TWN Info Service on WTO and Trade Issues (Jul23/13)
25 July 2023
Third World Network

Trade: African Group issues key principles on institutional reform of WTO
Published in SUNS #9828 dated 25 July 2023

Geneva, 24 Jul (D. Ravi Kanth) — The African Group has expressed its sharpest concerns over the attempts to legitimize so-called “reform by doing” by saying that it “should not mask or be a euphemism for institutional changes that would otherwise have wide-reaching implications or alter the balance of rights and obligations of Members” at the World Trade Organization, as the WTO General Council chair holds a discussion on this issue on 24 July, said people familiar with the development.

In a seemingly “path-breaking” proposal (WT/GC/W/895), titled, “A Development Perspective on Institutional Reforms of the World Trade Organization” and circulated on 13 July, the African Group pointed somewhat bluntly to several controversial happenings, particularly in regard to “reform by doing” and numerous other issues concerning the manner in which private sector/stakeholders are apparently being inducted into the informal as well as formal negotiating processes at the WTO over the past several months.

Without naming the WTO Director-General and a group of industrialized countries with the alleged assistance of the current General Council (GC) chair, Ambassador Athaliah Lesiba Molokomme of Botswana, who are apparently pushing so-called “reform by doing”, the African Group said that “a clear typography of the different strands of institutional reforms will be necessary, including and tied thereto the level of authority that is accorded to respective committees to formally adopt these reforms.”

“Although there may be some proposals that would ultimately imply or lead to changes in the balance of rights and/or obligations of members, the majority of proposals in the main have, among others, focussed on possible improvements in the conduct of meetings, introducing uniform practices or exporting/extending so-called “best practices” across committees, “enhancing” transparency, and the adoption or mainstreaming of information technology tools to exploit their prowess in the management and dissemination of information and data,” the African Group said.

It added: “Whilst the use of informal modes of meetings, or other such processes outside formal WTO bodies have been adopted to consider incremental reforms or so-called “reform by doing” of regular bodies of the WTO, the African Group believes it is necessary and important that the rights of all members to a meaningful opportunity to have their views considered and in decision-making in formal and properly constituted bodies with no predetermined or a priori outcomes be respected and upheld.”

More importantly, it said “the peculiarities of WTO Agreements and Committees, including the Trade Policy Review Mechanism (TPRM) and the functioning of the Trade Policy Review Body (TPRB), should inform what is fit-for-purpose and what sorts of incremental reforms (i.e. “reform by doing”) or substantive reforms are necessary within each WTO committee. This includes, but is not limited to, any suggestions for the updating of rules of procedure governing the operations of committees, or the conduct of their meetings. There should be no one-size-fits-all default approach.”

It expressed the sharpest concern that “more than often, issues of development and of particular interest to developing countries, including LDCs are relegated to an afterthought in the work of WTO bodies, and where these arise, they tend to focus on the narrowest scope of special and differential treatment confined to technical assistance and capacity building.”

GC CHAIR’S NOTE ON “REFORM BY DOING”

Earlier on 2 June, the GC chair had issued a restricted 23-page document titled “WTO Reform – State of Play in WTO Councils, Committees, and Negotiating Bodies – “Reform by Doing”.”

The document, seen by the SUNS, contains many tables in a matrix format “to facilitate Members’ discussions during the Informal Meeting on WTO Reform Focused on the Deliberative Function and Institutional Matters.”

Though the GC chair said that “the document is without prejudice to any Member’s position, nor to any approach or approaches that individual Councils, Committees or Negotiating Bodies may choose to implement,” it is a well known fact that the proposal on “WTO Reform Focused on the Deliberative Function and Institutional Matters” is primarily a European Union initiative.

Unsurprisingly, the EU’s trade envoy to the WTO, Ambassador Joao Aguiar Machado, said at a formal Trade Negotiations Committee (TNC) meeting on 20 July that: “We place strong importance on an outcome on reinforced deliberation on trade and industrial policy, trade and environment and trade and inclusiveness.”

