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TWN
Info Service on WTO and Trade Issues (Mar26/15) Geneva, 13 Mar (D. Ravi Kanth) — With exactly two weeks remaining before the World Trade Organization’s 14th ministerial conference (MC14) opens in Yaounde, Cameroon, on 26 March, the final day of the General Council’s March session on 12 March appears to have laid bare the depth of divisions over WTO reform – and raised serious questions about the process that will carry the reform agenda forward to ministers at MC14, said several participants, who asked not to be quoted. The afternoon session on the third and final day of the General Council meeting on 12 March was supposed to bring the membership closer to a landing zone so as to enable a successful MC14. Instead, it seems to have produced a rather bruising three-hour marathon session that saw three separate reform proposals being introduced; a pointed public rebuke of Norwegian Ambassador Peter Olberg’s conduct in his capacity as facilitator for WTO reform; the conspicuous silence from key developing-country coalitions; and a tense standoff over what documents the General Council (GC) chair, Ambassador Saqer Abdullah Almoqbel of Saudi Arabia, would place in front of ministers at MC14, said participants familiar with the discussions. The GC chair said it is ultimately for ministers to decide in Yaounde whether they wish to endorse a ministerial declaration or whether the MC14 chair would consider it more appropriate to issue a chair’s statement under his own responsibility, according to a WTO post on its website. Concerning the ongoing conflict in the Middle East, the WTO Director-General, Ms. Ngozi Okonjo-Iweala, said that she, the MC14 host – Cameroon – and the GC chair were closely monitoring the situation and following developments that could affect the meeting and participation. In the meantime, she said arrangements for MC14 are still in place and plans have not been changed. Members will be kept fully informed and relevant updates will be shared promptly, she added. MORE PROPOSALS, NO CONVERGENCE The GC session opened with Paraguay presenting a revised version of its draft ministerial decision on WTO reform. The proposal was deliberately modest in scope – focused entirely on process, and not substance. It called for the General Council to continue work on reform after MC14 under a structured work plan with defined timelines and checkpoints, two co-facilitators representing different levels of development, and work conducted primarily at the technical level in Geneva, said participants familiar with the development. Paraguay framed it as a pragmatic fallback proposal: if a more detailed, substance-laden outcome could not achieve consensus, at least members would not leave Yaounde empty-handed, said participants, who asked not to be identified. “Is there any member that cannot live with this version?” the Paraguayan delegate asked, echoing a question the reform facilitator himself had posed not so long ago. The answer came rather swiftly and sharply, with the European Union seemingly declaring that it “cannot live with” a process-only approach, calling it a signal of the membership’s incapacity to demonstrate common direction. Japan warned that starting over on identifying topics would “waste an entire year” and was “completely damaging to our credibility,” said participants familiar with the development. Brazil is understood to have dismissed the idea that ministers could credibly emerge from MC14 with merely a six-month plan to figure out what to discuss, said participants, who asked not to be identified. Under GC agenda item 8, the United Kingdom introduced its own WTO reform paper – a more conceptual contribution organised around making the WTO “more relevant, more flexible, and more accessible.” Although the UK’s proposal was apparently broadly welcomed as a thoughtful analytical contribution, with South Africa and Malaysia praising its structure and ambitions, Colombia is understood to have pushed back sharply on the UK’s characterization of special and differential treatment (S&DT), noting that when measured by share of global trade rather than the number of members, S&DT covers only 21 percent of global trade, not the 75 percent that the UK paper implied, said participants who asked not to be quoted. Brazil appears to have made a similar point, arguing that the national security exception wielded by major economies was far more consequential to trade disruption than any use of special and differential treatment, said participants familiar with the discussions. China’s position paper on WTO reform under the current circumstances, presented under GC agenda item 9, rounded out the trio of new submissions. It emphasized a rules-based multilateral approach, the centrality of development, and the need to explore a “middle way” between moving together and not moving at all, said participants, who asked not to be quoted. The United States offered a notably candid response, agreeing with much of the UK’s diagnosis – including that the assumption of converging economic models was “not just wrong, it was foolish” – while reiterating its vision of a “limited role” for the WTO in addressing the significant challenges confronting the trading system, said people familiar with the development. It appears that the African Group, the Least-Developed Countries (LDCs), and the ACP (African, Caribbean, and Pacific) Group remained silent on the substance of the reform debate. The LDC Group, speaking through The Gambia, delivered a brief joint statement across agenda items 7, 8, and 9 that merely “took note with interest” of the Paraguay, UK, and Chinese submissions, recalled the LDC Group’s own submission, and noted the African Group’s paper – all in the span of a few sentences. Mozambique, speaking for the African Group, was even more terse: the group took note of the communications, said that they had been sent to capitals and that “reactions would be communicated.” The ACP Group, represented by Barbados, acknowledged Paraguay’s effort but said that the proposal “unfortunately does not reflect the many months that we have spent on substance,” said participants familiar with the discussions. Beyond