countries and underscores the need to move with speed to strengthen SDT provisions in the WTO covered agreements.” Despite their positive assertions, it remains to be seen how the US and other developed countries like the United Kingdom will respond to the G-90 proposal. +
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