|
||
|
TWN
Info Service on WTO and Trade Issues (Oct25/09) Geneva, 9 Oct (D. Ravi Kanth) — As trade ministers from select countries congregate in Port Elizabeth, South Africa, on 9 October, a report issued by the facilitator overseeing discussions on reforming the World Trade Organization has seemingly sidestepped the key issues. Instead, the report has focused on decision-making and on “differentiation” among developing countries for availing of special and differential treatment (S&DT), said people familiar with the development. Many countries highlighted the importance of restoring the two-tier dispute settlement system and addressing the unilateral tariffs imposed by the Trump administration. Yet, the facilitator’s agenda sets these two issues aside to focus on changing the decision-making processes and making S&DT provisions needs-based – a framework in which developing countries would be asked to make a “payment”, a term used in trade negotiating lexicon, said people familiar with the development. Due to alleged attempts by the facilitator, Ambassador Petter Olberg of Norway, and the WTO Director-General, Ms. Ngozi Okonjo-Iweala, who chairs the Doha Trade Negotiations Committee (TNC), to foist a “top-down” agenda on members, the prospects for achieving consensus in an organization with such a wide diversity of members appear rather bleak, said people familiar with the development. On 8 October, officials of the Trade and Investment Working Group of the G20 failed to reach consensus on reforms ahead of the G20 trade ministers’ meeting, which is scheduled for 10-11 October in Port Elizabeth, South Africa, said people familiar with the development. The officials are currently working towards a consensus on a Ministerial Statement on WTO reform, which is expected to be streamlined and focus solely on the core issues, according to people following the negotiations. FACILITATOR’S REPORT Meanwhile, in a restricted document (Job/GC/465) issued on 8 October and seen by the SUNS, the facilitator’s remarks from the General Council (GC) meeting on 6 October outlined the narrative being developed for the reforms. Ambassador Olberg said he posed two questions to members on 24 September “to reignite collective reflection on WTO reform and begin charting a pragmatic path forward.” The two questions are: * “Given that roughly 72% of global goods trade still operates under MFN terms, what is the WTO’s role today – and how can this core principle be preserved, strengthened, or reformed?” * “How can we advance the reform process pragmatically in the lead-up to the December General Council?” Significantly, the US and a few other countries challenged the figure of 72% on MFN trade at the GC meeting that concluded on 7 October, characterizing it as “myopic.” The DG, however, strongly objected to the US statement on the MFN data, said people familiar with the development. The facilitator said that while there was strong turnout at the plenary meeting on 24 September, “views remain divergent on the substance.” In response to the first question on MFN trade and the role of the WTO, the facilitator said that “many reaffirmed MFN as a foundational principle of the WTO – not just legally, but as a practical guarantee of predictability, non- discrimination, and equitable access,” adding that “for many small economies and MSMEs [micro, small, and medium enterprises], MFN is existential.” He said, “several [members] acknowledged growing pressure on MFN, while pointing to the fact that 72% of global goods trade still flows under MFN terms as evidence of its [WTO’s] continuing relevance.” Ambassador Olberg, however, acknowledged that “some [members] questioned this figure, citing the growing reach of bilateral and regional agreements as a potential erosion of actual MFN coverage.” Further, he pointed out that “there was broad recognition that RTAs and bilateral agreements have a legitimate place in the WTO architecture – but must remain exceptions, not substitutes.” “Their proliferation should be balanced with stronger transparency and oversight to maintain trust in the system,” he said. The facilitator said “others pointed to the track record of the CRTA [Committee on Regional Trade Agreements], especially in relation to the “substantially all trade” requirement, as evidence that perhaps MFN is not as valued in practice – though oversight mechanisms may need strengthening.” More importantly, the facilitator acknowledged that “a recurring theme was the urgent need to have a fully functioning dispute settlement system.” “Many [members] emphasized that MFN – and indeed all WTO rules – only have meaning if they are enforceable,” he said, adding that “for smaller Members especially, binding adjudication is essential to fully access their rights under the system.” In areas like the rules on SPS (sanitary and phytosanitary measures), technical barriers to trade, customs valuation, intellectual property, services, and trade facilitation, the WTO remains “a valuable backbone of global trade,” the facilitator noted. Without specifying how many countries “highlighted deeper structural challenges,” the facilitator observed that “the WTO was founded with an initial imbalance, based on the assumption that continued negotiations would modernize rules and improve fairness.” “That promise has not been fulfilled,” Ambassador Olberg argued. He said that “as global trade has evolved, the rulebook has remained largely static,” adding that “members warned that without enforceable and updated rules, the system risks greater fragmentation, uncertainty, and distortion – especially harmful to small and vulnerable economies.” Small and vulnerable economies have received limited to negligible support from the WTO since 1995, despite often being cited as the