that, the groups offered no substantive engagement with the WTO reform content, no detailed reactions to the facilitator’s package, and no signals about their “bottom lines” heading into Yaounde, said participants who asked not to be quoted. According to one trade envoy, “for a process that will ultimately require the buy-in of the vast majority of developing-country members, this silence was deafening – and deeply worrying for those hoping to broker a deal in the remaining fourteen days.” INDIA’S HARD QUESTIONS India’s trade envoy, Ambassador Senthil Pandian, apparently raised some hard questions during a series of interventions across the afternoon that cut to the heart of the process issues that many members had been circling around for weeks without directly raising them. On Paraguay’s proposal, India offered qualified support, noting that “several elements of the document resonate positively” – particularly its flexibility, its grounding under the General Council’s authority, and its avoidance of prejudging positions. India then signaled that it wanted to raise “an important issue” immediately after the agenda item, building visible tension in the room, said participants, who asked not to be identified. The Indian trade envoy apparently raised issues of credibility of the facilitator’s conduct, noting that the facilitator had publicly identified the US and India as “the two members holding back the reforms,” said participants, who asked not to be quoted. India called this a breach of the facilitator’s duty of neutrality, warning that “publicizing half-baked information, especially when being a custodian of privileged information, risks eroding foundational values, undermining and weakening the trust and credibility” of the process. India demanded clarification from the facilitator about the veracity of the statements and reminded the room that since the facilitator was not speaking in a national capacity, the rules governing the sharing of such information publicly must be followed, said participants, who asked not to be quoted. India apparently made its most consequential interventions towards the end of the meeting, asking the DG, Ms Okonjo-Iweala, as to what would be sent to ministers at MC14, said participants, who asked not to be quoted. Apparently, after the DG outlined plans to send an informal preparatory package containing the GC chair’s cover letter and the reform facilitator’s draft ministerial statement and work plan, India sought to know whether the package would also include members’ proposals that specifically addressed the ministerial statement and work plan – or only the facilitator’s version, said participants familiar with the discussions. Ms. Okonjo-Iweala is understood to have confirmed that the package would only contain the facilitator’s report, to which India said, “That doesn’t give a complete picture of what we are doing here,” said participants who asked not to be quoted. India sought more clarification, pointing out that there were in fact three proposals on the table – the facilitator’s report under his own responsibility and two proposals from members – none of which had consensus. If all three proposals for the e-commerce session were being sent to ministers despite lacking convergence, India argued, “we cannot apply different rules for different areas.” India seemingly made a request that all three reform proposals should go before ministers. Several delegations echoed elements of India’s concerns throughout the session, said participants. The Organisation of Eastern Caribbean States (OECS) questioned altogether the rationale behind a facilitator-led process, arguing that it “has the potential to be fragmented and decentralized to the detriment of smaller capacity- constrained delegations.” Hong Kong-China apparently posed pointed procedural questions about Paraguay’s proposal that implicitly questioned the facilitator model: why two co-facilitators and not one or three? Why prejudge that it would not be the GC chair who decides the modalities? Pakistan suggested that the GC chair present to ministers a statement on reform “under his own responsibility”- a formulation that would effectively sideline both the facilitator and the director-general from the driver’s seat. The perception taking hold among a growing number of delegations is that the facilitator’s draft ministerial statement and work plan – produced under the facilitator’s “own responsibility” rather than as a consensus text – are being elevated by the DG and supported by a coalition including the EU, Japan, and Singapore as the de facto basis for the reform outcome at MC14, with other proposals and perspectives being relegated to mere footnotes, said several participants, who asked not to be quoted. By contrast, the GC chair appeared to take a more inclusive approach in his remarks, offering to reference all member submissions in his cover letter and inviting any member with a reform proposal to request MIN document status, said participants, who asked not to be quoted. PROCESS SHOWDOWN The final thirty minutes of the GC session seemingly devolved into an extraordinary back-and-forth over the contents of the ministerial package – a procedural question that is, in reality, a proxy war over the substance of reform itself. The US pointedly asked that if Paraguay’s proposal – which contains an alternative draft ministerial decision and work plan – would not be included, while non-consensus proposals in other areas like development would be, what was the justification for the different treatment, said participants, who asked not to be quoted. Pakistan reinforced this by insisting that the GC chair should “exercise the discretion to decide what goes into that package.” Paraguay appears to have asked: if the documents being sent to ministers do not yet have consensus, at what point and through what modalities during the ministerial will actual negotiations take place, said several participants, who asked not to be quoted. In her rather puzzling response to Paraguay, pointing to a formal negotiating session in the MC14 schedule, the DG suggested that facilitators could use break times, lunch periods, and other intervals when ministers were not in the