TWN Info Service on WTO and Trade Issues (Oct26/19)
20 October 2026
Third World Network

Trade: No convergence on development track of WTO reform
Published in SUNS #10537 dated 20 October 2026

Geneva, 19 Oct (D. Ravi Kanth) -- The discussions on the development track of World Trade Organization reform have seemingly failed to generate convergence after many developing and least-developed countries (LDCs) opposed changes to special and differential treatment (S&DT), most-favored-nation (MFN) treatment, as well as reciprocal treatment during an informal meeting on 16 October, said people familiar with the development.

The changes to S&DT, MFN, and reciprocal treatment are being demanded by the United States, the European Union, Japan, and other industrialized countries in their alleged efforts to transform the WTO into a plurilateral negotiating body, said people familiar with the discussions.

Many developing countries and LDCs also appear to have placed the importance of a binding dispute settlement system (DSS) at the center of development reform, said people familiar with the discussions.

The issue of DSS reform has been repeatedly raised in the discussions on the other tracks of WTO reform, such as on the "foundational" and "level-playing-field" issues, said people familiar with the discussions.

At an informal meeting convened on 16 October by the facilitator overseeing the WTO reform track on development in silos, the overall mood appeared to be replete with differences and a lack of trust in what is being forced through to accomplish the overarching goal of jettisoning the WTO's rules-based architecture to accommodate the varying demands of the US, the EU, Japan, and the "Friends of the System" group, said people familiar with the discussions.

"The fact that the discussions were held in silos is an attempt to obfuscate and conflate the issues," said a participant, who asked not to be quoted.

Despite attempts by the facilitator, Ambassador Nthisana Motsete-Phillips of Botswana, a former administrative official at the WTO Secretariat and the International Monetary Fund, to frame the discussions around the narrative advanced by powerful members, opposition to the proposed changes continues undiminished, with varying levels of emphasis on the importance of S&DT and MFN among others, the person said.

As previously reported, in the convening notice (ICN/GC/REFORM/11) sent to members for the 16 October meeting, the facilitator offered a seemingly ambiguous 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."

OVERALL NARRATIVE

At the meeting on 16 October, several countries offered their perspectives, with some common themes emerging in the overall narrative, said people familiar with the discussions.

China, for example, suggested "economic diversification" as a criterion, while industrialized countries suggested differentiation among developing countries for availing of S&DT and a needs-based approach - implying the scrapping of the existing self-designation framework, said people familiar with the development.

Brazil is understood to have offered an analytical and comprehensive perspective on what needs to be addressed during the discussions on development, said an Asian trade official who asked not to be quoted.

The Brazilian trade envoy, Ambassador Guilherme de Aguiar Patriota, apparently located "development" within the overall architecture of the WTO, especially how the WTO can support the development objectives of members and how the framework works, the Asian official told the SUNS after the meeting.

Without narrowing the issue of development to very concrete proposals, the Brazilian trade envoy apparently sought to know whether the WTO has any development mandate, a question that challenged members to reconsider the reforms, said another trade official from Africa, who preferred not to be quoted.

Answering his own question, the Brazilian trade envoy apparently cited paragraph one of the Marrakesh Agreement that established the WTO in 1995, the official said.

Paragraph one of the Marrakesh Agreement states in its chapeau: "the parties to this agreement, recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development."

Yet, the WTO has failed to live up to this cardinal principle of the Marrakesh Agreement, said a trade envoy, who asked not to be quoted.

If anything, it is sine qua non to discuss whether the existing WTO rules support development and whether the underlying WTO acquis can improve the rules, Brazil is understood to have asked, the trade envoy said.

With varying levels of development among countries, and with the US having raised the issue of developing its own industry to address its trade deficit, clearly development requires policy space for implementing sovereign development policies, said people familiar with the discussions.

Further, during the discussion on MFN last month, the facilitator for foundational issues stated that "Members underlined that MFN and non-discrimination remain important principles of the system, providing stability and predictability for all Members, particularly for developing and LDC Members."

The Brazilian trade envoy appears to have cited the discussion on foundational issues, where it was suggested that MFN would mean greater policy space for members and is imperative for development space, the official said.

