TWN Info Service on WTO and Trade Issues (Oct26/17)
16 October 2026
Third World Network

WTO: Facilitator pushes for "deeper dive" into LPF issues amid divisions
Published in SUNS #10535 dated 16 October 2026

Geneva, 15 Oct (D. Ravi Kanth) -- The facilitator overseeing the World Trade Organization reform track on "level playing field" (LPF) issues is convening an informal plenary session on 19 October, as "Members would like to deepen discussion under this track," said people familiar with the discussions.

Given the continued unbridgeable positions in areas like LPF issues to address the specific concerns of the United States, the European Union, and Japan, among others - who had earlier piloted the LPF issues through their trilateral agenda outside the WTO - the facilitator conceded in his last report that "throughout the discussions, Members continued to express different views on the scope of this track." 

In an email (ICN/GC/REFORM/12) sent to members on 9 October, seen by the SUNS, the facilitator, Ambassador Elmer Jose German Gonzalo Schialer Salcedo of Peru, said he heard "that Members are still preparing specific papers on some of these issues."

The facilitator said he "will therefore continue my outreach to Members to explore how best to take a deeper dive into the areas of interest to Members, while allowing additional time for Members to finalize their papers."

He claimed that there was "a useful initial discussion on transparency, notification and compliance [an issue at the core of the US demands on LPF issues]", including requests for more information on the current state of play to support an informed discussion."

Earlier, members had called on the WTO Secretariat to map out all issues falling under the LPF domain.

The facilitator said that "it would [be] useful to invite the Secretariat to present their latest reports," suggesting that "the discussion we had at the last session could benefit from further consideration."

He structured the upcoming informal plenary meeting to commence with the presentation of Members' submissions, which include:

1. WTO Reforms on Level the Playing Field - Communication from Australia (WT/GC/Reform/W/16); and

2. Level Playing Field Issues - Communication from Paraguay (WT/GC/Reform/W/17).

Ambassador Salcedo said he will open the floor for "Members to engage with Australia and Paraguay on their respective papers."

He plans to continue the discussion on "transparency, notification and compliance", with a presentation by Mr. Roya Santana, Secretary to the Council for Trade in Goods, Market Access Division of the WTO Secretariat.

The facilitator urged members "to look at the following reports in advance:

* Report on the Status of Notifications under the Provisions of the Agreements in Annex 1A of the WTO Agreement (G/L/223/Rev.33);

* Status of Regular/Periodic and One-Time Only Notifications in the Goods Area (1995-2024) - Report by the Secretariat (G/C/W/859); and

* Structured Summary of Reports on How to Improve the Notification of Regular/Periodic and One-Time Only Notifications (G/C/W/886/Rev.1)."

"In light of Members' written and oral submissions, as well as the presentations made," the facilitator said he wants to hear "Members' perspectives on how to carry forward the work in this area in the context of reform."

ORAL REPORT

In his oral report on LPF issues presented on 30 September, the facilitator said that "many Members supported a mapping exercise to identify asymmetries and distortions relevant to LPF discussions."

The facilitator's report, without naming countries or quantifying the numbers behind the rampant use of the terms "some", "other", and "many", seemingly creates a misleading picture, said people familiar with the report.

Ambassador Salcedo said that "suggestions included covering historical and contemporary asymmetries, structural and capacity differences, differences between the commitments of original and acceded Members, and notification gaps."

He said that "some Members envisaged a supporting role for the Facilitator and the Secretariat through factual or analytical inputs."

In this context, members insisted that "any exercise should remain Member-driven, be based on an agreed methodology, avoid prejudging outcomes, and not rely excessively on Secretariat analysis or even external indicators."

Members also insisted that discussions should be based on "data and evidence," with several "Members who considered that discussions should be based on facts and proposals from Members and cautioned against relying on Secretariat-driven data or external benchmarks."

At the same time, the facilitator noted, "there were Members who supported enhanced Secretariat data collection and research, and drawing on indicators from other international organizations and research institutions, with due regard to differences in scope and purpose of such data and reports."

