Azevêdo Calls Upon WTO Members to Make 2015 a "Year to Remember"

11 December 2014

At the global trade body’s last General Council meeting of the year, WTO Director-General Roberto Azevêdo urged members to work on regaining their negotiating momentum going into 2015, following a tumultuous few months at the global trade body.

“2015 is going to be a big year for the WTO. We have important work to do and real deadlines to meet,” the WTO chief said on Wednesday, noting that the year will involve both the global trade body’s 20th anniversary and its tenth ministerial conference. “So let’s make sure it’s a year to remember.”

This week’s meeting came within two weeks of a special General Council on 27 November, which saw members agree on three draft decisions that resolved a months-long impasse over the implementation of the decisions reached last December at the Ninth Ministerial Conference in Bali, Indonesia. (See Bridges Weekly, 27 November 2014)

The November deal allowed, among other things, for WTO members to adopt the Protocol of Amendment that incorporated the Trade Facilitation Agreement into the global trade body’s legal framework. This step was key in allowing members to individually begin their own domestic ratification process, with two-thirds acceptance needed in order to bring the deal into force.

Hong Kong has already submitted its instrument of acceptance of the Trade Facilitation Protocol, Azevêdo confirmed on Wednesday, making it the first WTO member to do so. The WTO chief urged others to follow in its lead. Sources familiar with the meeting say that Switzerland has also begun its domestic procedures regarding ratification.

Originally, the deadline for ratifying the Trade Facilitation Agreement was 31 July of next year. However, that deadline was removed as part of the decisions taken at the 27 November General Council, leaving the ratification timeline open-ended.

From Bali to Nairobi

The WTO’s tenth ministerial conference – known as MC10 in trade shorthand – will be held in Nairobi, Kenya, after Turkey pulled out of its earlier bid. The dates are expected to be 15-18 December, members confirmed on Wednesday.

With the Kenya meeting now in their sights, the global trade body’s members will be spending the next several months putting together a work programme on how to resolve the remaining Doha Round issues – prioritising those that did not involve legally binding outcomes in Bali.

The deadline for outlining such a work programme had originally been December of this year, only to be sidelined over the earlier impasse on implementing the Bali decisions. The new deadline has now been set to July 2015, with Azevêdo telling members on Wednesday that the revised date “already looms large.”

The WTO chief has also urged delegations to avoid revisiting old talking points in the upcoming discussions, and instead to keep a series of key considerations in mind in the months ahead.

These include maintaining a “sense of urgency”; taking a “reasonable and pragmatic approach” with regards to substance; to have a deep level of engagement across delegations that includes regular contact with capitals; and ensuring that engagement also be “broad,” for instance by not allowing subjects outside the core topics of agriculture, non-agricultural market access, and services to fall by the wayside.

“Instead of trying to sequence our engagement, I think it is essential that we seek now to meaningfully engage across all of the issues and all of the negotiating groups,” Azevêdo said. “We need to be exploring issues and looking at options for progress in all of our negotiating areas so that we are ready in all of them as July gets closer.” 

Given the recent breakthrough on Bali implementation, “I think there’s a desire to move things forward,” one trade source commented to Bridges ahead of the General Council, while cautioning that “where there’s a will there’s not necessarily a way.”

Another noted that “July is quite close,” with others similarly warning in recent days that, should the work programme involve a modalities-type document, the July deadline might be a difficult one to meet. One of the main things that is unclear sources say, is what would be the structure of a work programme.

“Would it be a detailed mandate, an ‘early harvest’, or general guidelines on the rest of the Doha issues?” one delegate commented to Bridges, noting that there is still “no clarity” on what a work programme will eventually mean.

A series of meetings are set in the coming week to restart work on the post-Bali process, including the “special sessions” on Trade-Related Aspects of Intellectual Property (TRIPS), Non-Agricultural Market Access, Rules, and Trade and Environment.

The Committee on Agriculture’s Special Session already met last Thursday, with sources familiar with the meeting noting that things have not progressed too far since the last substantive discussions in July.

