TWN Info Service on WTO and Trade Issues
28 September 2022
Third World Network
www.twn.my

Trade: G90 expresses alarm over disengagement on S&DT issues at WTO
Published in SUNS #9655 dated 28 September 2022

Geneva, 27 Sep (D. Ravi Kanth) — Amidst the worst food, financial, and fiscal crisis as well as controversial new industrial policy initiatives in the United States and the European Union among others, the Group of 90 developing and least-developed countries expressed grave alarm at the World Trade Organization on 23 September over continued “disengagement” by the major developed countries on improving special and differential treatment (S&DT) for realizing their development goals.

At a time when the WTO Director-General, Ms Ngozi Okonjo-Iweala, appears to be preoccupied with the non- mandated issues and on “costly” retreats on fisheries subsidies and climate change and sustainability, it is somewhat clear that issues concerning improvements in special and differential treatment provisions in various WTO agreements seem less important, said people familiar with the development.

In an informal restricted room document issued at the 57th meeting of the Doha Committee on Trade and Development (CTD) on 23 September, seen by the SUNS, the G90 members expressed their disappointment and unhappiness over the continued disengagement on ten Agreement-specific proposals for improving special and differential treatment provisions.

These countries said at a time when the gains made by most of their economies are being reversed because of the “poly crises,” there has been no constructive engagement by the major industrialized countries.

Worse still, the G90 countries said their “economies remain constrained in realizing equitable and meaningful gains from the “post-pandemic” recovery and in fully integrating into the global economy.”

These countries are now forced to “contend with external shocks such as rocketing inflation, and the food and energy crises, and balance of payment challenges, among a host of threats to their economic recovery and development aspirations.”

The global supply chains, which are concentrated in a few industrialized countries, have exposed the vulnerabilities and compounded the problems faced by the G90 countries, the paper suggested.

“This confluence of global economic shocks will disproportionately affect developing countries, including LDCs, for decades to come,” the G90 countries argued.

They said “the policy flexibilities envisaged in the G90 submissions to date are critical to address the “poly crises” in a sustainable and inclusive manner.”

“In the context of the current global economic climate characterized by multiple crises that threaten to reverse even the meagre gains that some developing economies had started to register pre-Covid-19, the exercise and objective to ensure that all Special and Differential Treatment (SDT) provisions are reviewed with a view to strengthening them and making them more precise, effective and operational remains not only relevant but all the more urgent.”

So far, the US has simply refused to engage on the G90’s ten Agreement-specific proposals, while the other major industrialized countries took “diversionary” positions to deny any improvements in their specific S&DT proposals, said people familiar with the development.

But it remains to be seen whether under the Biden Administration, the US stand will change for the better, said a trade official from a LDC country.

The G90 group argued that it has been “consistent in its call for mainstreaming development in the WTO by making implementable, the various vague SDT provisions; and clarifying the SDT provisions that have some potential to address the real difficulties that developing countries, including LDCs find themselves in and that continue to inhibit their access to and ability to deploy developmental policies to advance their economies.”

The G90 countries argued in their room document that “the policy space and flexibilities that the G90 seek are not foreign concepts, including to developed economies whose advances were on the back of similar policies geared towards building resilient value chains and in support of their own industrialization objectives.”

The group pointed to evidence that suggests “a growing use of policy tools that are deployed by especially developed countries, including the adoption of measures to promote industrial development, supply-chain resilience, among others, to address particular vulnerabilities.”

Against this backdrop, “delivering on the G90 proposals will ensure a meaningful and structured response by the WTO to provide policy space [that] developing countries, including LDCs need to respond to the crises and promote economic resilience.”

The group said that “the Ministers’ commitment at the Twelfth Session of the Ministerial Conference of the WTO (MC12) and an objective appreciation of the current global economic environment and its challenges provides an opportunity for WTO Members to frankly reflect on the efficacy of policy tools within WTO agreements and to ask the all-important question whether they are congruent with the commonly stated desire to ensure that “… trade be conducted with a view to raising standards of living, ensuring full employment, pursuing sustainable development of Members, and enhancing the means for doing so in a manner consistent with Members’ respective needs and concerns at different levels of economic development”.”

The improvements sought by the G90 coalition in the ten Agreement-specific proposals include:

1. Agreement on Trade-Related Investment Measures (TRIMs);
2. General Agreement on Tariffs and Trade, especially Article XVIII;
3. GATT Article XVIII for enabling developing countries in balance of payment (BoP) difficulties to take measures for their BoP problems;
4. To make operational and effective Article 9.2 and Article 10 of the Agreement on Sanitary and Phytosanitary measures (SPS);
5. Agreement on Technical Barriers to Trade (TBT) under which developed countries are being called on to provide at least a 180-day comment period to developing and least-developed countries;
6. Specific improvements in the Agreement on Subsidies and Countervailing Measures (ASCM) to enable industrialization programs in developing countries;
7. Agreement on Customs Valuation and Decision on minimum values;
8. 1979 Decision on differential and more favorable treatment, reciprocity and fuller participation of developing countries (Enabling Clause);
9. Article 66.2 of the TRIPS Agreement involving transfer of technology; and
10. Accessions.

