TWN Info: US blocks outcomes, collapsing WTO ministerial conference like house of cards

Contents:
US blocks outcomes, collapsing MC11 like house of cards
Published in SUNS #8597 dated 15 December 2017

Buenos Aires, 14 Dec (D. Ravi Kanth) – The World Trade Organization’s eleventh ministerial conference (MC11) collapsed here on Wednesday like a house of cards, after the United States single handedly blocked outcomes on mandated decisions and the draft ministerial declaration, several trade ministers told SUNS.

The eleventh ministerial conference, however, paved the way for accelerating work on fisheries subsidies based on the draft texts.

The decision agreed on fisheries subsidies at Buenos Aires says: “members agree to continue to engage constructively in the fisheries subsidies negotiations, with a view to adopting, by the ministerial conference in 2019, an agreement on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminate subsidies that contribute to IUU (illegal, unreported and unregulated) fishing recognizing that appropriate and effective special and differential treatment for developing country members and least developed country members should be an integral part of these negotiations.”

The trade ministers endorsed South Sudan’s request for joining the WTO.

The moratorium not to impose customs duties on e-commerce transmissions (which was further clarified in a footnote following the objections raised by Indonesia), the moratorium on TRIPS non-violation and situation complaints, and the work program for small and vulnerable economies were also approved at the meeting.

While the document posted on the WTO website (WT/MIN (17)/W/6) on E-commerce transmissions as of the moment of writing (1400 hours Geneva/CET) did not have any footnote, the Indonesian minister and their chief trade official, Mr. Iman Pambagyo, said the DG had told them that he is attaching a footnote clarifying that “electronic transmissions does not include trade in goods and trade in services.”

The ministerial decision on e-commerce based on the existing mandate based on the 1998 work program seeks to “reinvigorate” work “and instruct the General Council to hold periodic reviews in sessions of July and December 2018 and July 2019 based on the reports submitted by the relevant WTO bodies [the Council for Trade in Goods, the Council for Trade in Services, the Committee on Trade and Development, and TRIPS Council] and report to the next session of the Ministerial Conference.”

Unable to secure consensus on their different proposals for establishing a Working Party/Working Group and horizontal discussions at the ministerial meeting, the proponents opted for a plurilateral initiative on electronic commerce, said a trade minister who asked not to be quoted.

Barring these decisions, the Buenos Aires meeting failed to deliver “final substantive agreements this time,” the WTO director-general Roberto Azevedo admitted.

Azevedo shed crocodile tears on the multiple failures witnessed at Buenos Aires on the mandated issues. He said repeatedly that there were no substantive outcomes at Buenos Aires.

But he welcomed the new “dynamism” witnessed at Buenos Aires when groups of countries announced plurilateral initiatives on electronic commerce, disciplines for micro, small and medium enterprises (MSMEs), and investment facilitation.

Progress on longstanding issues was always going to be difficult and it would require a leap which was not possible at Buenos Aires, he maintained.

“Multilateralism doesn’t mean you will get what you want but it means to get what is possible,” he said.

Azevedo, however, remained upbeat about the new “dynamism”, particularly the exploratory plurilateral initiatives launched by groups of countries at Buenos Aires.

The director-general must take credit for working assiduously with major developed and several developing countries as part of a plan B to ensure that Buenos Aires gave birth to plurilateral initiatives while eroding the multilateral basis of the WTO (See SUNS #8538 dated 25 September 2017).

“There is life after Buenos Aires,” said the chairperson Ms Susana Malcorra, suggesting that Buenos Aires paved the way for addressing 21st century issues. She welcomed the plurilateral initiatives in e-commerce, and disciplines for micro, small, and medium enterprises.

[Though Azevedo and Malcorra hailed and welcomed the plurilateral initiatives, it seemed clear that these might run foul of WTO and its agreements; even the WTO posting and promoting these initiatives on its website, and expending WTO’s human and material resources for servicing such initiatives may prove problematic, without specific General Council sanction (MC11 having provided none). Without it, both Azevedo and secretariat officials involved might find themselves facing problems before the WTO Budget Committee, and the General Council that approves budgets on recommendation of that committee. SUNS]

In the absence of a ministerial declaration, Ms. Malcorra issued the chair’s statement in which she maintained that the multilateral trading system is at a crossroads. She said the decision adopted in Buenos Aires will guide members’ work in Geneva in the next two years.

