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Info Service on WTO and Trade Issues (Nov25/15) Trade:
India tells DG WTO reforms serve interests of industrialized countries Geneva, 17 Nov (D. Ravi Kanth) -- At a meeting convened by the Confederation of Indian Industry (CII) in Visakhapatnam on 14 November, India's Minister of Commerce and Industry, Piyush Goyal, conveyed to the World Trade Organization's Director-General that ongoing discussions on WTO reform appear to be framed in a manner that serves the interests of the advanced industrialized countries. During the CII meeting and the subsequent one-on-one discussions, India is understood to have stated that jettisoning the treaty-bound rights of developing and least-developed countries - namely, the principle of decision-making by consensus and special and differential treatment (S&DT) - have become the leitmotif of discussions convened by the facilitator, Ambassador Petter Olberg of Norway, according to people familiar with the development. The WTO Director-General, Ms Ngozi Okonjo-Iweala, had reportedly noted that the consensus-based decision- making process is causing paralysis in reaching agreements at the WTO. As the multilateral trading system is facing collapse under the burden of reciprocal tariffs imposed by the Trump administration, the DG said, "Let us use this opportunity of the crisis... to solve the challenges in the WTO and strengthen the system," according to a report in The Hindu newspaper. She also reportedly stated that it is positive for India to be negotiating a bilateral trade agreement with the US, which has unilaterally imposed high tariffs on the country. The DG reportedly pressed India to take a leadership role in the ongoing WTO reform discussions, despite being fully aware that India's core demands - to preserve consensus-based decision-making and the S&DT provisions based on the Enabling Clause - are being diminished, said a former Indian trade official present at the meeting. In response, Minister Goyal said that New Delhi is willing to play a leadership role in driving WTO reforms but emphasized that the nature of those reforms must be shaped in consultation with developing and least-developed countries to ensure they serve global welfare rather than the agenda of a few advanced nations, the official said. Mr. Goyal stated that as a responsible global citizen, India will continue to be the voice of the Global South. "We would love to lead reforms [at the World Trade Organization]. But that reform will be decided in consultation with other developing and less developed countries, so that we can truly work for the welfare of the world and not just the agenda of a few developed nations," he said. Developed nations, including the US, are pushing for reforms in the WTO. However, India and other developing countries are demanding reforms in areas such as the dispute settlement mechanism, S&DT for developing countries, and the way agreements are negotiated. Regarding his meeting with the WTO chief on 14 November, Mr. Goyal said they discussed the upcoming WTO's 14th Ministerial Conference (MC14), to be held in Cameroon in March next year, along with various other aspects, including reforms. "We have the demand for a permanent solution to the public stockholding issue. We want the dispute resolution mechanism to be revived. There are many agendas which we discussed (with the DG)," he said. Meanwhile, speaking to reporters after her meeting with the Indian Minister, Ms. Okonjo-Iweala said: "We discussed about WTO, we also have to strengthen the multilateral system and we would like India to take a lead in doing that." "We will also be looking at some of the issues that India is interested in like past mandates to do with public stockholding. How should we do it, the past mandates in the reform programme. So, we would like India to be very active and a leader in the reform process," she said. She added that some of the criticisms made by India and other emerging economies are valid, and similarly, criticism flagged by the US is also valid. FACILITATOR'S MOVES Meanwhile, during a meeting on S&DT convened by the facilitator with select countries on 13 November, several developing countries, including India, are understood to have rejected the "top-down" approach which links S&DT with the Uruguay Round results while ignoring the existing Doha mandate on implementation issues and S&DT, said people familiar with the discussions. The facilitator seemed rather piqued that his one-page report, which seeks to make a radical departure from the existing S&DT architecture, had been leaked to the press, without reference to the SUNS, which had reported on his "Development and S&DT - Reflections on Exploring Reform," said participants who asked not to be quoted. "Increasingly, we are losing trust in the facilitator's process because he is not only conflating the discussions according to his interests but also downplaying the demands of the developing countries," said one participant. The facilitator appears to be formulating his