AFRICAN GROUP’S PERSPECTIVE ON WTO REFORM

It is against this backdrop that the African Group, in its proposal, expressed apparent anguish that “the inventory list of the development agenda as captured in the DDA (Doha Development Agenda) remains unfulfilled”.

The WTO reform was mandated by trade ministers at the WTO’s 12th ministerial conference (MC12) in Geneva last June.

Paragraph three of the Outcome Document (WT/MIN(22)/24) issued at MC12 states: “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 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.”

In response to this mandate, the African Group said, “the principles entailed in the Marrakesh Agreement (which is the foundational agreement for the existence of the WTO) should continue to underpin the work of the WTO.”

It added, “the foregoing principles must not only permeate the work towards reforms of the WTO, but must also be inherent in the outcomes of such processes.”

It said that institutional reforms have consumed the activities of various WTO bodies and committees since MC12.

The African Group argued that “the parlance of “reform-by doing” has gained currency as synonymous to elementary “incremental reforms” in the name of improving the efficiency of various WTO committees, standardising practices across committees or improving synergies and coordination between them.”

Currently, it said, the WTO is “at a pivotal juncture demanding immediate attention” and the member-driven, inter-governmental organization “faced enormous challenges across all three pillars of its mandate.”

These pillars “encompass providing a robust negotiation forum to facilitate trade liberalization and the establishment of new rules, diligently monitoring trade policies to ensure transparency and fairness, and effectively resolving disputes among its 164 members.”

PRINCIPLES UNDERGIRDING INSTITUTIONAL REFORMS

In its proposal, the African Group called for and reaffirmed that the following principles be upheld in the course of institutional reforms of WTO bodies:

* Reforms must be premised on the principles of inclusivity, transparency and development. Inclusivity would require, at a minimum, preserving consensus decision-making in the WTO.

* Any reforms that change the rights and obligations of Members should be discussed in the General Council.

* The discussions on reform of WTO bodies must take into account the capacity constraints of developing countries. In terms of process, this means overlaps of key meetings should be avoided at all times as this is central to inclusivity.

* Reforms must not translate to outcomes that increase the burden on already overstretched and limited capacities of developing countries, including LDCs. On the contrary, efforts should be channelled towards alleviating the current burden and complexities.

* The institutional reforms should preserve the Member-driven nature of the WTO.

* Reforms must take into account the specific mandates of WTO bodies.

* Reforms at the institutional level require consensus and cooperation among members. Regular consultations, negotiations, and discussions should be conducted to build consensus on proposed reforms and ensure their successful implementation.

* Reforms shall safeguard and strengthen the Special and Differential Treatment (S&DT) provisions which recognise the development needs and challenges faced by developing countries.

REFORM OF REGULAR BODIES

The African Group believes that “the reform of WTO regular bodies must at the core enhance effective and meaningful participation of small and resource-constrained delegations in all deliberations and decisions, particularly developing countries, including LDCs.”

“The efforts to address issues of overlapping meetings, improvement of meeting agendas and post-meeting reporting, and other initiatives to empower delegates to be effectively and productively engaged in activities of WTO bodies are, therefore, in principle welcomed.”

On institutional reforms, the views of the African Group as relates the functioning of the WTO bodies, are summarized as follows:

* Early circulation of documents for formal meetings (e.g. at least [X] days prior) to allow delegations to prepare and consult capitals.

* Circulation of a summary of key outcomes and action items immediately after meetings for the benefit of delegates who are unable to attend, and to ensure delegations fulfil any requirements flowing from action items agreed at meetings. We support the suggestions that these summary reports should be chairs’ reports on their responsibility, pending circulation of formal minutes.

* On a case-by-case basis, and to the extent practicable, there should be a streamlining and standardisation of reporting formats, agendas and documentation across WTO bodies. This will enhance transparency and facilitate easier access to information for delegates and stakeholders.