South Africa’s trade minister Rob Davies said “it is a moment of truth” for the multilateral organization which faces a grave crisis.

He castigated the attempts at Buenos Aires to terminate the special and differential treatment (S&DT) flexibilities and walk away from all mandated issues while embracing new issues, which doesn’t portend well for the organization.

Barring the decision to commence structured work on fisheries subsidies and a decision on the moratorium for not levying customs duties on electronic commerce and the moratorium on TRIPS non-violation and situation complaints, the Buenos Aires meeting failed to provide any concrete outcomes on mandated issues such as the permanent solution for public stockholding (PSH) programs for food security.

Director-General Roberto Azevedo admitted both in his concluding plenary statement as well as at the press conference.

He said the work on permanent solution for PSH programs will continue along with other unresolved issues in Geneva.

During several meetings – both open-ended and small group of countries – yesterday, the US vehemently opposed many of the items including the permanent solution for public stockholding programs for food security, the language on domestic support, particularly cotton, and the special safeguard mechanism (SSM).

The draft “agricultural work program” recalled the paragraph 31 of the Nairobi ministerial decision “to advance work in all three pillars of agriculture, namely domestic support, market access, and export competition” as per the Doha work program.

It maintained that “members agree that negotiations on agriculture, including as mandated on cotton with a view to concrete and measurable outcomes, shall continue in a comprehensive and balanced manner in the Committee on Agriculture in Special Session (COA-SS).”

The draft decision says “negotiations on Public Stockholding for Food Security Purposes and the Special Safeguard Mechanism for developing country members shall continue in dedicated sessions of the COA-SS (the Doha negotiating body on agriculture) as per relevant past Ministerial and General Council Decisions.”

It says “the negotiations shall be based on existing and future proposals that may be submitted by Members” in which “special and differential treatment shall be an integral part of the negotiations.”

The draft decision also includes language proposed by the US that “members reaffirm the systemic importance of transparency as regards the implementation of WTO agricultural disciplines.”

“In the run-up to MC11, decisions were expected on a permanent solution on food security and other agriculture issues,” India said.

Without naming the United States, India said, “unfortunately, the strong position of one member against agricultural reform based on current WTO mandates and rules, led to a deadlock without any outcome on agriculture or even a work programme for the next two years.”

US also blocked the draft ministerial statement issued by the chair of the conference.

The draft ministerial decision says “we reiterate paragraphs 30 and 31 of the Nairobi Ministerial Declaration, we commit to work towards more effective implementation and enforcement of WTO rules as negotiated and agreed by all and underscore the importance of implementing decisions by members.”

India initially blocked the moratorium on electronic commerce transmissions on ground that it can accept the moratorium only after members agree to the moratorium on TRIPS non-violation and situation complaints and structured work program on the relationship between the TRIPS Agreement and the Convention on Biological Diversity (CBD).

But later India agreed to take up the demand on the TRIPS and the CBD work program at the TRIPS Council.

India also blocked a draft ministerial decision on “policy dialogue” that was initiated to bring new issues such as gender and trade and labour and trade and environment into the international trade.

“There was a view amongst Ministers that the WTO can play an important role in promoting the exchange of comparative experiences and a better understanding of the implications of different policy choices,” the draft decision suggested.

India rejected the draft proposal on policy dialogue on grounds that it was not part of the WTO mandate.

The African Group of countries opposed the Chair’s weak language for continuing work on ten agreement specific proposals after the Buenos Aires meeting.

The facilitator for agricultural outcomes Ms Amina Mohamed, Kenya’s cabinet secretary, modified the draft decisions several times to ensure the US came on board to continue work on the unresolved issues.

A trade minister from the Cotton-four countries told SUNS that they had lowered their level of ambition on domestic support and market access to enable the US to agree to the language on cotton.

Despite the facilitator’s painstaking efforts, the US finally pulled the plug on agriculture at an open-ended heads of delegations (HoD) meeting on Wednesday afternoon. Once the US rejected the agriculture package, even the language agreed by the C-4 countries fell apart, the trade minister said.

In conclusion, the four-day meeting held by the Argentinean government amidst protest demonstrations on the streets of Buenos Aires was a well crafted attempt to give birth to plurilateral initiatives of the 21st century while burying the bread-and-butter issues of the Doha work program.

The conference will remain as the mother of trade ministerial summits for eroding the multilateral framework of the WTO, several ministers said.