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TWN
Info Service on WTO and Trade Issues (Oct26/18) Geneva, 16 Oct (D. Ravi Kanth) –The facilitator overseeing the World Trade Organization (WTO) reform track on development has created silos of “smaller configurations” in scheduling a meeting for 16 October. This appears to be an attempt to gloss over the opposition by a majority of countries to changes in the development architecture proposed by a small group of nations, said people familiar with the development. The central goal of the small group of countries seeking to fundamentally change the development architecture is reportedly to deny the treaty-embedded special and differential treatment (S&DT) for developing countries based on a self-designation criteria, sources familiar with the development said. Ambassador Nthisana Motsete-Phillips of Botswana, the facilitator tasked with conducting the discussions on development, who was a former administrative official at the WTO Secretariat and the International Monetary Fund, has reportedly shown her hand. A trade envoy who requested anonymity said that she is seemingly framing questions to advance the specific agenda of the United States, the European Union, the “Friends of the System” group, and others. Against this backdrop, the facilitator has created small-group discussions – a practice previously adopted by former facilitator Ambassador Petter Olberg of Norway that seemingly confounded the issues, the trade envoy added. CONVENING NOTICE In the convening notice (ICN/GC/REFORM/11) sent to members for the meeting on 16 October, the facilitator offered a seemingly quixotic rationale, stating: “given that Members have consistently emphasized that development is central to the reform effort and should be addressed across all four tracks of work, I would like to use the time of our next session to take stock of where we are and consider how best to move this work forward.” The push to reform the development architecture stems from demands made by a small group of industrialized countries, particularly the US. Sources familiar with the discussions say that the US has called for scrapping the self-designation framework that allows developing countries to avail themselves of S&DT. Despite a large majority of developing and least-developed countries opposing changes to the development framework established by the 1979 Enabling Clause, the facilitator noted: “At our last session, Members expressed a range of views, both on substance and on process.” Without specifying the number of countries holding these views, the facilitator concluded that these “included the need to go deeper into specific development issues and examine them thematically; to focus on identifying concrete development challenges and possible options rather than seeking convergence prematurely; and to ensure that the work remains proposal- led.” Another developing-country trade envoy, speaking on condition of anonymity, said the facilitator’s assessment clearly appears to be a tactic to drive the debate toward fracturing the S&DT framework. “Against this background and in the absence of new proposals or a clear indication of which issue Members see as having greater scope for further discussion,” the facilitator said, “I do not believe that returning to plenary at this stage would be the most productive way forward.” Without clarifying the specific substantive positions echoed by members, the facilitator added: “Many of the substantive positions are already well known, and a further plenary discussion risks repeating exchanges that Members have had over a considerable period without bringing greater clarity to possible options for moving the process ahead.” “SMALLER CONFIGURATIONS” The facilitator justified the need to move the session on 16 October “for focused consultations in smaller configurations, with the aim of engaging more interactively on how to take forward the issues and ideas that have emerged from the written and oral contributions to date, and, in particular, to see whether a way forward can emerge as we prepare for the WTO Reform Month.” In a seemingly “top-down” approach, the facilitator urged members to avoid restating “well-known positions but rather considering how ideas might be refined, adapted or combined in light of Members’ views.” “Where there is not sufficient support for a particular approach,” the facilitator asked “Members to consider what other approaches might help us better identify the development challenges and possible ways of addressing them.” She maintained that “the aim is to identify practical ways of moving the work forward, informed by the different perspectives and concerns Members have put forward.” The facilitator divided members into the following groups: 1. Under the African Group and the Least Developed Countries (LDC) Group, she grouped countries including Afghanistan, Angola, Bangladesh, Benin, Botswana, Burkina Faso, Burundi, Cabo Verde, Cambodia, Cameroon, Central African Republic, Chad, Comoros, Congo, Cote d’Ivoire, Democratic Republic of the Congo, Djibouti, Egypt, Eswatini, Gabon, Gambia, Ghana, Guinea, Guinea-Bissau, Haiti, Kenya, Lao PDR, Lesotho, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Morocco, Mozambique, Myanmar, Namibia, Nepal, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Solomon Islands, South Africa, Tanzania, Timor-Leste, Togo, Tunisia, Uganda, Zambia, and Zimbabwe. This group is allotted time between 08:30 and 10:00. 2. The second group, comprising the Arab Group and ASEAN (Association of South-East Asian Nations), includes Bahrain, Djibouti, Egypt, Jordan, Kuwait, Mauritania, Morocco, Oman, Qatar, Kingdom of Saudi Arabia, Tunisia, United Arab Emirates, Yemen, Brunei Darussalam, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand, Timor-Leste, and Viet Nam. Members in this group are given time between 10:00 and 11:30. (The facilitator has not explained the underlying rationale for grouping countries with widely differing economic realities). 3. The third group, designated as Group 1, comprises Australia, Bangladesh, Brazil, Canada, China, the European Union and its Member States (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czechia, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden), India, Israel, Japan, Republic of Korea, Republic of Moldova, New Zealand, Pakistan, Sri Lanka, United Kingdom, Ukraine, and United States. Members in this group are given time between 10:00 and 11:30. 4. Another group, called Group 2, includes Afghanistan, Albania, Armenia, Georgia, Hong Kong-China, Iceland, Kazakhstan, Kyrgyz Republic, Liechtenstein, Macao-China, Maldives, Mongolia, Montenegro, Nepal, North Macedonia, Norway, Russian Federation, Switzerland, Chinese Taipei, Tajikistan, and Turkiye. (Interestingly, Afghanistan figures in the African Group and LDC Group as well as in Group 2). This group is allotted time between 14:00 and 15:30. 