* Timely circulation of the agenda and minutes of meetings, and hence clear time-lines must be defined (e.g. at least [X] days after meeting; or at least [X] days prior to next meeting). The idea to introduce automatic reminders is also welcomed.

* Annotated agendas for all WTO bodies will assist in facilitating focused discussions. This should be a neutral document that reflects issues to be discussed, and were applicable, expected outcomes.

* Ensure that each WTO body has a clear and well-defined mandate, outlining its specific responsibilities, objectives, and scope of work. This clarity helps guide discussions and ensures that the body’s work aligns with Members’ priorities.

* Where there have been mandates or outcomes agreed by Ministerial Conferences, these should be incorporated as standing items in the agendas of relevant committees to ensure proper monitoring and oversight of progress.

* Streamline decision-making processes within WTO bodies to avoid unnecessary delays. Encourage efficient discussions and seek consensus, while respecting the principles of inclusivity and transparency.

* Enhanced coordination and communication between different WTO bodies, including exchange of experiences to ensure cohesive reforms across bodies. The most efficient formats of interaction between bodies would need to be devised and agreed.

* Circulation at the end of each year, of an indicative yearly schedule of meetings for each of the WTO bodies for the following year.

* Embrace of digital tools and technology across WTO bodies would greatly improve efficiency and effectiveness of committee work and efforts of delegates. Harmonisation and streamlining of such systems across WTO bodies must, to the extent practicable, be explored, e.g. the Integrated Information Management System (IIMS). Transitioning to digital tools should be gradual and not too abrupt, in order to preserve maximum inclusivity and ensure no members are left behind, particularly constrained developing countries.

* Use of e-tools, including e-Agenda beyond just STCs agenda item, and to also permit electronic submission of statements by Members with prepared statements, including notifications and automatic e-reminders.

* Virtual participation in meetings of all WTO bodies. This will improve inclusivity, and enhance equitable participation of capital-based officials, especially those of developing countries, including LDCs that have resource constraints.

* Making available access to recorded sessions of meetings on a controlled basis.

* Continuous structured training at regular intervals for capital and Geneva-based delegates on the operations of committees, including the use of e-tools.

WORKING GROUP PROPOSED TO REPORT TO GC

Further, “to ensure the necessary horizontal progress and oversight of institutional reforms,” the African Group has proposed “the establishment of a working group that would report to the General Council focusing on matters of institutional reforms within the WTO.”

It said, “the working group would accordingly bring together representatives from different WTO bodies and its key tasks shall be to, among others, conduct a comprehensive review of the functioning and effectiveness of various WTO bodies, identify best practices across WTO bodies, identifying areas of improvement, streamlining procedures, enhancing inclusivity, and recommending appropriate institutional reforms.”

At a more substantive level, the African Group’s views are highlighted as follows:

* Development must be at the centre of WTO [institutional] reforms. Agenda-setting within the different WTO bodies should, therefore, be responsive to and address issues of interest to developing countries, including prioritizing and delivering on longstanding mandates, including reversing the setbacks on progress towards attainment of the United Nations Sustainable Development Goals (UN SDGs).

* WTO bodies must respect and operate within their mandated issues and boundaries, and any changes to such mandates can only be effected through consensus-based decisions and through an inclusive, member-driven process.

* Existing procedures for the reporting and addressing of specific trade concerns (STCs) as currently provided for in applicable agreements must be retained without their duplication or extension across all WTO bodies. New approaches that suggest more onerous obligations or burdens on limited human and institutional capacities of developing countries, including LDCs must be avoided.

* Regarding the TPRB and the TPRM process, the African Group proposes that it be rationalized and its scope be limited to core trade policies of a Member under review, and not macro-economic or other aspects unrelated to the work of the WTO and its agreements. The trade policy reviews should take into account the challenges and capacity constraints of developing countries. Members should also consider the possibility of limits to the number of questions posed to ensure that the process is qualitatively meaningful and serves its primary purpose rather than a scrutiny of all policies of members, especially those outside of the WTO mandate.

