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TWN Info Service on WTO and Trade Issues
20 July 2020
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Moldovan, Korean & Kenyan DG candidates tout their “specific skills”
Published in SUNS #9163 dated 20 July 2020

Geneva, 17 Jul (D. Ravi Kanth) – The candidates from Moldova, South Korea, and Kenya that are seeking the post of WTO Director-General to replace the current incumbent Roberto Azevedo have claimed that they have specific skills to turn the trade body around from the current cycle of chronic illnesses plaguing it.

At a special General Council (GC) meeting on 16 July, the three candidates – Mr Tudor Ulianovschi from Moldova, Ms Yoo Myung-hee from Korea, and Ms Amina C. Mohamed from Kenya – claimed that they have a specific set of skills to bring to the organization in order to address the systemic crises in the three pillars of the WTO, said trade envoys, who asked not to be quoted.

The three candidates said they will re-energize the negotiating function of the WTO, resolve the crisis at the Dispute Settlement Body (DSB), and work towards enhanced transparency and notification requirements, said a trade envoy, who asked not to be quoted.

Although the three candidates supported the issue of special and differential treatment (S&DT) on grounds that it is a core principle of the WTO, they chose to give differing and somewhat ambiguous answers on the applicability of S&DT in the current and future trade negotiations.

The three candidates more or less appeared to toe the line of the developed countries, particularly the US, in insisting that a special examination is needed in terms of how S&DT can be factored in the negotiations, the trade envoy said.

The three candidates made it clear that they will accelerate work on the five plurilateral Joint Statement Initiatives (JSIs) on electronic commerce, investment facilitation, disciplines for MSMEs (micro, small, and medium enterprises), trade and gender, and domestic regulation in services, the trade envoy said.

The three candidates mentioned the Doha Development Agenda (DDA) trade negotiations only when asked by South Africa, India, and a few other developing countries.

Even though the plurilateral JSIs were not mandated by ministers at the WTO’s eleventh ministerial meeting (MC11) in Buenos Aires, Argentina, in December 2017, the three candidates chose to give primacy to the plurilateral initiatives over the multilateral DDA negotiations, the trade envoy said.

The three candidates also spoke about the need to conclude work on fisheries subsidies at the WTO’s 12th ministerial conference (MC12) in Nur Sultan, Kazakhstan, next year.

The three candidates said their main priority is to address the crisis at the dispute settlement system. They asserted that they will address the growing “trust deficit” at the trade body.

Moldova’s former minister and ambassador to the WTO Mr Tudor Ulianovschi claimed that his role, if elected as DG, will be one of “honest broker” among members.

He said his main priority is to “re-invigorate” the WTO, specifically in the period of the Covid-19 pandemic.

Mr Ulianovschi said he has developed “a network of technical negotiators, who are consensus building and result oriented experts,” that would strive to bring some immediate wins to restore the credibility in the organization.

Korea’s current trade minister Ms Yoo Myung-hee emphasized that her main goal “is to make the WTO more relevant, resilient, and responsive”.

The WTO needs to rapidly change in the face of unfolding economic circumstances to remain relevant, she said, according to trade envoys present at the meeting.

It needs to enhance sustainability and inclusiveness to remain resilient as a champion of open trade for the next 25 years and beyond, the Korean minister said.

More importantly, the “WTO needs to be more responsive to global challenges and contingencies for the benefit of all of its Members,” she told members, according to trade envoys present at the meeting.

Kenya’s former foreign minister and the WTO’s General Council Chair in 2005 Ms Amina C Mohamed touted repeatedly about her long record of successes spanning from the amendment to the TRIPS Agreement to the successful conclusion of the WTO’s tenth ministerial conference in Nairobi, Kenya, in December 2010.

Ms Mohamed’s three main themes for turning the page in the derailed WTO at this juncture are “reform, recovery, and renewal”, said trade envoys.

Ms Mohamed repeatedly spoke about the need for urgent reforms at the WTO but she did not elaborate on the details as to what would constitute reforms.

Ms Mohamed argued that reforms are needed for sustainable development, for developing the capacity to negotiate, and for resolving the crisis at the “compromised” dispute settlement system.

The three candidates claimed that their main priority is to address the crises at the DSB, particularly the Appellate Body (AB).

On fisheries subsidies, the three candidates offered differing views.

Mr Ulianovschi said that the text on fisheries subsidies must be finalized at the WTO’s 12th ministerial conference.

Ms Yoo Myung-hee highlighted the need for concluding the fisheries subsidies agreement at MC12 to raise the credibility of the trade body.

Ms Mohamed emphasized that the agreement on fisheries subsidies at MC12 must include two boxes – the trade box and the development box.

On the divisive issue of differentiation among developing countries, the three candidates said that special and differential treatment is a core principle but its application has to be decided by members due to changes in the global trading system.

As regards the unresolved Doha Development Agenda (DDA) negotiations, the three candidates chose not to say much while arguing that some “aspects” of the DDA must be addressed.

Q&As

During the questions-and-answers session, Mr Ulianovschi said the role of the DG is to listen to members’ views before deciding any concrete steps for addressing them.

