WTO Ministerial: As Buenos Aires Negotiations Get into Gear, Road Ahead Remains Murky

12 December 2017

The second day of the WTO ministerial saw two high-level processes get into gear, as ministers began staking out their positions publicly in the plenaries, while talks on subject areas continued in facilitator-led groups, with few advances at this stage.

Monday kicked off with plenaries featuring statements from a host of countries, including many large economies, which laid out how they view the organisation’s future, and the wider opportunities and challenges facing multilateralism and trade.

The United States was one of the first speakers, with US Trade Representative Robert Lighthizer telling the audience that while the global trade club “is obviously an important institution” with various important roles, “serious challenges exist.”

The US official then outlined a series of areas that the current administration would like to see addressed, repeating previously stated concerns over transparency and notifications, the use of the dispute settlement system, the negotiations themselves, and how to address differing levels of development among countries. “Too often members seem to believe they can gain concessions through lawsuits that they could never get at the negotiating table,” he said.

Speeches from other major players throughout the morning reflected various concerns over the challenges facing the multilateral system in the current global context, along with flagging the continued divisions among members on traditional negotiating areas and newer ones which gained traction in recent years.

“We start this year’s ministerial conference with more questions than answers, and little sense of concrete progress over the past two years,” said EU Trade Commissioner Cecilia Malmström, also urging more openness to discussing new issues in the WTO context.

Indian Commerce and Industry Minister Suresh Prabhu also commented on the “new issues” debate, saying that “agreeing to these would be extremely divisive. Many of these issues are neither trade-related nor have these been discussed in detail.”

Others also stressed the importance of shoring up the multilateral system and openness. “Economic globalisation is an irreversible historical trend,” said Chinese Commerce Minister Zhong Shan. “We believe that no country can succeed in the world through isolation.” 

Separately, ministers from 44 countries issued a joint statement expressing their support for the multilateral trading system and concerns over the challenges currently facing the WTO. 

The statement recalls the WTO’s role in preserving the integrity of an open, rules-based multilateral trading system. The text also says members should use the ministerial as an opportunity to modernise the global trade club for today’s trading landscape.

Negotiating meetings underway

Monday also saw successive meetings convened by “minister-facilitators” on fisheries, agriculture, services and non-agricultural market access, e-commerce, and development, followed by meetings with ministerial conference chair Susana Malcorra and a heads of delegation meeting in the evening.

The subject-specific talks saw limited progress, officials say, with WTO Director-General Roberto Azevêdo and Malcorra both urging delegations this evening to be prepared to show more flexibility if the negotiations are to move forward in the limited time remaining.

Of the facilitator groups, the discussions on domestic regulation in services are not expected to yield a substantive outcome in Buenos Aires, with consultations to continue on future work. On development, sources said that today’s talks also struggled to make headway, with the proposals on special and differential treatment under discussion remaining controversial, including on whether these should differentiate among developing countries and whether members should instead start with a clean slate. 

On fisheries, there is much support for continuing work as outlined in the draft decision forwarded to the ministerial conference. Officials are still debating how to handle a possible interim article on disciplining subsidies to illegal, unreported, and unregulated (IUU) fishing, including how to address special and differential treatment. Another issue is how to keep momentum going in Geneva in the new year, potentially to get a final agreement in 2018 or 2019 and thus facilitate implementation by the UN target date of 2020.

On agriculture, limited progress was reported across the topics being discussed for possible substantive outcomes, such as public stockholding for food security purposes or transparency on export restrictions. Sources say the US had underscored the need for countries to be more transparent about current policies, a theme that has also emerged elsewhere, and referred to better notifications on agricultural domestic support as a precursor to further negotiations.

Sources told Bridges that Washington had tied progress on a permanent solution on public food stockholding to the talks on agricultural domestic support, which it had in turn also linked to market access. While some other countries have linked public stockholding to the domestic support issue, most countries have long said they do not consider market access to be a probable outcome from the Buenos Aires ministerial.

Some sources said they believed the US was making tactical linkages to issues that they knew were unlikely to be resolved during the conference to avoid making concessions in sensitive areas. Lighthizer is reportedly leaving the event early, though senior officials from his office will stay on until the end.

Malcorra also reported that some groups have asked for open-ended sessions on investment facilitation and micro, small, and medium-sized enterprises, and she confirmed that ministerial co-chairs will hold those on Tuesday. While another group asked for an open-ended, plurilateral one on e-commerce, she said she would wait to see how discussions go in the current facilitator group.

