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TWN
Info Service on WTO and Trade Issues (May25/22) Yerevan, 19 May (D. Ravi Kanth) — The World Trade Organization’s General Council (GC) meeting, to be held on 20-21 May, is set to discuss several rather thorny issues including proposals that seek to “name and shame” the United States over its imposition of unilateral tariffs against members in alleged violation of the WTO’s core principles. In addition, the WTO members, who appear to be facing a “doom and gloom” situation, are expected to discuss the controversial budget issues, including a rather “vague” transformation and development strategy developed by the WTO Secretariat along corporate lines in a member-driven organization, which allegedly entails a “colossal waste of precious funds”, said a trade envoy, who asked not to be quoted. Also, the agenda of the GC meeting includes an item for a decision to be taken on incorporating the Investment Facilitation for Development Agreement (IFDA) into the list of plurilateral agreements under Annex 4 of the WTO Agreement despite this issue being repeatedly opposed by India, South Africa, and Turkiye in previous GC meetings, said people familiar with the development. PROPOSALS AT GC MEET The GC agenda includes three separate proposals targeting the Trump administration for seemingly wrecking the global trading system, which is anchored on the rules-based WTO. The alleged use of different types of unilateral tariffs by Washington has almost put paid to the continuation of the WTO, said people familiar with the GC agenda. The so-called “Friends of the System” Group, led by Singapore and Switzerland, together with several other members are seeking to drive home a strong message about the importance of the “Rules-Based Multilateral Trading System on the Occasion of the 30th Anniversary of the World Trade Organization.” In their statement (WT/GC/271/Rev.2), they reaffirmed how the WTO with its 166 members has proved to be an engine for pursuing “shared prosperity”. “It has contributed to the economic development of both developed and developing Members, including Least Developed Countries (LDCs), by promoting trade liberalisation and facilitating economic integration, fostering stability, predictability, and consumers’ trust while preserving incentives for innovation.” The WTO’s support for developing economies, including LDCs, has lifted millions of people out of poverty, the proponents argued. “We, therefore, reaffirm the central and indispensable role of the WTO at the core of the rules-based multilateral trading system, which provides a predictable, transparent, non-discriminatory and open global trading system,” despite “mounting challenges, including disruptions in global supply chains, rising protectionism and climate change.” Recommitting “to abide by the WTO’s binding rules, which have provided certainty and predictability for businesses, built trust and confidence among consumers, and underpinned the growth of international trade and development,” the Group argued that “strong rules facilitate the effective settlement of trade disputes and serve as a bulwark against protectionism and unfair practices.” At a time when the Trump administration appears to have brushed aside the WTO rules in pursuit of its “America First” trade policies, the proponents are seemingly seeking “plurilateral initiatives at the WTO, which have been vital in driving concrete progress in key areas of trade.” Interestingly, the proponents seem to be seeking to adopt decisions by doing away with the principle of consensus-based decision-making, “in an outcome-oriented way and to undertake bold, collective action that reflects the changing dynamics of the global economy and responds to the challenges ahead.” “This would ensure that the WTO remains the bedrock of a free, fair, inclusive, sustainable, and rules-based multilateral trading system for generations to come,” the proponents maintained. In another proposal (WT/GC/272), China wants members to issue a strong statement against the “heightened trade turbulence” allegedly caused by the US, which has seemingly brought uncertainty and unpredictability to the global trading system through its imposition of unilateral tariffs. China has severely criticized the US for imposing its unilateral tariffs, including its announcement of “reciprocal tariffs” against countries, at the 30th anniversary meeting of the WTO’s Committee on Market Access last week. China has sought to oppose the Trump administration’s imposition of “reciprocal tariffs” at every WTO committee meeting during the past two months, said people familiar with the development. Meanwhile, the European Union has inserted an item for discussion on the GC agenda on “Fragmentation of Global Trade Through Tariffs and the Global Costs”. The EU along with several other countries have spoken against the fragmentation of the global trading system due to the alleged unilateral tariffs imposed by the US and how they are pushing global costs upwards. However, the US seems to be unruffled by