[Updated on August 27 to incorporate comments by Amb. Tudor Ulianovschi of Moldova at a WITA webinar held on August 26.]
The eight candidates for the position of Director-General of the World Trade Organization, in looking at what topics should be moved forward or completed in negotiations were uniformly in support of an early conclusion to the negotiations on fisheries subsidies and on updating the rule book by moving the plurilateral negotiations on e-commerce/digital trade forward to at least a draft document by the twelfth WTO Ministerial Conference in 2021.
Background on fisheries subsidies
Fisheries subsidies have been subject to negotiation within the WTO since the launch of the Doha Development Agenda in December 2001 with limited forward movement in recent years. With the world’s wild caught supply of fish under severe pressure from overfishing, curbing illegal fishing and overfishing through subsidy disciplines became part of the UN’s Sustainable Development Goals in 2015 (Goal 14.6)(SDG). This led WTO Members at the eleventh Ministerial Conference in Buenos Aires to commit to completing the negotiations on fisheries subsidies by the twelfth Ministerial Conference which was scheduled for early June 2020 to permit completion within the time frame laid out in the UN SDG. With the COVID-19 pandemic and the lockdown in Geneva and in many countries, the time frame for completing the fisheries subsidies has slipped, although in late June, the Chair of the Rules Negotiating Group released a draft consolidated text to permit Members to see if a final push to complete negotiations could be made possibly yet in 2020. I have reviewed the fisheries subsidies in a number of prior posts. See, e.g., June 29, 2020, Update on fisheries subsidies draft consolidated text from June 25, https://currentthoughtsontrade.com/2020/06/29/update-on-fisheries-subsidies-draft-consolidated-text-from-june-25/; June 27, 2020, Chair of Rules Negotiating Group releases draft consolidated fisheries subsidies text at informal meeting on June 25, https://currentthoughtsontrade.com/2020/06/27/chair-of-rules-negotiating-group-releases-draft-consolidated-fisheries-subsidies-text-at-informal-meeting-on-june-25/; January 13, 2020, Fisheries Subsidies – Will the WTO Members Reach Agreement Before June 2020? https://currentthoughtsontrade.com/2020/01/13/fisheries-subsidies-will-the-wto-members-reach-agreement-before-june-2020/.
Background on electronic commerce/digit trade
The agenda for the Uruguay Round was established in 1986 with negotiations completed in 1993 and the agreements that created the WTO signed in 1994. At that time, there was little electronic commerce. The driver of world economic growth over the last twenty-five years has increasingly been the rapidly developing technology that permits large amounts of communication and business activity to occur electronically. Music, movies, television, books, magazines have largely gone digital. Consumer purchases of goods and services have increasingly been done digitally. During the COVID-19 pandemic much of the world has depended on electronic communications to buy groceries, handle some medical needs, eliminate in person meetings replaced by virtual meetings and much more.
While the WTO as early as the second Ministerial Conference in 1998 agreed to study issues surrounding electronic commerce to develop rules that might be necessary, the WTO’s efforts have struggled for more than twenty years with periodic agreement to continue the review and extend a moratorium on customs duties on electronic commerce. See, e.g., Work Programme on Electronic Commerce, adopted by the General Council on 25 September 1998, WT/L/274 (30 Sept. 1998); Work Programme on Electronic Commerce, Ministerial Decision of 13 December 2017, WT/Min(17)/65, WT/L/1032 (18 December 2017). These two documents are embedded below.
274 65At the eleventh Ministerial Conference in Buenos Aires, WTO Members with an interest in particular issues issued Joint Statement Initiatives basically indicating that the group of listed Members were going to move forward developing potential rules on the subject matter of interest, keeping the process open to any Member wishing to participate. One of the Joint Statements was on Electronic Commerce. See JOINT STATEMENT ON ELECTRONIC COMMERCE, WT/MIN(17)/60 (13 December 2017). The statement is embedded below.
60The JSI on e-commerce has been making good progress under the leadership of Australia, Japan and Singapore. A review of progress from the March 5 General Council meeting minutes is copied below (WT/GC/M/182 at 117):
“47. Australia (Joint Statement Initiative on Electronic Commerce)
“I will first provide a report on negotiations under the Joint Statement Initiative on Electronic Commerce on behalf of the co-convenors: Australia, Japan and Singapore.
“I will start with a short summary of the informal meeting of Ministers on the Ecommerce JSI held in Davos on 24 January.
“At this meeting, Ministers underscored the importance of this initiative both commercially and systemically for the WTO and affirmed their commitment to a high standard outcome, with the participation of as many WTO members as possible.
