WTO (Negotiations, Regular Work, Leadership)

East Africa Forum: An update on WTO Reform

During this informal meeting for East African trade negotiators, CUTS International Geneva presented the key elements and findings of a recent research study exploring the state of the WTO Reform debate. The study provides a snapshot of the current debate on WTO reform, and the main issues discussed therein. In particular, it analyses the key elements found in proposals by developed and developing members respectively, and suggests possible ways forward for the latter.

CUTS International, Geneva is implementing the project “Keeping Pace with Trade Development 2020”. The project aims to enable LDC and Smaller Developing Country WTO delegates to better take advantage of international trade for their development. It particularly supports their informed participation in WTO negotiations in the run-up to the 12th ministerial conference, including regarding joint statements on e-commerce and gender, while strengthening the links of Geneva missions with their capitals and private sector on the ground.

Julian Mukiibi, Assistant Director, CUTS International, Geneva welcomed all representatives, from beneficiary countries, present to this virtual meeting.

The main outcomes from a recent research study on “WTO Reform: Context, Main Issues and Possible Way Forward for Developing Countries” were presented. The current debate on WTO reform could be considered to have been set in motion by developed countries in 2018. However, calls by developing countries to reform the functioning of the WTO in an effort to address asymmetries and bring balance to the WTO rules, as well as to create more policy space for themselves to pursue development, are almost as old as the organisation itself.

While developed-country WTO Members’ calls for reform seemingly targeted developing countries for perceived non-compliance with their notification and transparency obligations and to differentiate between developing countries, developing countries’ response has been to frame their proposals wider so as to bring into the reform purview issues of particular interest to them, and shine a light on the multilateral trading system inequities and asymmetries developing countries argue are aligned in favour of developed countries.

The following six areas form the contours of the emerging reform agenda, based on proposals so far tabled: resolving crucial and urgent issues threatening the existence of the WTO; strengthening the deliberative, negotiating and rule-making function of the WTO; strengthening the WTO’s monitoring and transparency function; reforming WTO council and committee procedures; increasing the WTO’s relevance in global economic governance, and principles to guide the reform.

In the proposals so far on the table WTO Members congregate in agreement on the need to reform the WTO’s notification and transparency procedures, as well as the procedures of WTO councils and committees. No other area of the proposed reform seems to lend itself to the possibility of agreement amongst Members.

The reform discussions are already underway, but all over the place in the WTO councils and committees. Going towards MC12, it would be beneficial to the reform process for WTO Members to agree on a structured dialogue, including the scope, objectives and principles of the reform.

It is critical that members discussed why there is a lack of compliance with monitoring & transparency function, especially concerning the notifications’ obligations; as well as why councils and committees have not worked sufficiently. This could be explained by the lack of capacities of many developing countries and LDCs to be able to fully comply.

The floor was then opened for discussion among the participants. They agreed that the issue of Special & Differential Treatment (S&DT) is of common interest of all developing countries and LDCs, should hence be considered in the reform agenda, as a way for those countries’ interests to be safeguarded. It was moted that the current notification and transparency processes of the WTO can become very onerous for some developing countries. DDA issues should also be considered if the members decide to go ahead with the reform agenda (i.e. agriculture, SSM, cotton etc.).

As the most of the current issues proposed for reform (institutional issues, operational issues, differentiation) are not top priority for developing and least developed countries, participants admitted being confused about the approach to be taken. One option could be to leave the discussions (though they are most likely to be impacted by the decisions taken), or second option is to take part in the discussions and make sure they are development-oriented. If they chose the latter option, the groups need to discuss those issues extensively, issue by issue, to look at potential implications and what should be their positions to benefit from the reform.

Participants also expressed the need to restore the deliberative function of WTO as one of the core reasons why members are pushing for the reform and especially a way to rationalize the JSIs (i.e. allowing members to have different ways to consult beside the traditional ways of negotiation). CUTS has published a paper several years ago on plurilaterals, which could be quite informative for delegates in that context. It issue can be accessed HERE.

One more forum meeting is expected to take place by the end of the year, that will be looking at COVID-19 impacts and e-commerce. The issue of institutional reform could be on the agenda of another forum, closer to MC12, to discuss again the proposals on the table, the issues at stake for developing countries and LDCs, and how their interests can be best safeguarded.