TWN Info Service on WTO and Trade Issues (Jan16/01)
29 January 2016
Third World Network

US, EU begin their campaign for new issues at WTO
Published in SUNS #8166 dated 26 January 2016

Geneva, 25 Jan (D. Ravi Kanth) -- With the ink hardly dry on the month-old Nairobi Ministerial Declaration (NMD), the United States, China, the European Union, Australia, Canada, and other major developed countries on Saturday (23 January) have begun their campaign at Davos for pursuing "new issues" at the World Trade Organization (WTO), several participants told the SUNS.

[The NMD, in its operative Para 34, has said without ambiguity: "While we concur that officials should prioritize work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all Members." - SUNS]

The new issues proposed by China, the European Union, Canada, Korea, and Thailand among others include digital trade, investment, small and medium enterprises, and domestic farm subsidies. Brazil is reported to have said it is ready to "examine any new issue" that is mature for multilateral commitments.

Without mentioning the Doha issues, the US maintained that there is a fair degree of consensus for adopting "new approaches" to address the "outstanding" issues.

The US stance to do away with the Doha Development Agenda (DDA) architecture based on special and differential treatment flexibilities and less-than-full-reciprocity (LTFR) commitments in market access for agriculture and industrial goods to address the remaining "Doha" issues is also shared by the EU and other major developed countries.

China proposed a "solidarity work program" in which it called for examining new issues such as e-commerce and investment while simultaneously carrying out work on market access for agricultural products, industrial goods, and services based on the Doha framework.

The European Union called for pursuing new issues such as digital trade, investment, and domestic farm subsidies.

Several other countries at the meeting such as Korea and Thailand called for including small and medium enterprises in the new issues.

During a closed-door informal ministerial meeting convened by Switzerland on the margins of the annual World Economic Forum event in Davos, the major industrialized countries, especially the US and the EU, began preparing the ground for "new issues" and "new approaches" on the presumption that the DDA negotiations are dead, said a trade minister from a developing country.

The informal meeting was convened by Switzerland to chalk out the immediate priorities and what needs to be done for the WTO's eleventh ministerial meeting next year.

Participants at the meeting included the United States, the European Union, Hong Kong-China, Indonesia, Japan, South Africa, Kenya, Argentina, Australia, Canada, Lesotho, Mexico, Norway, Pakistan, Russia, and Thailand.

India was not present at the meeting.

The WTO's director-general Roberto Azevedo claimed that the Nairobi ministerial meeting is a "big success", arguing that it builds on the outcomes reached at the Bali ministerial meeting in December 2013.

Azevedo said members must pursue the remaining DDA issues but must be open to talk about new issues without prejudice to the outcome.

Azevedo said members must start with a conversation and remain open to ideas of flexibility and inclusiveness.

The director-general called for greater private sector engagement in the conversations on new issues at the WTO, according to participants present at the meeting.

During the half-day Davos meeting, Kenya's permanent secretary for foreign affairs Amina Mohamed, who chaired the Nairobi ministerial meeting, said "success begets success."

She said members must now broaden the conversation to include the private sector. She said she was "tired of alarmist rhetoric of trade vs. GDP," but did not mention how to address the remaining issues of the DDA during the meeting, according to a participant who asked not to be quoted.

The EU's trade commissioner Ms Cecilia Malmstrom said the Nairobi ministerial meeting provided "happiness" as it is an "important" development.

Malmstrom said members must now move forward and focus "on issues of value added to WTO such as trade facilitation and export competition."

She called for "new approaches in a flexible and inclusive way" as well as "new issues" such as "electronic- commerce, digital trade, investment, and subsidies."

Mexico's economy secretary Iidefonso Guajardo Villareal called for a review of the Single Undertaking on which the Doha Development Agenda (DDA) negotiations is based.

"The reality is that in past three ministerials, the Single Undertaking has been put aside," the Mexican economy secretary said.

"Consensus has been the leading factor and Single Undertaking should be reviewed," the Mexican economy secretary maintained.

The WTO must discuss internet services and manufacturing if it has to remain relevant to current developments.

"New ideas should come with proposals and framework," Villareal argued.

Russia sought to know whether members should continue with the Doha Round or adopt new approaches.

Indonesia said "heads of state must be involved as much as possible." The Indonesian minister Thomas Lembong said "Bali success was due to Obama who spoke to Indian PM Manmohan Singh."

Thailand called for "new issues such as e-commerce, SMEs, competition, investment."

Turkey said it will closely follow the progress on special safeguard mechanism for developing countries. Ankara urged progress in all Doha areas.

South Africa's trade minister Rob Davies reminded ministers that there are still significant divergences among members on the continuation of the DDA and new issues. Davies said the majority of members "wanted reaffirmation of DDA while others did not."

"Some wanted new issues and some members opposed," Davies argued. New issues, said Davies, are not yet ripe for negotiations. However, South Africa would not shy away from conversation, Davies pointed out.

Korea called for discussing new issues such as "e-commerce, small and medium enterprises (SMEs), global value chains (GVCs), and regulatory coherence on exploratory basis."

Lesotho, which is the coordinator for the African Group, said members must discuss concerns of those who seek to depart from the Doha mandate.

Lesotho pressed for "flexibilities of least-developed countries and developing countries based on the architecture of WTO Agreements."

China said members must pursue a "solidarity work program" to overcome divergences at the World Trade Organization.

The solidarity work program includes issues which are "very relevant new issues such as e-commerce and investment" while continuing work on the outstanding areas of agriculture, industrial goods, and services based on the Doha framework.

China's vice-minister for trade Mr Shouwen Wang said the solidarity work program would include two sets of issues.

He said the first set of issues will cover agriculture, market access for industrial goods, and services as well as the remaining issues based on the multilateral approaches in line with the Doha framework.

The second set of issues, said Mr Wang, cover "issues that are very relevant," particularly new issues such as electronic-commerce and investment with a multilateral approach. The solidarity work program will have a definite timeframe, the Chinese vice-minister said.

The US trade representative Ambassador Michael Froman cautioned against rushing prematurely into "work plans and deadlines."

The USTR said issues must develop organically and members must focus on revitalizing the WTO. Ambassador Froman said Members must not pursue rhetorical initiatives and instead, focus on "pragmatic initiatives" based on consultations with diverse groups of the private sector.

Canada's new international trade minister Ms Chrystia Freeland, however, said that for all the successes of Nairobi, members didn't live up to the full hopes of the Doha Round. She said it is time to do something on the Doha Round with fresh approaches.

In short, the US, the EU, and other developed countries along with their developing country allies are now preparing the ground for new issues and issue-based outcomes in the market access.

The stage is set for making a rupture with the DDA negotiations once and for all, said a developing country participant after the meeting. +