“Ministers welcomed the good progress achieved over the first year of negotiations, including the range of proposals received, the diversity and growing number of participants, and the strong levels of engagement in negotiating rounds.
“Ministers emphasized the need to keep working hard to ensure substantial progress by MC12 and agreed to develop a consolidated negotiating text by MC12 and a pathway for the future conclusion of the negotiations.
“The Philippines also announced it would join the JSI, bringing the number of signatories to 83, representing over 90% of global trade.
“Since our last report at the December HODS/TNC, we have held an organisational meeting, on 16 December, that set a work plan leading up to MC12.
“We also convened a negotiating round from 11-14 February, which covered electronic transactions, non-discrimination and liability, consumer protection, transparency, domestic regulation, cooperation and telecommunications. These negotiations were structured around revised streamlined texts drawn from proposals made by Members, and made further progress on streamlining text.
“Two more rounds are scheduled before MC12: 17-20 March and 28 April-1 May.
“We look forward to a continuation of the constructive engagement and momentum demonstrated in February with the aim of developing a consolidated negotiating text by MC12.
“The co-convenors continue to ensure this JSI is transparent and inclusive: meetings are open to all WTO Members; and all proposals and reports are available on the WTO’s web portal.”
The JSI group had hoped to have a consolidated draft text by the 12th Ministerial Conference in June this year before the Ministerial Conference was cancelled because of the pandemic. While the COVID-19 pandemic has slowed down progress for a few months, the joint convenors (Australia, Japan and Singapore) remain confident that a draft agreement can be achieved with a roadmap for completion by the 2021 Ministerial. Most documents generated by the JSI group are not publicly available. However, the titles of documents are available publicly. As of August 21, 70 documents are listed as having been submitted by Members on the JSI on electronic commerce. The most recent document is dated August 19 and is titled a “Stocktake text” (INF/ECOM/57). A July 23 document is titled “Facilitator’s note – Services Market Access — List of Proponents’ sectors of interest”).
Statements by the eight candidates seeking to become the next WTO Director-General
What follows are excerpts from candidates’ prepared statements to the General Council, my notes of their responses to questions at their press conferences following meeting with the General Council, and my notes on their comments at webinars hosted by the Washington International Trade Association (WITA) and the Asia Society Policy Institute.
Dr. Jesus Seade Kuri (Mexico)
In his prepared statement to the General Council on July 15, Dr. Seade listed completion of the fisheries subsidies negotiations as an issue to be resolved in the first 100 days of his becoming Director-General. The Joint Statement Initiative (JSI) on E-commerce was one of a number of JSIs announced at the 11th Ministerial Confernce in Buenos Aires in 2017. Dr. Seade included all JSIs as areas where he would be expecting concrete results by June 2021.
“1. Within the first hundred days: I will work closely with
members in seeking to i. reach agreement on fisheries subsidies.” (Google translation from French).
“2. Second horizon, towards our MC12 conference, and aware of the fact that its date is not yet fixed, it is important that we look for concrete results
by June 2.021, both in joint initiatives and in issues that aim to give us a more transparent and effective WTO.” (Google translation from French).
At his press conference on July 15 after his meeting with the General Council, Dr. Seade was not asked any questions about the fisheries subsidies negotiations or about the e-commerce JSI.
WITA had a webinar with Dr. Seade on July 7. https://www.wita.org/event-videos/conversation-with-wto-dg-candidate-seade/. During the webinar, Dr. Seade was not asked specifically about either the fisheries subsidies negotiations or about the Joint Statement Initiative on E-commerce. However, he was asked a question on whether, if he was selected as the next Director-General, he would encourage plurilateral negotiations. All of the JSIs are plurilateral negotiations open to any Member who wishes to join. Below are my notes on the question asked and Dr. Seade’s response on plurilaterals.
Q: On the role of plurilaterals in the WTO, would you encourage their use if you are selected as the next Director-eneral?