5. The fifth group, the “CARICOM and Pacific Group,” includes Antigua & Barbuda, Barbados, Belize, Dominica, Grenada, Guyana, Haiti, Jamaica, Suriname, Trinidad & Tobago, St. Kitts & Nevis, St. Lucia, St. Vincent & Grenadines, Fiji, Papua New Guinea, Samoa, Solomon Islands, Tonga, and Vanuatu. Members of this group will have time between 15:30 and 17:00 to express their views. 6. The sixth group, called the Latin Group, includes Argentina, Plurinational State of Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Suriname, Uruguay, and Bolivarian Republic of Venezuela. ORAL REPORT In her report on the informal plenary session held on 28 September, the facilitator said the first segment of the meeting was devoted to presenting new proposals and Members’ comments on those submissions. These included the proposal entitled “Strengthening Inclusivity of Plurilateral Initiatives,” circulated in document WT/GC/REFORM/W/11 by Singapore, New Zealand, and Norway. She noted, “the proposal would establish a one-stop platform bringing together technical assistance and capacity-building resources, supported by a pool of volunteer experts, to help developing and LDC Members assess and engage in plurilateral initiatives.” The proposal was questioned “about how the platform would distinguish capacity constraints from deliberate choices not to participate; whether experts nominated by participants would be sufficiently impartial; whether support would be conditional on participation in plurilateral initiatives; and whether the approach should extend beyond plurilaterals.” Commenting on China’s proposal, “Further Reflections and Suggestions on WTO Reform,” circulated in document WT/GC/REFORM/W/12, the facilitator said that it “proposes that reform discussions should begin by reviewing the development opportunities and challenges identified by developing Members as they integrate into the multilateral trading system; improving existing WTO rules, tools and mechanisms that could better enable their effective integration; and developing new ones where necessary, covering both longstanding and emerging issues.” China was asked “how a needs-based approach would relate to existing S&DT provisions and whether it could shift the burden to developing Members, as well as whether new specialized bodies could risk fragmenting the system and which international organizations might be involved.” According to the facilitator’s report, China “explained that its reference to needs assessments was illustrative, that longstanding and emerging issues should not be viewed as a binary choice, and that it would take Members’ comments into account as it further developed its thinking.” Regarding “expectations for the work under this Track, there was broad recognition that it should add value rather than duplicate work being undertaken elsewhere,” the facilitator said, noting that “views differed, however, on how this should be understood.” The G90 Agreement-specific proposals were cited as one example. Members taking this view stressed that if the approach were otherwise, the same standard should apply across all reform tracks, and they asked the General Council chair to ensure coherence and balance in this regard. Many developing countries demanded “making S&DT more effective; taking stock of why past efforts in the WTO have not delivered for LDCs; understanding why some Members have integrated more successfully into the multilateral trading system than others; and undertaking evidence-based problem identification.” Many members also expressed differing views “on the role of needs assessments.” The facilitator stated, “some Members considered them potentially useful for implementation, while others cautioned against using them as a gateway for agreements that have not yet been incorporated into the WTO.” In a seemingly confusing assessment, the facilitator said that “on categorization and differentiation, some [industrialized, particularly the US] Members considered self-designation outdated in light of increasing heterogeneity among developing Members and argued that support should instead be targeted according to need.” Without naming or quantifying the countries, the facilitator appeared to say in a seemingly misleading way that “others viewed self-designation as part of the negotiated balance and considered that the central question should be whether S&DT is delivering effectively. From this perspective, Members asserting that the current system is unsustainable were asked to provide supporting evidence.” Several developing countries suggested that the flexibilities available to developed Members, including in agriculture, be examined in parallel. “Suggestions also included examining rules affecting industrialization, such as TRIMs and TRIPS, and targeting support according to particular circumstances through crisis response tools. One proposal was to distinguish between the institutional, legal and development dimensions of S&DT.” According to the facilitator, “on voluntary opt-outs, there was broad recognition that these constitute a sovereign choice that several Members have already made. Many Members stressed that opt-outs should remain voluntary and agreement-specific, without affecting a Member’s status or other rights.” On differentiation based on objective and transparent criteria, as proposed by the US and the EU, the facilitator said “proponents reiterated their openness to combining different criteria, including a development index, and to addressing specific circumstances, such as those of small and vulnerable economies.” However, “many Members expressed reservations about using income or trade-share thresholds as the basis for differentiation.” Furthermore, many members questioned the proponents about “the legal basis for such criteria and possible lessons from the Trade Facilitation Agreement.” The facilitator stated that “on policy space for industrialization and structural transformation, I heard a number of Members describe this as central to the work of this Track.” Many members “also noted that policy space is not new to the WTO legal architecture but has been part of it since the WTO’s establishment as negotiated concessions.” The facilitator added: “Suggestions included examining whether existing disciplines distinguish legitimate development policies from harmful distortions; making greater use of under-utilized flexibilities; and grounding any new flexibilities in demonstrated needs. Several Members underlined the importance of coherence with the Level Playing Field Track.” The facilitator maintained that “a request was also reiterated for Secretariat mapping of WTO provisions relevant to policy space for industrialization, structural transformation and economic diversification.”
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