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TWN
Info Service on WTO and Trade Issues (Sep26/20) WTO:
Reform track on development sparks fears of bias against S&DT Geneva, 11 Sep (D. Ravi Kanth) -- The facilitator overseeing the discussions on the World Trade Organization reform track on “development” has scheduled a meeting for 28 September. This comes amid sustained attempts to undermine the existing special and differential treatment (S&DT) framework for developing countries based on self-designation criteria, said people familiar with the development. Although the trade negotiations continue to be conducted under the Doha Work Programme, with the WTO Director-General Ms Ngozi Okonjo-Iweala being the chair of the Doha Trade Negotiations Committee (TNC), the WTO reform discussions are proceeding without an approved ministerial mandate. The central goal of WTO reform appears to attenuate the existing S&DT framework for developing countries, as demanded by the United States, the European Union and other industrialized countries, said several trade envoys, who asked not to be quoted. Paragraph 44 of the Doha Ministerial Mandate, under the sub-title “Special and Differential Treatment”, stated explicitly: “We reaffirm that provisions for special and differential treatment are an integral part of the WTO Agreements. We note the concerns expressed regarding their operation in addressing specific constraints faced by developing countries, particularly least-developed countries. In that connection, we also note that some members have proposed a Framework Agreement on Special and Differential Treatment (WT/GC/W/442). We therefore agree that all special and differential treatment provisions shall be reviewed with a view to strengthening them and making them more precise, effective and operational. In this connection, we endorse the work programme on special and differential treatment set out in the Decision on Implementation-Related Issues and Concerns.” That mandated work programme on S&DT was further reinforced at the WTO’s Sixth Ministerial Conference in Hong Kong, China in December 2005, when trade ministers explicitly stated in paragraph 35: “We reaffirm that provisions for special and differential (S&D) treatment are an integral part of the WTO Agreements. We renew our determination to fulfil the mandate contained in paragraph 44 of the Doha Ministerial Declaration and in the Decision adopted by the General Council on 1 August 2004, that all S&D treatment provisions be reviewed with a view to strengthening them and making them more precise, effective and operational.” However, the work programme on improving S&DT, as contained in the ministerial mandates since December 2001, has allegedly been sabotaged by major industrialized countries such as the US, the EU, Japan, and several others. Instead of improving S&DT provisions in order to make them more precise, effective, and operational, the US, during the first term of the Trump administration, appears to have initiated a counter-movement in the Doha trade negotiations at the WTO by introducing “differentiation” among developing countries for availing of S&DT, said people familiar with the development. In its proposal (WT/GC/W/998), the US has stated: “For almost a decade, the United States has advocated for the establishment of objective criteria for SDT eligibility in WTO agreements. In 2019, the United States introduced a specific proposal to this effect. In this paper, "An Undifferentiated WTO: Self-Declared Development Status Risks Institutional Irrelevance" (WT/GC/W/757/Rev.1), the United States explained that self-identification had damaged the WTO's negotiating function: Simply put, self-declaration has severely damaged the negotiating arm of the WTO by making differentiation among Members near impossible. By demanding the same flexibilities as much smaller, poorer Members, export powerhouses and other relatively advanced Members ... create asymmetries that ensure that ambition levels in WTO negotiations remain far too weak to sustain viable outcomes. Members cannot find mutually agreeable trade-offs or build coalitions when significant players use self-declared development status to avoid making meaningful offers. Self-declaration also dilutes the benefit that the LDCs and other Members with specific needs tailored to the relevant discipline could enjoy if they were the only ones with the flexibility.” However, the US proposal failed to gain support and remained only on the table. Yet, through the discussions on the ongoing WTO reform track on development, a small group of powerful industrialized countries and the “Friends of the System” group seem to be altering the current S&DT architecture, said people familiar with the development. FACILITATOR’S EMAIL In an email sent to the heads of delegation (ICN/GC/REFORM/8) on 4 September, seen by the SUNS, the facilitator, Ambassador Nthisana Motsete-Phillips of Botswana, suggested organizing the “discussion in two segments.” Ambassador Motsete-Phillips, who had previously worked in the WTO and the International Monetary Fund in different administrative capacities, proposed that the first segment of discussions focus on “presentation of new or revised proposals.” “All contributions - written and oral - are, and will continue to be, welcome,” she said. “In line with established practice,” she said that she “will invite Members to introduce any new or revised proposals.” During the second segment on focused exploration of individual issues, she informed members that “building on our discussions in July, during the second segment we move to explore individual issues raised by Members in greater depth, to better understand Members' concerns and perspectives, and begin to identify areas where further work may be useful.” “With this in mind,” she said, “I invite Members to reflect on, and come prepared to engage on, the following guiding questions.” The questions framed by the facilitator under her own responsibility are divided into six themes: 1. Expectations for work under this track She said that “Members noted that “some areas are being taken up in either other Committees or processes” and stressed the need to avoid “recycling what has been done in other Committees to date”.” Accordingly, the facilitator asked members to address: “Which of the ideas shared so far are already being discussed in other WTO bodies, and which represent new reform-oriented elements that could be suitable for focused work under this track?” 