the mounting criticism against its trade policies that have seemingly caused disruptions in global supply chains. After hearing the criticisms at the Committee on Market Access last week, the US merely justified the tariffs on grounds of national security. WTO BUDGET & SECRETARIAT RESTRUCTURING The GC meeting is also expected to discuss several controversial issues concerning the management of WTO funds for different activities, including the issue of the restructuring of the Secretariat, said people familiar with the development. In one of her “signature” initiatives, the WTO’s Director-General, Ms Ngozi Okonjo-Iweala, contracted the global management consulting firm McKinsey & Company on restructuring the WTO Secretariat at a reported cost of CHF 1 million, but the report issued by the consulting firm was never made public, said a staffer who asked not to be quoted. However, the recommendations of McKinsey & Company are being implemented partially, even though they have made little or no impact, the staffer said. Last week, the WTO’s Deputy Director-General, Ms Angela Ellard of the United States, provided an update on “strengthening work planning and the use of metrics at the Secretariat.” In a two-page restricted report (Job/BFA/117) issued on 13 May, seen by the SUNS, Ms Ellard said that “the Strategy, Planning and Transformation Division (SPTD) has assumed responsibility for the coordination of the annual Divisional workplans and associated KPIs (key performance indicators).” The report vaguely suggested that “to date, workplans have been prepared by all Divisions but one, which is a complex one and still in progress,” adding that “this record represents a significant improvement over last year, when the External Auditor noted that several workplans remained outstanding in September.” According to the report, “2025 is a transition year, meaning that the SPTD will work with Divisions and Senior Management to develop a new basic template for the annual workplans, as well as Secretariat-wide and cross- divisional KPIs, in addition to the division-specific variables.” The report appears to “make little sense” and the question is how can corporate-oriented key performance indicators work in a member-driven organization, said one member, who asked not to be quoted. The discussion on the WTO budget could also highlight the outstanding contributions from members and observers, particularly the United States, said people familiar with the development. The US is understood to have said at the last meeting of the WTO Committee on Budget, Finance and Administration on 4 March that it is undergoing a comprehensive review of all contributions to international organizations, and that contributions for 2024 and 2025 are part of that review. The US also said that the financing burden of the WTO’s operating budget should be more equitably and appropriately distributed across the membership to reduce vulnerability. IFDA Meanwhile, a large group of members has inserted a draft decision (WT/GC/W/927/Rev.2) on the GC agenda on incorporating the controversial Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement. However, it remains to be seen whether India, South Africa, and Turkiye will join the consensus at the GC meeting. The members supporting the IFDA include: Afghanistan; Albania; Angola; Antigua and Barbuda; Argentina; Armenia; Australia; Bahrain, Kingdom of; Barbados; Belize; Benin; Bolivia, Plurinational State of; Brazil; Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Canada; Central African Republic; Chad; Chile; China; Congo; Costa Rica; Cote d’Ivoire; Democratic Republic of the Congo; Djibouti; Dominica; Dominican Republic; Ecuador; El Salvador; European Union; Gabon; Gambia; Georgia; Grenada; Guatemala; Guinea; Guinea Bissau; Honduras; Hong Kong, China; Iceland; Indonesia; Japan; Kazakhstan; Korea, Republic of; Kuwait, the State of; Kyrgyz Republic; Lao People’s Democratic Republic; Liberia; Macao, China; Malawi; Malaysia; Maldives; Mali; Mauritania; Mauritius; Mexico; Moldova, Republic of; Mongolia; Montenegro; Morocco; Mozambique; Myanmar; New Zealand; Nicaragua; Niger; Nigeria; North Macedonia; Norway; Oman; Pakistan; Panama; Papua New Guinea; Paraguay; Peru; Philippines; Qatar; Russian Federation; Saudi Arabia, Kingdom of; Seychelles; Sierra Leone; Singapore; Solomon Islands; Suriname; Switzerland; Tajikistan; Thailand; Togo; Uganda; United Arab Emirates; United Kingdom; Uruguay; Vanuatu; Venezuela, Bolivarian Republic of; Yemen; Zambia; and Zimbabwe. The proponents want the General Council to adopt the draft decision, pursuant to paragraph 9 of Article X of the Marrakesh Agreement Establishing the World Trade Organization. “In this regard, we are committed to further discussions and consultations with all Members,” they said. However, India and South Africa have repeatedly opposed the IFDA on systemic and procedural grounds, as it allegedly violates the core principles enshrined in the Marrakesh Agreement, said people familiar with the development. +
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