According to the African Group, “the basic principles and procedures of this Member-driven organization need to be respected and upheld to the letter both during Ministerial Conferences (MCs) and the negotiations or processes preceding them.”

It said that all meetings in the ministerial conferences (which seem to be somewhat opaque), “should be open to all Members without restricting the decision-making process to smaller Green Rooms.”

Last year, immediately after MC12, several African countries voiced their sharpest concerns that they were excluded from the Green Rooms. Though the WTO Director-General, Ms Ngozi Okonjo-Iweala, tried hard to convince the African countries that all meetings were open and that every member could attend, there were apparently few takers for her statement, said an African trade envoy, who asked not to be quoted.

Therefore, in the build-up to the WTO’s 13th ministerial conference (MC13), to be held in Abu Dhabi February next year, the African Group wants the following elements to guide the preparatory process, including:

* All consultations should be transparent and open-ended.

* The preparatory process should be conducted under the close supervision of the General Council and chaired by the Chairperson of the General Council.

* Any negotiating procedure to be adopted should be approved by consensus of Members at formal meetings.

* There should be sufficient time to consider documents and for consultations with capitals, including consultations within groups.

* The chairs of negotiating groups or sessions must at all times be impartial, objective, transparent, and inclusive in the conduct of negotiations and consultations with Members.

* Consultations should be transparent and represent all configurations, include the main protagonists, including coordinators/representatives of regional groupings.

* The Secretariat should remain impartial in their conduct during the consideration of possible Ministerial declarations, decisions, or outcome documents.

* Ministerial declarations, decisions, or outcome documents must be the outcome of consensus. Where there are divergences, these should be clearly reflected in the texts.

According to the African Group, the following elements must guide the conduct of activities during MCs:

* The scheduling of negotiating meetings should avoid parallel sessions and take into account the capacity and resource constraints of smaller delegations.

* Consultations should be open, transparent and inclusive.

* There must be sufficient time allocated for Members to consider any new draft texts, and for transparency, any Members proposing texts must be identifiable.

* There should be open, effective, efficient, timely and consistent communication channels throughout the duration of MCs to notify Members of key changes to meeting schedules or substantive information pertinent to unfolding negotiations. In addition to traditional means, the use of digital tools (e.g. online portals) must in this regard, be considered.

* There should be regular HODs (heads of delegation) or Committee of the Whole (COW) meetings to receive periodic updates and substantive reports from chairs/facilitators.

Further, to ensure the efficiency of the TNC (Trade Negotiations Committee), the African Group said, “It is important that its primary focus is on the issues within its mandate to enable structured discussions which is fundamentally about providing oversight on multilaterally mandated negotiations taking place within delegated negotiating bodies/special sessions.”

It criticized “the joint convening of TNC and HoDs in one seating”, as was done on 20 July, as it “distracts attention away from the core function of the TNC and leads to minimal oversight and monitoring of progress on matters within the mandate of the TNC.”

Contrary to the current practice of holding informal HoD meetings prior to the TNC meeting, the African Group said,”the HoDs can be held immediately after the TNC to address issues the DG and other Members may want to raise if having the two meetings on the same day is deemed feasible by Members.”

As the global economy “continues to grapple with the COVID-19 pandemic, food insecurity and slow economic growth,” the African Group said that various factors “continue to hamper global economic recovery, including ongoing geopolitical instability and other shocks such as rocketing inflation, the food and energy crises, supply- chain disruptions, increasing debt distress, escalating scale of destruction due to climate change, increasing market concentration, increasing rent extraction resulting in “winner takes most markets” characterized by super-profits, and balance of payment challenges. Some of these global challenges and developments are reflective of the lack of delivery on longstanding development mandates which should necessarily be prioritized in the interests of developing countries”.