breakout sessions to “take the draft document and take a look at it and see how they want to convene ministers to be able to look at those documents and agree,” said participants, who asked not to be quoted. According to several participants, the DG’s remarks indicated that the actual negotiation of the reform outcome – the drafting and redrafting of what could become a ministerial decision – would not happen in the structured, transparent plenary or breakout sessions laid out in the “Road to Yaounde” modalities document, but in informal settings on the margins and during breaks. The implication was unmistakable: while the formal MC14 programme binds ministers to four thematic breakout sessions on reform – foundational issues, decision-making and past mandates, development, and “level playing field” issues – the real deal-making is envisaged to take place in what amounts to “green room” configurations, convened by the facilitators outside the official schedule, said participants, who asked not to be quoted. For smaller and capacity-constrained delegations already struggling to cover the breakout sessions with listening- in rooms offering English-only audio, this raises profound questions about who will actually be in the room when the reform text is being negotiated, said a trade envoy, who asked not to be quoted. The EU and Singapore apparently supported the DG’s proposed approach. Singapore warned against sending ministers “a compilation of 200 pages which I can assure you none of our ministers would read.” Brazil argued that it had invested in the facilitator-led process for nine months rather than submitting its own proposal, and that “the idea here is to converge.” The EU said it was “enough” for the GC chair to send a cover note annexing the facilitator’s draft ministerial statement and work plan, noting it was not a consensus document. Apparently, the GC chair adopted an inclusive approach, stating that “I think that all should be captured and to make ministers aware” in his cover note to ministers, said participants, who asked not to be quoted. This was a significant statement, said a trade envoy, arguing that the GC chair, as the only one of the three principals – the chair, the director-general, and the facilitator – who holds formal institutional authority over the reform process by virtue of the General Council’s mandate, was asserting that all member contributions deserved to be placed before ministers on an equal footing. The DG followed up to re-frame the arrangement in starkly different terms. She appears to not have endorsed the GC chair’s inclusive approach, suggesting that the package she was “contemplating” would contain only the facilitator’s report and draft work plan, and that members wishing to have their proposals seen by ministers could submit them separately as MIN(26) documents – a procedurally available but practically inferior route that places the burden on individual delegations rather than carrying their proposals under the institutional weight of the GC chair’s transmission, said a trade envoy, who asked not to be quoted. Following the DG’s assertion, the GC chair apparently made a change in his closing formulation from his earlier offer to include all submissions in his cover letter to a more limited invitation. The Saudi chair said that members could request MIN document status from the Secretariat, and that he would “mention” their proposals in his cover note. The GC chair’s concluding remarks appear to have reinforced the perception among several delegations that the facilitator and DG have effectively assumed operational control of the reform process, with the GC chair – the one actor who actually holds the institutional mandate – being progressively sidelined, said participants, who asked not to be quoted. As one Geneva-based trade diplomat put it: “The facilitator has completely hijacked the process from the GC chair, who is the only one in this trilateral who has the authority.” ROAD AHEAD During the final afternoon of the General Council meeting, it appears to have emerged that the WTO reform process is fracturing along multiple fault-lines simultaneously, said a South American participant at the meeting. Clearly, there are substantive divisions between those who insist on a substance-rich MC14 outcome and those who would accept a process-only mandate rather than risk no outcome at all, the participant said, adding that there are institutional tensions – between the GC chair’s prerogatives and the facilitator’s accumulated authority, and between both of them and the DG’s determination to send a coherent package to ministers. There are also procedural disputes – over the fundamental fairness of elevating one non-consensus document while sidelining others. With two weeks to go to MC14, the membership seems to have no agreed reform text, no consensus on what documents to place before ministers, and no clear process for negotiating during the ministerial itself, said participants, who asked not to be identified. The DG’s remarks have now confirmed what many feared: that the formal breakout sessions at MC14 are designed for ministerial conversation, not negotiation, and that the actual text-based work will happen in informal configurations during breaks and along the margins – raising the spectre of the “green room” dynamics that developing countries have long resisted. The African Group and LDCs – representing the host continent and the most vulnerable members – have yet to show their hand. And the facilitator’s credibility has been publicly questioned on the record – “a long time coming”, according to one Latin American ambassador. The DG acknowledged the gravity of the moment in her closing remarks, urging members not to emerge from Yaounde unable to articulate what the WTO should work on. “It will look very hard in my view and damage the credibility of ministers if they come out not being clear on what should be the work that is to be done at the WTO,” she warned. But whether that message will concentrate minds or simply harden positions remains an open question as the clock counts down to Yaounde, said several participants, who asked not to be quoted. +
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