Interestingly, the specific improvements sought by the G90 countries in the ASCM to enable them to undertake industrialization programs, are now being implemented by the United States and the European Union in the hundreds of billions of dollars that seemingly violate their commitments under this agreement, said a person, who asked not to be quoted.

The mid-term budget review issued by the DG says that “work on development issues in the Committee on Trade and Development (CTD) and its various incarnations has been steadily increasing since 2012, providing an important forum for discussion and action.”

According to the document, “on special and differential treatment (S&DT), negotiations in the CTD’s Special Session (CTD SS) led to the establishment, at MC9 in 2013, of a new subsidiary body of the CTD – the Dedicated Session on the Monitoring Mechanism on S&DT. Intense work in the CTD SS also took place in the run-up to the previous three Ministerial Conferences and can be expected to continue in the post-MC12 period on the basis of instructions given by Ministers.”

Yet, the DG’s priorities, according to the budget document, seem to zero in on the non-mandated issues such as digital trade, global value chains, trade and environment, and the controversial WTO reforms that allegedly seek to bring about differentiation among developing countries for availing of S&DT.

It is somewhat ironic that a DG, largely supported by developing countries on considerations of gender and the African continent, appears to have embraced wholeheartedly the trade agenda of the Northern countries, suggested several developing country trade envoys, who preferred not to be identified.

Nevertheless, the damage to the development-oriented issues raised by the developing countries appears to be done at a furious speed at the WTO headed by Ms Okonjo-Iweala, the trade envoys alluded.

ROADMAP

Based on the WTO’s 12th ministerial conference (MC12) guidance, as provided in paragraph 2 of the MC12 outcome document, the G90 countries urged the industrialized countries to resume negotiations without any delay.

“With a view to translating this mandate into concrete action, the G90 calls on the CTD-SS and Members to resume work and regular engagements through structured discussions in fulfillment of the commitment and expected outcomes of Ministers before MC13.”

They offered a roadmap to intensify the negotiations by suggesting that “at least 4 formal sessions of the CTD-SS should be called by the Chairperson with a view to report to the July 2023 General Council.”

It also proposed that at least one of these sessions be convened before the end of 2022.

“COSTLY” FISHERIES SUBSIDIES RETREAT

In a separate development, the DG is hosting a “costly” retreat at the Hilton Les-Evian-Bains Hotel in France on 10 October ostensibly for brainstorming on the “second wave” of negotiations on fisheries subsidies, despite severe resource constraints that has forced the DG to seek additional funds to the tune of CHF 15.25 million from members.

In a letter sent to members on 26 September, seen by the SUNS, the DG asked them to reflect on the following questions: (1) “In terms of substance, what is the scope of issues that should be addressed in the second wave of negotiations? What should be the starting point for these negotiations?”; (2) “In terms of process, what kind of Work Programme for the second wave of negotiations do you envisage, to fulfil the instructions in paragraph four of the MC12 Ministerial Decision on the Agreement on Fisheries Subsidies, to develop recommendations on outstanding issues by MC13?”

Everything at the WTO seems to have transformed into what renowned physicist Albert Einstein said about the dual nature of light, namely that it consists of both waves and particles, said a trade official, who asked not to be quoted.

In her letter, the DG said that “to create the enabling environment for brainstorming on these issues, delegations will discuss these topics in breakout sessions.”

She announced that several trade envoys of the “Friends of the System” are to conduct the brainstorming sessions.

They include Ambassador Ms Nadia Theodore of Canada, Ambassador Ms Clare Kelly of New Zealand, Ambassador Mr Petter Oleberg of Norway, Ambassador Mr Hung Seng Tan of Singapore, and Ambassador Dr Adamu Mohammed Abdulhamid of Nigeria, to oversee the brainstorming sessions.

The former Doha Rules negotiations chair, Ambassador Santiago Wills of Colombia, who has been made the Director of the WTO’s Council Division, and former secretary to the fisheries subsidies negotiations, John Finn of the WTO secretariat, will act as resource persons.

Lastly, the DG requested the participants “to prepare to bring maximum flexibility and openness to this retreat so that we can engage in a genuine “brainstorming mode”. For this, please refrain from bringing prepared statements. Please also note that Chatham House rules will apply.” +