WTO FOUND WANTING DURING COVID-19

“As was evidenced and experienced with Covid-19, the WTO has also been found wanting and unresponsive to challenges as they arise and has not evinced the required foresight to develop agile policy tools available to Members, especially developing countries, including LDCs when confronted with a variety of crises. Development being a cross-cutting issue, it is important that each WTO body be held accountable for the development agenda within its purview, with the role of the CTD [Committee on Trade and Development] as focal point on development enhanced to ensure coherence and coordination, and the General Council playing an active oversight and monitoring role,” the African Group said.

The African Group said “the role of WTO rules in facilitating the structural transformation, diversification and industrialisation of developing economies, including LDCs and ultimately economic development requires deliberate and continuous examination”, including the “so-called novel issues.”

The African Group said that it is important that WTO bodies, within their mandates, apply themselves to interrogating the efficacy of their respective agreements to development aspirations as contained in the preamble to the Marrakesh Agreement, and urgently translating in practice the recognition of “… the need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development”.”

While welcoming the convening of retreats by the WTO DG and the GC chair, the African Group said that they should facilitate “a discussion on the trade and industrial policy nexus.”

Also, such retreats “should be followed up with targeted engagements aimed at making concrete proposals for MC13.”

Emphasizing that “the WTO is a Member-driven organization,” the African Group argued that “the role and presence of other stakeholders, intergovernmental or International Organizations in the WTO must be limited to preserve the Member-driven nature of work and with due respect to their competences, mandates and limitations.”

It also emphasized that “legally, the WTO is a forum of engagement and contracting among and between sovereign states/governments, monitoring the implementation of those contracts/agreements, and resolving disputes as they arise in the implementation of these rules.”

The African Group warned against “the direct access and participation of external stakeholder in negotiations at a multilateral level,” saying that they are “misplaced, as sovereigns have varying frameworks of interaction with stakeholders in their national policy formulation processes.”

It said that “the current models of participation of intergovernmental or International Organizations are sufficient (e.g. observer status), save for improvements that can be considered as opposed wholesale changes.”

“The same applies with regards the participation of the private sector and other stakeholders which is undertaken through avenues like the WTO Public Forum, informal meetings or thematic sessions organised by the WTO and its bodies,” the African Group said, adding that the “participation of non-governmental entities must not undermine the Member-driven character of the WTO, including in decision-making, and must be free of undue sectoral influence.”

Last but not least, it said that “the participation of external stakeholders in such forums must, importantly, allow for a plurality and multiplicity of voices and perspectives to ensure balanced and fair engagements.”

“It is equally important that the experiences and views of developing countries, including LDCs are genuinely accorded equitable space, and for conscious efforts towards these ends, such as virtual participation, to be regularized,” the African Group said.

“The proliferation of informal modes of engagements such as thematic sessions, informal working groups or informal meetings must, nevertheless be moderated to preserve maximum inclusivity,” the African Group said, cautioning about “informal processes”, as they “often put an extra burden on developing countries with limited capacities.”

“The capacities of resource-constrained delegations should, therefore, be taken into account to ensure they are not placed at a disadvantage when decisions on the functioning of committees or implementation matters are considered and adopted, including negotiation processes,” the African Group said, insisting that “the scheduling of such informal meetings or processes, meeting requirements as well as technical assistance and capacity building programs must be tailored to respond to these capacity constraints and ensure effective and meaningful engagement of developing countries in WTO committees’ activities.”

In conclusion, the African Group said that the “Chairpersons have an obligation to maintain impartiality in accordance with the rules of procedures governing the respective WTO bodies they preside over in line with the Member-driven nature of the WTO. This is also applicable to the WTO Secretariat who are required in terms of Article VI of the Marrakesh Agreement and read together with the Staff Regulations and Rules under the Standards of Conduct to maintain their international character and remain neutral. Their roles cannot be increased from their current mandates and functions.” +