views based on the suggestions made by a group of industrialized countries known as the "Friends of the System", said another participant. Prior to the 13 November meeting on S&DT, Ambassador Olberg issued a report to members that seemingly confounded the discussions by giving precedence to the views of select countries, said people familiar with the development. In the restricted report (Job/GC/469) issued on 5 November, seen by the SUNS, he claimed that he is "committed to ensuring that our reform efforts are Member-driven, transparent, inclusive, and efficient." However, a trade envoy who spoke to the SUNS said the facilitator's process "is flawed", adding that several major developing countries were not even invited to the small-group meetings. The facilitator said he had "invited the coordinators of the African Group, LDC Group, ACP Group, and Arab Group - slightly larger groups that typically coordinate their positions." Without naming any specific countries, the facilitator said that "delegations emphasized the need to present Ministers with clear options to guide post-MC14 work. Issues such as decision-making, development and S&DT, and fair competition would naturally feature, supported by mechanisms to capture and synthesize Ministerial guidance." One trade envoy said several countries opposed this statement, arguing that any reform report lacking mention of the reform of the WTO's enforcement function or dispute settlement system lacks credibility. The facilitator said that "views varied on sequencing and linkages among topics. Some saw decision-making, development, and fair competition as interconnected; others viewed them as distinct, advocating for an initial stocktake or issue-specific unpacking." "Others considered the five perspectives complementary, supporting both high-level Ministerial preparation and focused issue refinement," he added. He acknowledged that "a recurring question was "reform - to what end?" Members emphasized the need to clarify the WTO's purpose and functions - whether centred on negotiation, enforcement, monitoring, or development - before determining reform priorities." Ambassador Olberg said, "while perspectives remain diverse, there is shared commitment to WTO reform. Many agreed that discussions should continue beyond December, with some supporting a facilitator's report as a basis for work toward MC14 and MC15." "To bridge differing views," he said, "a smaller follow-up meeting explored a pragmatic, parallel approach: continuing the scoping exercise while preparing for a Ministerial dialogue that clarifies vision, defines the discussion format, identifies key topics and questions, and designs mechanisms to capture outcomes. These efforts will continue inclusively, with findings reflected in the December report." The facilitator said, "Members began by reaffirming a shared premise: consensus-based decision-making remains fundamental and uncontested." However, the facilitator's claim that the discussion "should be on ensuring that consensus functions effectively, supported by a fact-based discussion," is somewhat misleading, said an African trade official. The facilitator argued that "While consensus itself was not challenged, others observed that it is increasingly used as a veto, impeding progress and disadvantaging others." When proposed Joint Statement Initiatives (JSIs) such as the Investment Facilitation for Development Agreement are imposed with "brute" force despite being allegedly procedurally and systemically inconsistent with the WTO rules, countries have a right to use the consensus principle on ethical considerations, said a developing country trade envoy. The envoy suggested that under the pretext of "current realities", the facilitator is imposing the views of select countries on others, and those seeking to whittle down the consensus principle are advancing changes on the basis of an "agile and responsive process aligned with current realities." The facilitator said that "various flexibility options were put forward - such as opt-outs, reservations, non-binding instruments, and disassociation from decisions - to allow willing Members to advance while enabling others to join when ready." Ambassador Olberg echoed that "concepts such as variable geometry and flexible multilateralism were seen as worth pursuing, provided smaller Members were not left behind." He also maintained that "others proposed limiting the ability to block consensus to situations where demonstrable harm would result to non-participants, with objective justification required." Without mentioning China, which had previously spoken about "Pareto optimality", the facilitator said "others expressed interest in applying a Pareto or "do no harm" principle, emphasizing that managing negative spillovers is central to a functioning multilateral system." The facilitator said: "Yet others referred to Article IX of the Marrakesh Agreement, suggesting that its voting provisions could be operationalized when consensus proves impossible." +
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