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Info Service on WTO and Trade Issues (Oct24/13) Geneva, 16 Oct (D. Ravi Kanth) — The World Trade Organization’s Director-General, Ms Ngozi Okonjo-Iweala, appears to have harangued members at a General Council meeting on 15 October, after several countries, including India, South Africa, and Namibia, refused to join the consensus on the proposed decision to incorporate the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement, said people familiar with the development. The proponents of the IFDA, which is being promoted by China along with more than 125 other countries, sought a decision based on consensus at the General Council (GC) meeting on 15 October, said people familiar with the development. Though the proposed plurilateral IFDA was never agreed on both procedural and systemic grounds by the General Council or at any WTO ministerial conference since the 11th ministerial conference (MC11) in Buenos Aires, Argentina in December 2017, the proponents, coordinated by Chile and South Korea, have repeatedly raised the issue, said people familiar with the development. The United States trade envoy, Ambassador Maria Pagan, said Washington “has no intention of joining the IFDA”, emphasizing that it has “no objection to incorporation [in] Annex 4 (which includes plurilateral agreements)”, said people familiar with the development. Ambassador Pagan narrated the story in the Hollywood movie “Groundhog Day” in which “the character went through the loop 12,400 times but he did break the loop.” The lead character in Groundhog Day, she said, “kept getting stuck in the loop because he was a bad person doing bad things to people. He broke the loop by learning how to [play] the piano, doing ice sculpting, saving people, etc. but generally he broke the loop by being a good person and by doing good deeds. Yes, we do Groundhog Day very well here but maybe there’s a way to breaking the loop at some point.” Interestingly, while the US has acted as a “bad person” since the Doha round was launched at the WTO in 2001 by blocking decisions repeatedly, it has now paralyzed the Appellate Body since 2019, said people familiar with the discussions. The US seems to be acting rather audaciously by insisting that members make a payment for a weakened Appellate Body, said several people, who asked not to be quoted. DG’S “OUTBURSTS” While the statement put out by the WTO on its website highlights the DG’s call on members “to continue to be constructive and to keep in our sights that we are here to achieve outcomes,” her alleged outbursts at the meeting asking members why they are not delivering despite being paid salaries seemed somewhat “ill-tempered and hyperbolic”, and these comments was not mentioned in the official statement, said several people familiar with the discussions. On agriculture, the DG said, “We can’t accept this important negotiation to be stalemated,” adding that “it’s been so for two and a half decades … let’s try and take it very seriously and find a way through.” She said that members are “almost there” to reach a deal on the second part of the Agreement on Fisheries Subsidies on addressing subsidies contributing to overcapacity and overfishing. “There are some issues, not many, and some members who need more work to be done so that we can push towards a conclusion,” she said. However, her intervention concerning the call to incorporate the Investment Facilitation for Development Agreement into Annex 4 of the WTO Agreement, which falls under the General Council and not the Trade Negotiations Committee (TNC), appears to be replete with “unprecedented harangues,” said several people who asked not to be quoted. After welcoming the Indian Vice Minister of Commerce, Ajay Bhadoo, and the new Ambassadors, the DG said she wants to make a brief statement on the IFDA, said people familiar with the proceedings. “First, I welcome the tone of the discussion even though those see this as something they don’t want to support,” the DG said, adding that “we have detected a willingness to find a way out” and “I think it may not be a bad idea to have a solutions-oriented dialogue to working expeditiously and urgently to try to get this IFD to conclusion.” The DG went on to congratulate Pakistan for joining the IFDA today, saying: “So I do want to thank all the three members (India, South Africa, and Namibia), who have issues, for their constructive tone and hope this solutions-oriented dialogue can take place.” Ms Okonjo-Iweala continued: “As I said at the TNC, I think we should all be looking for solutions now to all our issues rather than bringing problems to the floor.” Justifying the need for a dialogue, the DG said: “I think there are two reasons for this dialogue, so we can listen to each other and find a way out: there is a unique opportunity for developing countries that is appearing when you talk to the business community. There is the vulnerability of supply chains and the unique conjuncture in which many developing countries like Namibia [are] said [to] have the ability to have decentralised supply chains that can