2018 was a year of consultations and exploration at the WTO: Members tried to identify issues for which a consensus might be possible and which needed to be addressed to ensure that the WTO remains the central for global trade. While these discussions were useful and necessary, they did not lead to many indications in respect of the areas where consensus decisions might be reached. Nevertheless, the exercise has had the following results:
- all (or nearly all) Members agree that substantive decisions based on a consensus are required for the MC12 to ensure that the WTO continues to be considered as the place to negotiate and agree on the rules of international trade;
- in Astana, Members have to treat the issue of agriculture taking into account the priorities established by the Ministers in Buenos Aires (food security, cotton, SSM for developing countries and domestic support in general). At the same time, no concrete consensus decisions are on the horizon and there is little hope that the reform of the agricultural policies in the major trading countries is possible at this point in time;
- There is a general agreement that a consensus decision on fisheries subsidies is a must and should be within reach. Fisheries subsidies have been the only issue in which negotiation-like discussions took place in 2018 (mostly by the end of the year);
- Negotiations on trade-related aspects of e-commerce are starting after the signing of the Joint Statement on E-Commerce in Davos by 76 WTO Members;
- Other DDA issues have not led to much discussion yet. Exploratory discussions on Investment Facilitation and on MSMEs have been useful and may lead to a decision in Astana to start negotiations;
- A decision to start negotiations on a reform of the WTO -and some of its principles – is a distant, but important possible result for Astana:
- Realistically speaking there need to be – in addition to traditional statements on the importance of the WTO and an international trading system conducive to development – some concrete decisions in agriculture, e-commerce and on fisheries subsidies, if the MC12 is to lead to a revival of the negotiating function of the WTO. Some general agreement on the basic aspects of the WTO that should be tackled would be an important bonus for the revival of the negotiations. While an overall agreement on reform seems unlikely, a partial agreement on transparency, dispute settlement and negotiation objectives and methods may be a necessary to revive the multilateral trading system.
- Low Income Developing Countries (LIDCs) largely depend on the inclusive, multilateral system to defend their interests. They therefore need a positive outcome at the MC12 to ensure the relevance and survival of the WTO. Their objective for the MC12 may therefore be: (i) first and foremost, to ensure a pro-active and consensus – oriented way to decisions at the MC12 and (ii) that the development content of the DDA remains central to the work of the WTO.
Agriculture
Agriculture was and remains a major issue for LIDCs. While the discussions held up to now have been useful to understand the various objectives and red lines of the Members, they have not led to any indication of possible consensus decisions. The following conclusions may be drawn from the exchanges that have taken place:
- The present environment is not conducive to a major reform of agricultural policies in the Members. A reform of the AoA at the MC12 seems out of reach;
- The past approach to the agricultural negotiations has not led to consensus decisions and there is no reason to believe that it will do so in the future: new and innovative approaches are needed;
- Some concrete (even if partial) decisions on the issues defined by the Ministers in Buenos Aires is needed, if Astana is to be successful;
- Food security may well be accepted by all Members as a single overriding objective and a way for the WTO to contribute to the attainment of the SDGs,.
The Chair of the CoASS has defined the negotiation process for the coming months. He wants to start text-based negotiations in May 2019 and called for submissions by April. He indicated that those negotiations will use various submissions made by Members by then. It is most likely therefore that the submissions will define the direction of the negotiations.
- It therefore seems urgent that LIDCs submit their own ideas on how to negotiate and explain their objectives and constraints to the negotiation group;
- Any paper from the LIDCs may want to follow the following principles, to increase its impact: (i) avoid repeating old requests and referring to Ministerial “decisions” that are no longer acceptable to some Members, (ii) propose a new approach to the negotiations, one that takes into account the interest of all Members; (iii) respect the fact that any proposal that requires fundamental change in the agricultural polices of Members is very unlikely to lead to consensus decisions; (iv) any consensus decision that does not include concessions by basically all Members (with the possible exemption of LDCs) seems out of reach; (v) developed countries will not accept any commitments to reduce their domestic support, unless the emerging economies also accept limitations to their domestic support and / or increase market access; (vi) larger developing countries most probably will not agree to any reduction of their domestic support.
The possibility of a consensus decision on agricultural support / market access may largely depend on the outcome of the current bilateral negotiations between China and the USA, in which agriculture seems to be one of the important topics. If China offers the USA a guaranteed volume of exports in various agricultural products (trade /market sharing), any multilateral solution will become difficult; if they agree on systemic concessions, their bilateral deal might pave the way towards a multilateral solution.
