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TWN
Info Service on WTO and Trade Issues (May23/08) Geneva, 18 May (D. Ravi Kanth) — The World Trade Organization’s Director-General Ms Ngozi Okonjo-Iweala appears to have given a “short shrift” to the unresolved mandated issues of enormous importance to developing countries, especially in the Doha work program, for the WTO’s upcoming 13th ministerial conference (MC13), said people familiar with the DG’s pronouncements. MC13 is scheduled to be held in Abu Dhabi in February next year. The global trading system is already in a downward loop with several developed countries seeming to erect new barriers through the provision of hundreds of billions of dollars in subsidies under “me-first” unilateral trade policies. That such policies would further fracture the multilateral trading system is well known, said several trade envoys and analysts/commentators in various media reports. To apparently appease the industrialized countries, attempts are allegedly underway to deliver results of their choices at MC13 while seemingly turning a deaf ear to the issues raised by the developing countries, said a trade envoy, who asked not to be quoted. It is small wonder that the DG, in her statement made at an informal Heads of Delegation (HODs) meeting on 16 May, apparently remained somewhat silent on issues such as the permanent solution for public stockholding (PSH) programs for food security purposes, the special safeguard mechanism (SSM), and the G90’s ten Agreement-specific proposals on improvements in special and differential treatment (S&DT) provisions, said people, who asked not to be quoted. Instead, the DG seems to have embraced the agenda being advanced by the United States, the European Union, and members of the Cairns Group of farm-exporting countries by bringing to the center stage topics such as “food security in times of crises”, “environment, climate change and sustainability issues,” and “state intervention and policy space” among others, said people familiar with her statement issued on 16 May. The DG’s statement made during the informal HODs meeting on 16 May was later circulated as a restricted document (Job/TNC/109). At the meeting, she announced that the Senior Officials Meeting, which she initially wanted to convene in July, will now be held in October following push-back from members on her earlier proposal. LDC GRADUATION At the meeting, the DG said that “one central theme that I heard was the importance of finalizing the LDC Graduation issue.” According to Ms Okonjo-Iweala, “Many said that this is an issue that Permanent Representatives should be able to gavel at the General Council.” She added that several members “also suggested that, if by July, there is no agreement on this, Members should progress as much as possible so that senior officials take a decision on it when they meet.” FISHERIES SUBSIDIES With regard to the second wave of negotiations on fisheries subsidies, the DG said that some members “noted that the type of political guidance would depend on the progress Members would have achieved prior to the Senior Officials Meeting.” “If there is a text, some said that the guidance we will need is how to build convergence,” she said. “If there is no text, the focus could be on the principles Members should converge on to arrive at a text and begin text-based negotiations,” the DG added. “Many also stressed the importance of ratifying the Fisheries Subsidies Agreement to ensure its entry into force by MC13 and assured me that they were working on their domestic processes,” the DG said. It appears to be a Herculean task to get two-thirds of the membership to ratify the Agreement by MC13, given the halting progress of the ratification process. So far, seven members – Iceland, Seychelles, Switzerland, Singapore, the United States, Canada, and the United Arab Emirates – have completed the ratification process. WTO’S CREDIBILITY RESTS ON DS REFORM Significantly, the DG said the credibility of the WTO will much depend on whether it can deliver on the dispute settlement (DS) reform at MC13. “I pointed out that we would not look credible if by MC13 we had nothing here” in dispute settlement reform. She said: “Let me stress that, I am not saying that we can or even should deliver everything by MC13, but we should at the very least know where we are going on this, and we should have progressed some way on dispute settlement reform, including by converging on broad principles that can guide this work.” “We could ask senior officials to agree on these principles” for DS reform, she added. However, she did not mention which way the DS reform should proceed. Ms Okonjo-Iweala also remained somewhat silent on whether the ongoing DS reform discussions must ensure that the two-tier Dispute Settlement System shall remain intact, said people who are involved in the discussions. The ongoing discussions on DS reform appear to suggest that these discussions are between the US on the one side, and the rest of the membership, on the other, said a negotiator, who asked not to be identified. During the discussions on DS reform on 16 May, the negotiator said that there is still no clarity on where it is heading, as the US proposals seem to create a new divide in “atrophying” the Dispute Settlement Body, while many members want to ensure that the two-tier