Looking ahead, Malcorra is due to convene discussions on Tuesday aiming to find common ground in drafting the ministerial declaration, a process which was put on hold in Geneva due to the objections of the US. The conference chair also told members that the open-ended process on subject-specific areas needed to be able to make some headway shortly, and has called another heads of delegation meeting during the early afternoon in Buenos Aires.

Fossil fuel subsidies reform group issues ministerial statement

Earlier in the day, 12 WTO members endorsed a ministerial statement on reforming fossil fuel subsidies, building on a growing political push by the “Friends of Fossil Fuel Reform” to develop synergies between trade policy tools and climate action. Backing the declaration are Chile, Costa Rica, Iceland, Liechtenstein, Mexico, Moldova, New Zealand, Norway, Samoa, Switzerland, the Separate Customs Territory of Taiwan, Penghu, Kinmen, and Matsu, and Uruguay.

The declaration was presented during the Trade and Sustainable Development Symposium (TSDS), a high-level conference being held in parallel with the ministerial and covering a host of topics relating to trade and sustainability objectives. (Editor’s note: The TSDS is organised by ICTSD, the publisher of Bridges.)

Countries aim “to advance discussion in the World Trade Organization aimed at achieving ambitious and effective disciplines on inefficient fossil fuel subsidies that encourage wasteful consumption, including through enhanced World Trade Organization transparency and reporting that will enable the evaluation of the trade and resource effects of fossil fuel subsidies programmes,” the declaration says.

It also flags the need for incorporating “the specific needs and conditions of developing countries and minimise the possible adverse impacts on their development.” Officials on hand at the launch repeatedly noted the challenges faced by communities more vulnerable to climate change, or who might otherwise be affected in the reform process, along with the potential role of trade.

“One of the reasons that we’ve been pushing this from a trade point of view is that it seems to us that trade and trade agreements are a pivotal way in which we can address these subsidies,” said David Parker, New Zealand’s Minister for Economic Development, Environment, and Trade and Export Growth. 

Vangelis Vitalis, New Zealand’s Deputy Secretary, Trade and Economic Group, Ministry of Foreign Affairs and Trade, explained that the group is interested in using WTO notifications, pursuing a more active use of the Trade Policy Review Mechanism (TPRM), using the organisation’s existing committee structure, and ultimately starting negotiations.

“That’s how you get real action,” he said, noting that the group will spend the next two-year cycle building a coalition of support to put this on the negotiating agenda for the next ministerial conference.

Investment facilitation declaration

Separately, various developed and developing economies announced a ministerial declaration on investment facilitation, one day after a high-level breakfast meeting among supporters. Around 60 WTO members are currently backing the move, counting the EU and its member states individually.

The coalition called for a “dedicated minister-level meeting” on the subject in Buenos Aires, and an open-ended meeting will now occur on Tuesday. They also urged that members approve a separate “draft ministerial decision on investment facilitation for development.”

The joint declaration came just one month after a high-level forum held in Abuja, Nigeria, which saw participants discuss how investment facilitation could support development in the African context, their interest in advancing the subject in the WTO framework, and the importance of scaling up investment flows to support the Sustainable Development Goals (SDGs). 

Supporting small businesses

A group of countries known as the “Friends of MSMEs” tabled a draft ministerial decision to establish a work programme for micro, small, and medium-sized enterprises (MSMEs) in the WTO today.

In addition, a joint ministerial declaration supported by 82 countries was circulated among members and called for the above-mentioned “dedicated minister-level meeting” on MSMEs during the ministerial conference and for the adoption of the ministerial decision.

The draft decision – a copy of which has been seen by Bridges – if adopted would establish a work programme for MSMEs, including measures aimed at making it easier for such enterprises to take part in international trade, such as through improved information on what is required and more predictable regulatory environments.

“We don’t want more bureaucracy; we want to emphasise the importance of the cross-cutting nature of MSMEs,” said Heraldo Muñoz, Chilean Foreign Minister and MSMEs Coordinator at the WTO, in a statement to reporters on Monday.

According to sources familiar with the ministerial-level meeting on the subject, some members encouraged countries which currently aren’t part of the “friends of MSMEs,” notably the African Group, to support the initiative. Additionally, several developed and developing country members emphasised the important role that these companies play in economies and development.

While stating a strong support in favour of the creation of a work programme for MSMEs in the WTO, the EU also pointed to the need to better articulate the reasons why rules are needed on this issues, according to one delegate familiar with the discussions.

ICTSD reporting.

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