A: On plurilaterals, Dr. Seade tries to take a pragmatic and historic approach. Looking at the history of the multilateral trading system, the Tokyo Round created a host of plurilaterals which were powerful to create rules that were accepted by many of the most important countries on a range of subjects (AD, Subsidies) — the so-called Tokyo Round Codes. It was a great way to move the process of liberalization forward. In Dr. Seade’s view, the great achievement in the Uruguay Round was to move to substantively universal rules (agriculture and textiles which had previously been outside of GATT rules were brought inside; the Tokyo Round Codes moved to Agreements applicable to all). The Uruguay Round was possible because there were huge inducements for developing countries to accept services, TRIPs in exchange for textiles and agriculture liberalization. However, the negotiating environment has changed. It is no longer possible to get liberalization through negotiations just betweenthe U.S. and the EU where the results are then accepted by others (e.g., agriculture). Now negotiations need to include China, India and others who need to be part and where large differences in objectives may make multilateral negotiations more difficult. Therefore the WTO needs plurilaterals to permit forward movement. However, the WTO and its Members need to work largely on the basis that any benefits from plurilaterals will be provided to all Members and that the agreement is open to any Member to join later if desired. In Dr. Seade’s view, if the WTO doesn’t allow use of plurilaterals, progress at the WTO will stop.
Dr. Ngozi Okonjo-Iweala (Nigeria)
Dr. Okonjo-Iweala mentions both concluding the fisheries subsidies negotiations and updating the WTO rules to include rules on e-commerce. She adds the need to bridge the digital divide so that any such rules will have broader application and broader input.
“The WTO appears paralysed at a time when its rule book would greatly benefit from an update to 21st century issues such as e-commerce and the digital economy, the green and circular economies. Issues of women and trade and Micro Small and Medium Enterprises (MSMEs) are important to ensure greater inclusion. Bridging the digital divide to enable Least Developed Countries and other developing countries to participate will be key.”
“My vision is also of a rejuvenated and strengthened WTO that will be confident to tackle effectively ongoing issues such as the fisheries negotiations. With political will, outstanding issues of subsidies that lead to overfishing and unsustainable fishing can be concluded.”
“A rejuvenated WTO must also take on fresh challenges, such as ensuring optimal complementarity between trade and the environment and ensuring that WTO rules best respond to the realities of e-commerce and the opportunities and challenges of the digital economy.”
“Should I be elected, I would work with Members to prioritize delivering a successful MC12 with good outcomes on fisheries, agriculture and other areas. I would also prioritize updating the rulebook * * *.”
During the press conference on July 15 after her meeting with the General Council, Dr. Okonjo-Iweala was asked a question on what progress in negotiations was achievable by the next Ministerial Conference and was also asked a question on how she would work towards ensuring a successful outcome on e-commerce negotiations. My notes on her responses to those questions follow.
On the question of what is achievable by the next Ministerial in 2021 and whether it is best to go after issues one at a time or in a larger grouping, Dr. Okonjo-Iweala indicated that she hoped the WTO Membership would make a decision soon on who should be Director-General so whoever is selected has more time before the next Ministerial. But even if a decision is not made until November 2020, there are some areas that could be ready by the next Ministerial. For example, a fisheries subsidies agreement should be achievable. There was a lot of discussion in the General Council on trust and building trust to move negotiations along. Trust is obviously an important issue. So the WTO may need to sequence issues to build trust by achieving a win or two. Once there are some successes, it should be possible to handle more issues in parallel.
The question on what Dr. Okonjo-Iweala would do as Director-General to see that an agreement on e-commerce was pursued was answered by noting that there was extensive work being done plurilaterally by many Members as one of a number of joint statement initiatives. Dr. Okonjo-Iweala agrees that an agreement on e-commerce is very important, but she notes that there is a digital divide where many poorer countries don’t have the infrastructure to take advantage of e-commerce. The WTO, working with other multilateral organizations, needs to see that resources are put together to help countries address the digital divide. Once the digital divide is addressed, all Members should want to and be able to participate in the e-commerce negotiations, so that the agreement becomes a multilateral one.
WITA had a webinar with Dr. Ngozi Okonjo-Iweala on July 21. https://www.wita.org/event-videos/conversation-with-wto-dg-candidate-dr-ngozi-okonjo-iweala/. During the webinar, Dr. Okonjo-Iweala made an opening statement in which she reviewed the need to generate some early wins for the WTO at the 12th Ministerial Conference including both fisheries subsidies and e-commerce. Dr. Okonjo-Iweala was also asked speciically about e-commerce and digital trade and how to move those talks forward. Below are my notes on those portions of the webinar.
Dr. Okonjo-Iweala stated that the WTO is really at a critical moment, an existential crisis. She believes that something needs to be done to give a lift to the organization. Dr. Okonjo-Iweala would focus as Director-General on the next Ministerial Conference and what wins could be obtained at the Conference. She believes that concluding the fisheries subsidies negotiations with its issues of overcapacity and overfishing should be pursued and could be concluded even before the Ministerial Conference.