process their green hydrogen and critical minerals. It is an opportunity that should not be missed. Many countries in Central Asia, Africa and Latin America, this is your time. I am talking to the business community – many are willing to invest but they keep raising these issues on the investment climate over and over,” said people familiar with the discussions. Ms Okonjo-Iweala went on to recall her “good career at the World Bank where there was the Doing Business Report year after year where the Bank Group tried to get countries to do precisely the things that are in this investment facilitation agreement which is making it easier for investors to come in.” She argued, “I think this is a good opportunity for all to take a look at this. It is not an investment treaty – I think that should be made very clear. I think some think that it is, but please take a look at it. Some just don’t have the size to attract investment. This is a tool, not a magic tool, but it is one tool in the arsenal.” The DG said that “if this organization is going to have results, we can’t have everything blocked.” “As we sit here, multilateral negotiations are not moving, they are blocked,” Ms Okonjo-Iweala said. “Plurilaterals are not moving, they are blocked,” she said, pointing out that “those who value multilaterals, maybe if they can help us move the multilaterals, that will give everyone else hope.” “But we can’t have this blocked on one side, and blocked on the other side, which means the organization is blocked,” she said. Seemingly stepping up the criticism on issues being blocked at the WTO, the DG went on to say: “And I want to really ask the ambassadors and I am sorry for being very cheeky, but you know I have said this before – why are you sitting here, being paid,” said people familiar with the discussions. In a seemingly “ill-tempered” tone, the DG said that, “I mean I wouldn’t want to be here being paid by my government if my job is to not have anything work. We are blocked on fish. We are blocked on agriculture. We are blocked on IFD. We are blocked on everything. No wonder people feel this place doesn’t come forward with anything meaningful.” Again apologizing “for being cheeky”, she said “you are here being paid a salary, you are being paid a salary to produce results and if we block everything with every argument then we are not doing our work”. She told members that “we can’t have it both ways,” urging them “to reflect on this larger picture.” “We can’t also say we want to help developing countries to develop and then not look at the one instrument that so many of them are pleading for that will help them attract investment,” Ms Okonjo-Iweala said. “I have said these things before, and I will not shy away from saying them but please I want us to earn our salaries here,” she implored members. “It’s very easy to come to a meeting and just repeat the same thing. It is very risk-free if you always say what you’ve always said before and stay in your comfort zone,” she said, adding that “it doesn’t move the dial. It doesn’t deliver results for the poor people who are waiting for us in our countries to deliver something to them.” “So before you go and eat your nice lunch and those of you who are going to an Ambassador-invited dinner, just think about it.” She asked the members: “Why are you earning your salary here if you are blocking everything? We are not moving anything. Ok, I am repeating myself. Enough said but that is the way I feel but I feel we should find a way to deliver.” In his statement after the DG’s statement, the General Council chair, Ambassador Petter Olberg of Norway, said: “DG, I agree with you”, said people familiar with the discussions. Several participants appeared rather doubtful about the DG’s statements, which seemed to have gone well beyond her mandate as set out in paragraph 4 of Article VI of the Marrakesh Agreement, where the DG is not supposed to speak on behalf of any member or on agreements being proposed by members, said people familiar with her statement. Paragraph 4 of Article VI of the Marrakesh Agreement states unambiguously: “The responsibilities of the Director-General and of the staff of the Secretariat shall be exclusively international in character. In the discharge of their duties, the Director-General and the staff of the Secretariat shall not seek or accept instructions from any government or any other authority external to the WTO. They shall refrain from any action which might adversely reflect on their position as international officials. The Members of the WTO shall respect the international character of the responsibilities of the Director-General and of the staff of the Secretariat and shall not seek to influence them in the discharge of their duties.” The WTO is a member-driven organization where members make the rules, unlike the World Bank, said a trade envoy, who asked not to be quoted. “Ms Okonjo-Iweala has little or no understanding of trade negotiations, and thrusting agreements onto members in a member-driven organization is disconcerting,” the envoy said. +
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