Fisheries Subsidies
2019 is the year in which delivery in the Fisheries Subsidies negotiations is expected. As confirmed by RNG Chair in his recent stock-taking communication addressed to the TNC, Members are getting into the “full negotiating mode”. New drafts on the issues in the negotiations (overcapacity and overfishing; fishing on overfished stocks and the IUU fishing) are being prepared, with the first two – both devoted to the prohibition of fishing on the overfished stocks – already submitted during the February cluster, by Australia and New Zealand/ Iceland.
LIDCs have important stakes in the fisheries subsidies discussions, both on “offensive” and on “defensive” sides. They seek to protect their stocks from overexploitation by large fleets, often engaged in IUU fishing in their waters (IUU, overcapacity and overfishing). Meanwhile, they strive to safeguard policy space allowing them to develop their industrial fishing sector in the future (which might be limited in case stringent overcapacity disciplines would be applicable to them). While the disciplines related to overfished stocks could, in long run, be beneficial to the LIDCs, they would necessitate technical assistance and, likely, transitional periods for implementation. Besides, here, the presumption of overfishing with respect to the unassessed stocks, as well as the level of scientific and factual evidence required to be used for the purposes of the determination, should be approached with care, since it could result in an inability of the LIDCs to support their fishing communities in coastal areas, raising important social and food security concerns. Finally, it is important for LIDCs to make sure that the fisheries subsidies disciplines are enforceable, e.g. that the violation of the future agreement could be addressed by effective remedies.
While the LIDCs participate in the Fisheries Subsidies negotiations through negotiating groups (ACP, African and LDC groups), the focal points of which are active in all negotiating formats currently used (bilateral, open-ended consultations between members and groups, plenary sessions, etc.), more engagement from the individual Members both within the groups and during the RNG sessions would be desirable. This way special needs and concerns of the LIDCs could be better heard. LIDCs might also consider submitting textual proposals reflecting their interests on all or particular topics under consideration. Regional workshops to be organized by the WTO / ITTC in the Spring of 2019 should contribute to reinforcing awareness and understanding with respect to the technicalities of the topics in the capitals. These activities could later facilitate an efficient dialogue between the delegates and the capital-based officials as the negotiating pace speeds up in the Fall.
E-Commerce
After the signature of the Joint Statement on E-commerce in Davos, it seems that major trading partners will attempt to push towards an agreement on e-commerce by the MC12. Text-based negotiations are expected to start in May 2019. While the role of the WTO in e-commerce is controversial, there is a general consensus that multilateral rules in this field are important to show that the WTO is able to take into account changes in the global trading environment . While rules for the trade-related aspects of e-commerce, which take into account the special interests and constraints of LIDCs, are in principle of interest to LIDCs, the risks and challenges associated with such an agreement are numerous:
- The fact that the negotiations are plurilateral makes it possible that major trading nations will go ahead with an agreement that covers their interests, while neglecting those of LIDCs;
- The LIDCs are constrained in their capacity to negotiate: bigger trading nations already have experience with agreements covering e-commerce, e.g:. concluded in bilateral and regional fora, while LIDCs often lack a clear understanding of the impact of the proposed rules on their development;
- LIDCs have legitimate concerns about the threats posed by big technological companies, the lack of digital infrastructure and capacities as well as the effect of norms for data protection and privacy;
(iv) An accelerated negotiation process will tax the limited negotiating capacity of the LIDC delegations in Geneva. The danger that they will be “steamrolled” cannot be ignored.
- Last but not least, the LIDCs are (rightly) concerned that negotiations on e-commerce could move attention away from the DDA priorities in favor of issues of special interest to larger Members, thus leading to a neglect of the development objectives of the DDA, in particular in agriculture.
The participants in a potential plurilateral agreement have an interest in ensuring that such an agreement is part of the WTO’s legal framework and therefore have an interest that the agreement is included in Annex 4, a decision that, according to Art.X:9 of the WTO Agreement, requires support of all WTO Members.
LIDCs therefore might want to consider to:
- actively position themselves in the negotiations so as to ensure that the new rules would be responsive to their special interests and constraints;
- ensure that they benefit from the necessary support to engage in the negotiations and have access to studies analyzing the impact of any new rules on their development;
- make sure that an agreement on trade-related aspects of e-commerce is linked to the progress in agriculture and other themes of priority interest to them.
It is believed that the objectives listed above have the best chance to be achieve by:
- actively participating in the upcoming negotiations. Many participants in the plurilateral agreement would be very hesitant not to consider those interest, if they are clearly expressed and if LIDCs would agree to support the use of plurilateral agreements in such fields provided that it takes into account their interest- even if they are not (yet) able to adhere to such commitments;
- linking progress in those negotiations to a commitment to have concrete results in agriculture or any other topic of priority to the LIDCs;
- informing the signatories of the Joint Statement in Davos that LIDCs would be ready support inclusion of the plurilateral into Annex 4 of the WTO Agreement if the above-mentioned conditions are met.
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