In the 2001 Doha Ministerial Declaration, particularly paragraph 12, members agreed that "negotiations on outstanding implementation issues [arising from the Uruguay Round disciplines] shall be an integral part of the Work Programme we are establishing, and that agreements reached at an early stage in these negotiations shall be treated in accordance with the provisions of paragraph 47 below. In this regard, we shall proceed as follows: (a) where we provide a specific negotiating mandate in this declaration, the relevant implementation issues shall be addressed under that mandate; (b) the other outstanding implementation issues shall be addressed as a matter of priority by the relevant WTO bodies, which shall report to the Trade Negotiations Committee, established under paragraph 46 below, by the end of 2002 for appropriate action."

Yet, in a seemingly concerted manner, the US, the EU, and other industrialized countries, including the "Friends of the System" group, undermined progress in addressing any of the implementation issues, said people familiar with the development.

It is an open secret that the continued presence of certain commitments and obligations under the covered agreements - which otherwise fall under the implementation issues to be addressed - has denied national policy space for pursuing development options.

On treating agriculture as a development issue, several farm-exporting countries from South America, particularly Brazil, apparently drove home the message during the discussion that agriculture is one area of development that needs to be prioritized in the ongoing discussions, said people familiar with the development.

Clearly, the US, the EU, Japan, and other members of the G10 farm-defensive countries are unwilling to discuss agriculture while being prepared to discuss other issues, said people familiar with the discussions.

Against this backdrop, a deeper look into the issue of agriculture is imperative, both in terms of members' trade-distorting practices and new opportunities, Brazil apparently suggested, said people familiar with the discussions.

Australia raised agriculture in its proposal and even in the level-playing-field discussions.

According to Brazil, agriculture belongs in the level-playing-field domain because it is also a development question, said people familiar with the discussions.

On reciprocity and reciprocal demands, the US, for example, highlighted in its proposal that "plurilateral agreements would allow those Members that are ready to undertake new commitments to do so in a reciprocal manner, while allowing other Members to join and gain the benefits of those commitments in the future, when they are ready."

Harking back to its trade policy history, the US also stated that "conditional MFN was attractive precisely because it allowed for reciprocal, negotiated trade benefits."

Washington explicitly stated in its proposal that "the global trading system, embodied in the WTO, is profoundly unlevel and rife with unfair and non-reciprocal treatment of US goods and services."

Clearly, a message is being sent that the WTO reform discussions appear to be heading toward more reciprocity- oriented negotiations at the WTO - reciprocity-based negotiations being one of the new lines of thinking heard in the discussions, Brazil is understood to have conveyed.

In the 2004 framework agreement, former US trade envoy Ambassador Robert Zoellick and former EU trade commissioner Pascal Lamy agreed on what is called the less-than-full-reciprocity (LTFR) principle in agriculture negotiations, whereby developing countries would take lesser cuts in reducing their farm subsidies and tariffs.

Against this backdrop, Brazil apparently recalled that in previous negotiating rounds, from the GATT days through the Uruguay Round, the concept often emerged that developing countries should be allowed to participate in negotiations by offering concessions on a "less-than-full-reciprocity basis."

In short, the LTFR principle is sufficiently grounded in both the GATT and the 2004 framework agreement because of varying levels of development and different capacities to undertake commitments vis-a-vis industrialized countries, said people familiar with the discussions on 16 October.

On legitimizing plurilaterals, despite intense opposition from developing countries to changes in MFN treatment, the reform discussions appear to be primarily foisted onto members to undermine MFN and legitimize plurilateral initiatives by circumventing the cardinal provisions of the Marrakesh Agreement, said people familiar with the discussions.

Given the increasing currency of multi-dimensional poverty within the UN and other international bodies, it appears that the time has come to incorporate this issue in the development discussions.

This is an issue that could be studied if some members, including graduating LDCs, are interested in revisiting how countries are classified or categorized according to their levels of development, Brazil appears to have noted, according to people present at the meeting.

In short, it is also time to consider that "some rules may need to be tightened, others may need to be loosened, and some may need to be simplified," Brazil concluded.

On DSS reform, many countries repeatedly underscored the importance of DSS reform during the discussions on foundational issues, level-playing-field issues, and development.

Clearly, the WTO dispute settlement mechanism needs to be fixed, Brazil apparently emphasized, arguing that for many members, the existence of a legally binding dispute settlement system gives large and small members, developed and developing, a sense that they have the same opportunity to defend compliance with, and full respect for, the rules.

Moreover, attempts are being made by the facilitator and the proponents of reform to insist on concrete proposals - which in the arena of development have already been made in previous ministerial mandates.

Against this backdrop, Brazil appears to have cautioned against using the requirement for concrete proposals as a filter for the reform discussions, as very concrete and specific proposals on development will simply not do, said people familiar with the discussions. +