2. Categorization and differentiation among developing members Seemingly reflecting the proposals tabled by the US and the EU, among others, regarding the need to dismantle the treaty-based “self-designated” system for developing countries to avail of S&DT, the facilitator said: “An observation was made that “the current self-designated system has become increasingly unsustainable and risks eroding the WTO's credibility”.” The facilitator asked: “How do Members assess the adequacy of the current S&DT architecture, and what elements, if any, of a more targeted, or needs-based approach could be explored further?” By framing the above question, Ambassador Motsete-Phillips appears to be showing her hand in reinforcing the demands raised by the US and the EU, among others, said a trade envoy, who asked not to be quoted. Privately, concerns are being raised as to whether the facilitator is playing to the gallery of the powerful proponents and is being allegedly guided by the WTO Secretariat, said some trade envoys who asked not to be quoted. 3. Voluntary opt-outs Without naming the major opponents of the current S&DT architecture, the facilitator stated that “questions were posed regarding “the circumstances under which a voluntary approach would remain appropriate” and whether clearer expectations may be needed.” By not revealing the names of the countries asking about a “voluntary approach”, the facilitator seems to be taking sides against the developing countries, said a trade envoy, who asked not to be quoted. Basing the discussion on voluntary opt-outs, the facilitator asked: “How do Members view the voluntary opt-out approach for S&DT, and what conditions or parameters would make such an approach credible, predictable and effective?” It appears that the facilitator is already jumping to conclusions on what could be done, such as the “voluntary opt-out approach,” which was never remotely mooted by the developing countries and which goes against the existing ministerial mandates, the trade envoy said. 4. Differentiation based on objective and transparent criteria Despite fierce opposition to “differentiation based on objective and transparent criteria”, and without naming the US and other industrialized countries, the facilitator appears to be stating the issues rather controversially, said the trade envoy, who asked not to be identified. For example, without naming the US and other industrialized countries, the facilitator stated: “Members referred to income thresholds, export shares, staged accountability and a proposed development index.” Ambassador Motsete-Phillips asked: “Have Members advanced their thinking on possible objective criteria or indicators for differentiation, and is any proposal incorporating such elements being developed?” 5. Policy space for industrialization and structural transformation She stated: “calls were made to support policy space, while some Members cautioned that policy space should not become a basis for non-compliance.” Many developing and even least-developed countries have repeatedly demanded “policy space” for their industrialization and other development-oriented initiatives. The facilitator asked: “How should this track approach questions of policy space in a manner that supports industrialization and diversification, while ensuring coherence with existing disciplines and avoiding duplication of work underway in other WTO bodies?” At a time when powerful members have allegedly blatantly violated the WTO’s existing disciplines with their unilateral tariff and non-tariff measures - measures that have “asphyxiated” the multilateral trading system and the WTO - the facilitator ought to know that it is unfair to suggest compliance with “existing disciplines”, the trade envoy said. 6. Process-related suggestions Lastly, the facilitator said that “members requested a more structured format for future discussions, while noting the capacity constraints faced by smaller delegations.” She sought to know: “what structured modalities - for example, written Q&A, dedicated plenary sessions or a centralized portal - would best support inclusive and effective engagement without imposing additional burdens on Members with limited capacity?” Regarding the “organization of discussion in the second segment,” the facilitator said that she wants to “ensure a structured, focused and meaningful exchange; I would suggest that we take up each of the guiding questions in turn, moving to the next question once the discussion on a particular issue has been sufficiently explored.” “To allow sufficient opportunity for exchanges among Members, interventions should be limited to a maximum of three minutes,” the facilitator said, suggesting that “should we not exhaust consideration of the guiding questions, we will continue our exchanges at the session in October.” In conclusion, several trade envoys, who asked not to be quoted, said that it was somewhat disturbing to see the facilitator frame the questions in an allegedly biased, proponent-friendly manner rather than adopting a balanced, and historically consistent framework. One trade envoy suggested that the facilitator’s questions should be discarded completely as they lack credibility and integrity.
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