The EU is playing a leading role in sustaining and reforming the WTO With just a few days to go until the 13th WTO Ministerial Conference, the overall state of play is complex. Replicating the success, the miracle, of MC12 in 2022 will be extremely challenging.
Today I will present the possible landing zones on the key files and an overview of the key players and our engagement strategy.
What is clear already now is that negotiations on the big-ticket items will go to the wire with fisheries, agriculture and the e-commerce moratorium. All this we expect to remain open until the final phase of the conference.
Negotiations on dispute settlement reform and potentially some parts of the outcome document will also be challenging.
I will start with the MC13 Ministerial Outcome Document, which is where key outcomes on trade and industrial policy, development and environment are being negotiated.
Securing ministerial approval to launch the deliberations on trade and industrial policy is one of the key priorities for the EU. The key issue here has been to marry our proposal, which seeks to set up a forum for discussion on trade and industrial policy, with the African Group desire to discuss WTO rules in the context of their goal of industrialisation.
The good news here is that we have struck a deal with the African Group. We will now seek support from the rest of the membership, notably the one on trade and environment and trade and transfer of technology. If this is confirmed, it would be an important achievement to get this issue agreed before the start of the Ministerial Conference.
The MC13 development package will also have several components. One will be on Least Developed Countries graduation – extending a number of existing LDC flexibilities to recently graduated countries (ex-LDCs) for a limited period of time. And a second potential component may relate to the G90 special and differential treatment (SDT) proposals in the field of Technical Barriers to Trade and SPS.
This is an issue strongly pushed by Dr Ngozi and some members of the African group. Despite the very limited time, we are still ready to engage to see whether there is scope to reach agreement based on best practices on the implementation of the SDT provisions in the agreement.
On Dispute Settlement reform, the Geneva-based discussions show progress, but it is not realistic to reach an acceptable landing zone on appeal at this stage. In the current circumstances, a reasonable outcome for MC13 would be a ministerial declaration containing the following elements:
- Preservation the progress achieved in the informal process, but no "early harvest".
- Identification of appeal review as an outstanding issue on which a solution must be found.
- A deadline to have a fully and well-functioning system as soon as possible.
- A political commitment to avoid appeals into the void, including by using appeal arbitration - so preserving the EU position on the right to appeal.
So we will strive to achieve an outcome that contains these elements. And we already started outreach on those ideas.
But we must keep in mind that it is not going to be easy.
Then, on fisheries subsidies:
The conclusion of phase 1 of the Fisheries Subsidies agreement at MC12 was a success for the WTO's sustainability agenda.
The EU was among the first who have accepted this agreement, but there is still no sign that the necessary two-thirds of WTO Members will do the same by MC13, so the phase 1 agreement is unlikely to enter into force at MC13.
And we are working now on agreeing on Phase 2 which is crucial for the credibility of the WTO.
One can expect there will be negotiations until the end in MC13. Just to be clear, the Commission is fully aware of the EU's interests on preserving the Common Fisheries Policy, access agreements and on fuel, and will clearly defend these positions.
On agriculture: this is probably going to be a key file at MC13.
Unfortunately, as is usually the case at a WTO ministerial, lack of agreement can block progress across the board.
Brazil says that without outcomes on agriculture, nothing will happen at MC13. On the other hand, India is taking a tough stance on the permanent solution to the public stockholding for food security purposes.
Finally, the WTO Director General is pushing for outcomes, in particular ones which could take into account the development angle.
As things stand today, there is an overall divergence in the views on agriculture, which makes substantial outcomes unlikely as evidenced by recent talks in Geneva. So we should be prepared for a hectic process at MC13.
Yet there is significant political pressure for results – and the EU is in the lead in the effort to broker compromises, including political guidance language to guide discussions up to MC14, as well as language on food security.
The EU is well positioned, thanks to our successive Common Agricultural Policy reforms. Most of our support under the CAP is classified as non-trade distorting WTO "green box" support. Maintaining the integrity of the Green Box is a key priority for the EU.
Indeed, environmental sustainability is key for us in the design of agricultural policies.
We are looking to have it reflected in the outcome document. A draft text on agriculture was circulated just over the weekend.
While it is a good basis, this text does require further work to get the balance right.
Then, on the e-commerce moratorium: one of the enduring successes of the WTO is how it has fostered trade in digital services through the so-called e-commerce moratorium.
The extension of the moratorium, which must be agreed at each ministerial conference, enjoys broader support now than at a comparable stage at MC12.
Yet, the prospects of stabilising the moratorium, or at least its extension at MC13 remain uncertain, as some WTO Members - notably India, Indonesia, Pakistan, and South Africa - have announced their opposition.
An important element contributing to the renewal of the moratorium will be the extension of an e-commerce work programme, which amongst other things focuses on tackling the digital divide in global trade, particularly with regard to developing members.
As in MC12, the extension will need to be played out at the Ministerial Conference itself. India and South Africa are the key Members for political outreach in order to have a successful MC13. I already spoke with both ministers last week to build consensus for MC13.
While India remains a challenging partner across the board, finding a way forward on fisheries subsidies [that India can present as consistent with protecting its livelihood fishermen and with developing its industry] will in itself be challenging; but even more so in combination with an outcome on public stock holding that is sufficiently positive, while falling short of the permanent solution that they are asking for, which is resisted by others such as the Cairns Group.
South Africa is the key member when it comes to the development package, and notably the policy space and industrial policies. As mentioned before, we have reached a deal with South Africa on policy space for industrialisation that could lead South Africa to play a constructive role in other key areas of the negotiations notably: agriculture, fisheries and the e-commerce moratorium.
China is also an important player on all files, and we encourage China to play a constructive role in negotiations on fisheries and agriculture. Work needs to be done to overcome differences on the mandate on trade and industrial policies.
Finding a way forward in agricultural reform will be necessary in talks with Brazil. Our interest and commitment to make progress on the reform of trade distorting agricultural support should be underlined. This would encourage Brazil to take a constructive position on the different MC13 files.
For the United States, the issue of dispute settlement reform is of course the main political sensitivity. We need therefore to be realistic on what can be achieved in MC13. On fisheries and e-commerce, we have an interest in keeping closely coordinated positions.
So to conclude: the EU is playing a leadership role in the run up to MC13, and will do so during the conference itself.
We will deploy every effort to make MC13 a success, despite the prospect of messy and unpredictable negotiations in Abu Dhabi.
I am confident that I can count on your help to convey our message that a successful Ministerial is crucial to show that WTO reform is back on track.