beneficiaries of reform, said people familiar with the development. The facilitator insisted that “reform must therefore go hand-in-hand with preserving the multilateral system.” He said that “some members argued that reform alone may not be sufficient,” adding that “what is needed is a re-foundation of the WTO – not to preserve a legacy institution, but to build one capable of meeting 21st-century trade realities with responsiveness, flexibility, and fairness.” According to the facilitator, “there was broad support for continuing to organize our discussions around the three-track framework: Governance; Fairness and Issues of Our Time.” This statement by the facilitator appears not to be based on facts, as many developing and least-developed countries have sought for discussions on reform to be based on their core developmental issues, said a trade envoy, who asked not to be quoted. Ambassador Olberg said he “sensed a clear desire to shift gears and go deeper into the substance. Two areas – decision-making and development – were most frequently cited as logical starting points: i. Decision-making was described as a “gateway” issue – critical to unlocking progress in other areas, including rulemaking and implementation. ii. Development was viewed as a core pillar of the reform agenda. This goes beyond S&DT to include addressing structural asymmetries and ensuring policy space to support national development. There was interest in exploring how S&DT could be more effective and better targeted, and broad acknowledgment of China’s announcement not to seek S&DT provisions in current and future negotiations as a positive signal.” The issue of unilateral tariffs was raised by many members. The facilitator argued that “others emphasized that the three tracks should not become silos” and that “over- prioritizing sequencing risks missing more fundamental and interconnected challenges – such as rising tariffs, the proliferation of bilateral arrangements, and the erosion of MFN.” He said “some [members] saw these as the real issues of our time and argued that conversations should proceed in parallel.” According to the facilitator, “others acknowledged the importance of these issues but questioned whether they should be addressed through this process or through another forum,” implying that they should not be part of the core reform agenda. It was also pointed out that governance discussions are inseparable from reforms under the fairness track, he said. Some argued that the current structure may constrain the conversation and proposed a more open-ended, Member-driven dialogue, asking: What kind of WTO do we want today? And what kind of commitments are Members prepared to make? This approach could provide a broader foundation for reform and support a more bottom-up, strategic process. The facilitator said that “there was consensus that reform must remain Member-driven,” insisting that “the suggestion was made that this should be on the basis of proposals rooted in today’s trade realities – not those of 1995. Members called for a pragmatic, inclusive, and milestone-driven approach.” On the WTO’s upcoming 14th ministerial conference (MC14), he said, “there was broad convergence that outcomes must go beyond general statements. Several options were suggested: i. A Ministerial Declaration or Decision outlining reform priorities and modalities post-MC14; ii. A structured post-MC14 work programme; iii. A broader vision statement reaffirming commitment to multilateralism, MFN, and inclusivity.” The facilitator noted that “some [members] stressed that MC14 should be an inflection point – not the end, but a launchpad for the next phase of reform.” “Others cautioned against raising expectations without clarity on what ministerial guidance should deliver. The message was clear: the reform process must be driven by substance – not the calendar,” he argued. The facilitator claimed that “there was support for the idea that I prepare a Facilitator’s Report under my own responsibility for the December General Council.” In conclusion, the facilitator informed members that he “will attend the G20 Trade and Investment Ministerial Meeting in South Africa – at the invitation of the G20 Presidency – where WTO reform will feature prominently on the agenda.” He concluded with his observation that “in recent months, many of you – rightly – have focused on resolving bilateral or regional trade issues. These are legitimate efforts. But in doing so, the multilateral trading system has been left on the sidelines – even as you all agree it is in need of deep reform.” “Yet, there is such a thing as the greater public good,” he said, pointing out that “yes, we must defend national interests. But as Heads of Delegation and representatives of governments, you are called to a higher purpose: to lift your sights, to consider the broader consequences, and to act in service of the collective good.” The Norwegian trade envoy, whose actions as the GC chair last year raised several controversies, cautioned that “the reform that everyone claims to support cannot succeed unless some are prepared to cede a portion of national interest for the common good. That is what leadership demands.” He said, “if you are truly committed to reform that restores trust, fairness, and functionality to the WTO, then my appeal is this: as we begin the next phase, rise above the immediate and focus on the long-term goal.” Lastly, he warned that “if we fail to do this, the consequences – for all our economies, for the trading system, and for future generations – are clear. As we shift gear into this pivotal stage, I ask each of you to come with a spirit of shared purpose. The path will not be easy – but if you lead with courage and with the common good in mind, progress is possible.” +
|
||