system with the Appellate Body in some form remains intact. DEVELOPING COUNTRY CONCERNS The DG said: “A number of other issues I heard included agriculture, in particular, food security in times of crises.” She also mentioned SPS (sanitary and phytosanitary measures), which is of concern to the farm producers from the Cairns Group. On food security, it is an open secret that the issue advanced by the US, Brazil, the EU, and several other Cairns Group members is an attempt to create a new narrative, said a developing country trade envoy. That narrative appears to camouflage the real bread-and-butter issues raised by hundreds of millions of poor and livelihood farmers in developing countries. The permanent solution for public stockholding programs for food security and the special safeguard mechanism, two outstanding mandated issues, are being “stealthily” pushed under the carpet, the envoy suggested. Perhaps, the DG’s push on food security, while remaining silent on PSH and SSM, is a clear pointer in that direction, the envoy said. DEVELOPMENT ISSUES Commenting on “Development”, the DG said, “What I heard on development apart from the G90 Agreement Specific Proposals. It was evident from Members that development is an area that we need to deliver by MC13.” Though the DG mentioned the drastically reduced set of G90 Agreement-specific proposals to improve the special and differential treatment provisions, it is more about the narrative of “development” being pushed by the major developed countries and international financial institutions like the World Bank, said a trade analyst. That narrative on development tends to sidestep the issues raised by the developing countries and creates some “delusionary” outcomes, the analyst said. The DG is aware that the US, the EU, and other developed countries have repeatedly pushed back against the G90’s ten Agreement-specific proposals for the past several years, said a trade envoy, who asked not to be quoted. So, what is going to be delivered on “development” remains a mystery, as the US and other industrialized countries are likely not going to agree on substantive outcomes as sought by the developing countries at MC13, the envoy said. OTHER ISSUES – LOST CREDIBILITY The DG also mentioned other issues such as “the e-commerce work program and moratorium; pandemic preparedness; TRIPS waiver extension.” Here again, from the developments since MC12, the WTO seems to have lost its credibility when it failed to extend the MC12 Ministerial Decision on the TRIPS Agreement to cover COVID-19 diagnostics and therapeutics. Paragraph eight of the MC12 Ministerial Decision on the TRIPS Agreement states that “no later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics.” It is now almost a year but there appears to be no signs of paragraph eight being implemented because of opposition from a group of major industrialized countries. Given the current situation of how the extension of the MC12 Ministerial Decision on the TRIPS Agreement is allegedly being held hostage by one powerful member, it is highly unlikely that there will be any outcome on this issue at MC13, said trade envoys, who are involved in the discussions. E-COMMERCE MORATORIUM The DG mentioned the 1998 work program on electronic commerce, and the moratorium on customs duties on electronic transmissions, which barring its extension, has to be terminated by March 2024 as per the MC12 decision. Privately, and sometimes publicly, the DG appears to have revealed her mind in support of the continuation of the moratorium on grounds that various business lobbies have pressed for a permanent moratorium. It remains to be seen what the DG, who is expected to participate in the G-7 summit in Hiroshima, Japan at the weekend, will say on the moratorium. At the last G7 leaders’ meeting in Germany, the DG silently watched as demands were made for a permanent moratorium. WTO REFORMS & NEW ISSUES The DG seems to have brought new issues such as environment, climate change and sustainability issues; state intervention and policy space; level playing field issues; inclusiveness; and WTO accessions, as possible deliverables for MC13. On the crucial issue of WTO reforms where the battle lines are drawn between the Northern countries on the one side, and the South, on the other, the DG said: “It was suggested that senior officials should be updated on the work on procedural reforms and agree on them as appropriate. In fact, delegations said that a set of procedural reforms could be agreed by Ambassadors for implementation. On substantive reforms, some underscored the need to distill ideas brought to the table and put them to the Senior Officials Meeting. Those that have garnered widespread support should be identified and senior officials’ action sought.” The DG’s pronouncements on WTO reforms appear somewhat vague, as there is no clear indication of what would be the “substantive reforms” according to her perspective, said trade envoys, who asked not to be quoted. All in all, the DG’s statement ahead of the Senior Officials Meeting appears to be somewhat tilted in favour of the agenda being pushed by the Northern countries, while the developing countries’ demands, for the umpteenth time, seem to be given a “short shrift”, said several members, who asked not to be quoted. +
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