“I think for those who had forgotten the issues, and the positions of each other on those issues, that the meeting served a useful purpose, at least to bring us back to where we were, although I don’t think it’s really given us a clear indication of where we will go — that will need a significant change from where we are now,” said New Zealand Ambassador John Adank, who chairs the agriculture negotiations, in his closing statement to the 4 December meeting.

Notably, the Director-General has said that he plans to launch an informal Trade Negotiations Committee (TNC) process at the level of Heads of Delegation from 21 January onward, in the “Room W” style that was used in the run-up to the 2013 Bali Ministerial. There will also be regular TNC meetings, he added.

Sources have suggested that, despite the flurry of meetings set for the coming week, the real action may not begin until mid-January, around when the World Economic Forum’s Annual Meeting in the Swiss city of Davos-Klosters is set to occur.

ITA announcement imminent?

One of the big questions going into Wednesday’s meeting was whether a group of members negotiating to expand the product coverage of the WTO’s Information Technology Agreement (ITA) – a two decade-old pact eliminating tariffs on select information and communication products – would be able to announce a final deal.

The ITA is one of the few WTO agreements that does not cover the entire membership of the global trade body. Rather, only those participants that sign onto the pact are bound by its commitments, though the benefits are extended across all WTO members.

Within that group, a subset has been working for the past couple of years on outlining a revised list of products to add to the existing deal. The ITA has not been updated since it entered into force in 1997, and the revision of the product list has been geared toward reflecting new trade realities, such as the advent of new technologies and the decreased use of old ones. An updated coverage list, expansion proponents say, is key toward keeping the trade deal commercially relevant.

In recent weeks, participants of the ITA expansion effort have been racing to finalise the talks after the US and China announced that they had reached a breakthrough in November on the subject, following a year-long stalemate over which products to include in the revised list. (See Bridges Weekly, 13 November 2014)

While participants had expressed optimism going into the 4-10 December round of discussions, questions over whether an announcement would be possible at the General Council emerged on Tuesday after a reported disagreement between South Korea and Taiwan on the one side and China on the other over the exclusion of some items, such as flat-panel displays.

These were reportedly not included in the US-China deal announced last month, which sources said had created particular difficulties for Seoul, who has significant trading interests in these areas. Some other members had also had their own issues with the exclusion of some items, but agreed to accept them in order for a final deal to go through, sources said.

Bilateral and small group meetings were held all through Wednesday to try and resolve the disagreement in a way that all participants “can live with,” sources said, with a meeting of the whole expansion group set for that same evening after the General Council.

A final breakthrough had not been announced at the time of this writing on Thursday, though sources confirmed that the EU did raise the subject of the ITA expansion under the “other business” part of the General Council agenda, urging participants to make a final push.

Sources familiar with the talks noted that the original goal of presenting a deal at the General Council was not a binding deadline, though would have been a good opportunity to raise the issue. One noted that the negotiations do feel like they are “in the final phase,” with just a few remaining pieces left to fit in.

News of a deal could come tomorrow, sources said; otherwise, this negotiating round would likely end, and with talks potentially resuming again after the end-of-year break.

Members welcome Seychelles

Also on Wednesday, the African island nation of Seychelles moved one step closer to becoming the WTO’s 161st member, with the General Council signing off on the country’s terms of accession. Seychelles’ Minister of Finance, Trade and Investment Pierre Laporte came to Geneva for the occasion.

“For Seychelles, as it is the conclusion of a long and arduous accession process, and for the WTO, as the first non-least-developed African country to join the Organization after the grandfather clause,” Laporte said on Wednesday.

“The Seychelles Government and its people have been looking forward for so long to be part of this international family,” he added, noting the benefits it would bring to the economy of the small island developing state.

The Working Group tasked with the accession negotiations had finalised the draft terms in October; negotiations for Seychelles’ joining began in 1995. (See Bridges Weekly, 23 October 2014)

The accession terms must now be ratified domestically in order to complete the process, with the deadline set for 1 June 2015. The island country’s membership will then be formalised 30 days after it submits its instrument of ratification to the WTO.

ICTSD reporting.

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