To a question from Estonia on how S&DT should be factored in the negotiations, he replied that “S&DT is the fundamental principle of the organization” but its applicability can be discussed.

Asked how he would resolve the bilateral trade tensions between the US and China, he said that the role of the Director-General is to be an honest broker in resolving trade tensions.

The US trade envoy Ambassador Dennis Shea asked the Moldovan candidate about his views on the multi-party interim appeal arbitration arrangement (MPIA) notified by the European Union and China and whether it recreates the flawed Appellate Body and exacerbates several problems created by the AB.

In reply, Mr Ulianovschi emphasized that a solution must be found to the impasse at the dispute settlement system, suggesting that the MPIA is a stop-gap arrangement in the absence of the Appellate Body.

He said it is in Article 25 of the Dispute Settlement Understanding. “The core problem is to find a solution to the AB on a priority basis,” Mr Ulianovschi said.

Switzerland sought to know from Mr Ulianovschi about the continuing debate on the moratorium on customs duties on electronic transmissions and whether it should be extended for a further two years with conditions or that the moratorium be made permanent.

In reply, the former Moldovan minister said that he is aware of the ongoing discussions on the moratorium, suggesting that it is an issue that members need to resolve.

South Africa asked the Moldovan candidate how he intends to conclude the Doha Development Agenda negotiations.

He replied that some aspects concerning domestic support and a permanent solution for public stockholding programs for food security and the special safeguard mechanism can be addressed without delay.

During the Q&A with the Korean candidate, Ms Yoo Myung-hee emphasized that “the MC12 will be a critical milestone of Members’ ability to deliver results and set the agenda for the future.”

She said that “the new Director-General must help make it a success in order to build trust in the WTO.”

The Korean minister argued that “electronic commerce is also an area in which we should work towards tangible outcomes,” suggesting that “the COVID-19 pandemic has highlighted the importance of this issue.”

She said a “comprehensive agreement” in “electronic commerce by next summer may be ambitious, but I think we can take some concrete steps and lay out the path forward for post-MC12 work.”

Her second priority is WTO reforms in which all three pillars of the WTO – the negotiating function, the dispute settlement system, and the WTO secretariat – “need to work hand-in-hand to maintain a healthy and well- functioning multilateral trading system.”

“Progress at MC12 will show that the WTO can address the real world problems that societies and businesses face,” Ms Myung-hee argued.

In a question raised by India about the importance of pursuing multilateral trade initiatives instead of bilateral and plurilateral agreements, Ms Myung-hee emphasized that she accords primacy to the multilateral initiatives over both bilateral and plurilateral initiatives.

As regards the gap in the WTO rule book in the Agreement on Subsidies and Countervailing Measures and the need to create a level playing field, the Korean minister said the WTO rules are meant to provide a fair leveling field and if there are any issues then members can address them.

KENYA’S CANDIDATE

When asked about the gap in the WTO rule book concerning the level playing field, Ms Amina C Mohamed said “the rule book needs to be filled by the members, and not by the DG,” adding that the “DG would be supportive provided that there is an enabling environment.”

Mali, one of the four cotton producing countries along with Benin, Burkina Faso, and Chad, asked the Kenyan candidate why the cotton problem has not been resolved since 2003.

Ms Mohamed said the cotton problem could not be resolved because it got linked with the overall question of domestic support, which remains unaddressed until now.

She said the unresolved issues in agriculture, particularly domestic support for public stockholding programs for food security (PSH) and the special safeguard mechanism (SSM) for developing countries must be addressed “without drawing any red lines in the sand”.

However, Ms Mohamed had remained silent at the Nairobi ministerial meeting on these three issues – cotton, PSH, and SSM – because of opposition from the US, said a trade envoy, who asked not to be quoted.

Nevertheless, the Kenyan minister said that agricultural issues are her priority issues for MC12.

India sought to know about the revival of the DDA negotiations that have remained dormant since the Nairobi ministerial meeting.

Ms Mohamed acknowledged that not much has happened in the DDA negotiations except in export subsidies.

She spoke a great deal about the plurilateral Joint Statement Initiatives as though they are multilaterally mandated, said another trade envoy, who asked not to be quoted.

South Africa asked how access to vaccines can be ensured in the face of the catastrophic Covid-19 crisis.

Ms Mohamed said she had worked on the TRIPS amendment to ensure access to medicines for HIV/AIDS.

“Now if we are able to do this in the vaccines, and it can be possible if members come together to support access – it is a moral issue,” she said.

However, the TRIPS amendment for addressing the pandemics could not be used because of the stringent conditions, the trade envoy said.

The US sought to know from the Kenyan candidate about the alleged pervasive breaches created by the AB, particularly over-reaching by adjudicators.

Ms Mohamed said, “I think we need to go back to the basics and the DSU says clearly that it does not allow over-reach or precedents that would diminish the rights and obligations.”

She said repeatedly that we must reform the Dispute Settlement Body to instill confidence and bring credibility to the two-stage dispute settlement system.

 

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