CHINA'S PROPOSAL

During the meeting, according to the facilitator, China introduced its paper (WT/GC/REFORM/W/12), titled "Further Reflections and Suggestions on WTO Reform".

The facilitator said China "expressed openness to exploring updates to the ASCM (Agreement on Subsidies and Countervailing Measures), enhancing transparency and improving coordination on industrial policies."

However, according to the facilitator, "China considered that reform should not be benchmarked on accession or FTA commitments and should focus on specific government actions rather than broad labels [like excess capacity or state-owned enterprises]."

It appears that members questioned China's paper on several aspects, including:

1. "How to distinguish legitimate industrial policy from interventions with negative spillovers;

2. How policy coordination would work in practice, and whether the WTO is the right forum for that;

3. Whether the scope extends beyond the ASCM to state enterprises, remedies and transparency; and

4. Which sources of evidence would be relevant and how to ensure a level playing field irrespective of ownership."

According to the chair's note, in its response, "China explained that any ASCM update should be shaped by concrete Member proposals, and it is preparing its contribution."

On coordination, the facilitator said that in China's view, "Members need to find more forums to have candid discussions on specific industrial policies rather than discussing them only in the abstract."

According to the facilitator, "China appreciated the efforts by Canada and Costa Rica in organising an informal dialogue on industrial policies that could serve as one platform for in-depth discussions among Members on both the positive and potentially problematic aspects of industrial policy design."

It appears that China suggested that "Members should consider whether other platforms, including existing ones, could facilitate similar discussions."

More importantly, China also "reiterated that privatisation and accession provisions should not form the basis of discussion", adding that "it should instead be based on information and data provided by Members."

China reminded members that many questions posed on its paper "concerned the reform discussion as a whole."

On transparency, notifications and compliance, the facilitator said that "there was broad recognition" among members that "transparency underpins trust and the functioning of the WTO."

In the facilitator's view, there were members "that considered it foundational to this track, noting that current obligations do not yield sufficient information, for example, on state interventions."

In contrast, other members "viewed notifications mainly as a compliance matter for regular bodies: relevant to a level playing field, but not for leveling [the] playing field per se."

The facilitator noted that "there was wide agreement that notification performance should not be equated with substantive compliance."

The facilitator said that "Members differed on the reasons for current compliance rates," with several members pointing to capacity constraints: limited resources, domestic coordination challenges, complex terminology, staff rotation, and language.

Without naming the countries, the facilitator said that "some underlined deliberate non-notification of significant subsidy programmes by larger Members."

Ambassador Salcedo said that "others noted that gaps also occur among well-resourced Members, or stem from differing interpretations and outdated notification design."

"Several Members suggested diagnosing the causes agreement-by-agreement and tailoring responses accordingly," the facilitator noted.

As part of offering incentives, the facilitator said that "suggestions included recognising good performers, treating notified measures more favourably, and counter-notification procedures with consequences."

The facilitator noted somewhat confusingly that "other Members cautioned that automatic consequences or a reversed burden of proof would lack legal basis and would not respect due process, particularly without a fully functioning dispute settlement system, and instead favoured positive incentives."

It is well-known that the US has proposed stringent and punitive measures for countries that fail to notify their measures on time.

The facilitator said that "there were Members that supported simplified and standardised templates, and less duplication across committees; tiered or phased requirements; digital tools, including an integrated one-stop shop building on ePing, and AI-assisted preparation; sustained, targeted technical assistance that builds lasting institutional capacity."

Further, "some Members noted that many notification shortcomings stemmed from limited administrative, technical and financial capacity," the facilitator added.

Towards the end, the facilitator noted that "several Members stressed that a fully functioning, two-tier dispute settlement system accessible to all is essential to a credible level playing field," an issue that appears to be inimical to the US, which does not want a binding Appellate Body, said a trade envoy who asked not to be quoted.

AUSTRALIA'S PROPOSAL

In its proposal (WT/GC/Reform/W/16), Australia has seemingly echoed the concerns primarily aimed at China's policies regarding subsidies and state-owned enterprises, said people familiar with the proposal.

Australia said "existing WTO rules have proven insufficient to effectively discipline the market interventions which are the root cause of unfair competition."

In Australia's world-view, weak rules have enabled countries to resort "to tariffs, investment restrictions, surtaxes and other measures outside cooperative frameworks."

Australia said that "while these measures may seek to mitigate immediate injuries, they will not resolve the challenges we face."

Australia wants "concrete discussions among the Membership on how to ensure the WTO's rules: A. Effectively discipline measures that undermine fair competition and distort production, trade and investment flows; and B. Preserve policy space for transparent, targeted and proportionate measures addressing legitimate public policy objectives."

On potential areas of reform, Australia has proposed focusing "level playing field reforms on strategic industrial sectors critical to Members' economic resilience."

In this context, Australia proposed "two potential areas of reform as an initial focus, namely state-owned enterprises and transparency."

While claiming "a legitimate role for transparent, targeted and proportionate industrial policy in addressing market failures, supporting resilience, enabling decarbonisation and promoting economic development," Australia stated that the "objective of any new disciplines aimed at restoring a level playing field should be to ensure that Members retain the flexibility needed to address genuine industrial development needs."

It also highlighted "the lack of a level playing field in agricultural trade," arguing that "just as they do in industrial policies, subsidies and other forms of unfair competition in agriculture distort the playing field and harm unsubsidised producers."

Australia argued that "it remains important that the WTO Membership continues to pursue meaningful and substantive reform of agricultural trade rules."

Australia said that "state-owned enterprises (SOEs) have come to play an increasingly prominent role in global markets compared to when the Uruguay Round was concluded."

Australia suggested that "Members could consider:

1. Developing a definition of an SOE under WTO rules, including a definition of ownership and control that addresses indirect control;

2. Strengthening SOE transparency requirements through agreed notification processes, including information on ownership, activities, control, governance, state support and non-commercial assistance;

3. Ensuring the disciplines of the SCM Agreement extend to SOEs, including where government ownership, control or direction enables trade-distorting support;

4. Ensuring administrative tribunals, regulators and other public authorities do not favour SOEs over private enterprises, and that SOEs do not perform regulatory functions in sectors in which they compete with the private sector;

5. Strengthening cooperation and sharing of best practices on SOEs;

6. Requiring SOEs to engage in activities in accordance with commercial considerations, except where delivering a clearly defined public service objective;

7. Committing to competitive neutrality between SOEs and private enterprises, to ensure SOEs compete with private enterprises on merit without receiving unfair advantages from the governments that own or control them; and

8.  Ensuring procurement rules and practices do not favour SOEs or state-linked suppliers over other suppliers, including through discriminatory access or abnormally low tenders."

Given the uneven compliance with notifications, Australia said that "actions which Members could consider include:

A. Improving the quality, use and relevance of reporting on measures that may distort trade;

B. Improving the guidance on the use of reporting templates to support more consistent, comparable and useful information;

C. Making greater use of Secretariat data, Trade Policy Reviews and other information collection tools to improve transparency regarding SOEs and state support;

D. Introducing stronger incentives to support timely, good quality and complete notifications;

E. Creating more effective counter-notification procedures;

F. Ensuring transparency obligations and information collection tools have appropriate coverage at the sub- central level; and

G. Developing more sophisticated market intelligence to highlight the extent of issues such as anti-competitive conduct, dependencies and market concentration."

PARAGUAY'S PROPOSAL

Paraguay, in its proposal (WT/GC/Reform/W/17), has placed several key points regarding a "level playing field" in five main areas, including:

1. Guiding principles for a level playing field;

2. Level playing field between different product groups (NAMA v. agricultural);

3. Level playing field between rights and obligations concerning non-agricultural goods;

4. Level playing field between agriculture-related rights and obligations; and

5. The cumulative effect of agricultural policies.

Paraguay said that it "will elaborate on these elements in a subsequent communication, providing greater conceptual details and empirical support, in order to facilitate a constructive exchange between Members." +