Dr. Okonjo-Iweala also believes that the WTO must update the rule book to cover 21st century issues. As she has noted, the digital economy is driving the world during the COVID-19 pandemic and is of great importance to many Members. Dr. Okonjo-Iweala believes that the WTO needs to develop rules for e-commerce as e-commerce is the future of much of trade. At the same time, the WTO must address the digital divide so participation and benefits are available to all.
Q: On e-commerce and digital trade, how do you see rules being developed? Should the rules be based on the historic principles of the WTO?
A: Dr. Okonjo-Iweala believes that ecommerce and digital trade are very important topics. The WTO must ensure two things. First, traditional WTO principles should apply (non-discrimination, etc.). She believes that it would be important to get many more countries to join the talks. Stated differently, Dr. Okonjo-Iweala believes the WTO should always prefer a multilateral negotiation and agreement. However, sometimes plurilaterals are needed to make progress. Second, the WTO working with other organizations needs to address the digital divide. In Dr. Okonjo-Iweala’s view, the fact that many developing countries are not participating flows from the fact that they don’t have the infrastructure to engage in e-commerce to a significant extent and hence neither participate in the talks nor gain benefits. This is the digital divide. WTO is not a financial institution, so the WTO needs to team with other organizations to help developing countries overcome the digital divide which will permit these Members to then participate in the negotiations. Dr. Okonjo-Iweala also believes that the level of commitments under an e-commerce agreement will need to vary based on the ability of Members to accept obligations and to contribute.
Mr. Abdel-Hamid Mamdouh (Egypt)
Mr. Mamdouh’s prepared statement to the General Council on July 15 identified both fisheries subsidies and the various Joint Statement Initiatives, including e-commerce, as priorities for movement by the 12th Ministerial Conference (MC12).
“For the immediate future, we need to set clear priorities. MC12 is around the corner and it needs to be a turning point in the direction of the WTO and take it on a different path towards ‘positive territory’. I believe we need to do two things: 1) agree on a reform agenda and 2) achieve concrete progress on issues currently under negotiation.
“On current negotiating subjects, fisheries subsidies come first as the one item expected to be concluded by the end of 2020. It is crucial for our future to have a successful conclusion of the fisheries subsidies negotiations.
“There are also the Joint Statement Initiatives on e-commerce, domestic regulation in services, MSMEs and investment facilitation. These initiatives address pressing issues of importance to many Members and pause new challenges.”
During Mr. Mamdouh’s press conference after his meeting with the General Council, he was asked one question about the agenda for the twelfth Ministerial Conference which resulted in an answer that included pursuing completion of the fisheries subsidies agreement and work on the Joint Statement Initiatives. My notes on Mr. Mamdouh’s response is provided below.
Mr. Mamdouh was asked if there will be enough time to prepare for the next Ministerial to have a positive agenda/outcome. He answered that if the selection process concludes before November, there should be sufficient time. In his view, the next Ministerial needs to be a turning point for the WTO. At MC12, the WTO must have a clear agenda for reform. There is not currently a mainstream focus on reform; issues are being raised ad hoc. Second, the WTO needs to score successes – fisheries subsidies and progress on joint statement initiatives are the likely areas for success.
WITA had a webinar with Mr. Mamdouh on June 23. https://www.wita.org/event-videos/conversation-candidate-hamid-mamdouh/. During the webinar, Mr. Mamdouh was asked a question about e-commerce and was also asked his views on plurilaterals and whether he would support their use if he becomes the next Director-General. As all of the Joint Statement Initiatives involve plurilateral negotiations, the question applies to e-commerce along with the other JSIs. Below are my notes on the questions and Mr. Mamdouh’s responses.
Q: U.S. has raised various issues of importance to them. How do you see elements of a reform agenda getting U.S. support if U.S. concerns are not addressed or included in the agenda?
A: Mr. Mamdouh indicated that U.S. concerns were being examined at the WTO. He took e-commerce as an example. Looking at the e-commerce agenda at the WTO, Mr. Mamdouh is of the view that there needs to be discussions that haven’t taken place at the WTO in a very long time. Trade issues today are of increased complexity where issues of increased trade liberalization are juxtaposed with regulatory interests. E-commerce/digital trade has a slew of legitimate regulatory issues where Members can have very different perspectives. Examples would include privacy policies, cyber security, localization among others. In Mr. Mamdouh’s view, these regulatory policy issues are both legitimate and of different importance to different Members. So the question arises as to how new rules deal with these diversities of Member needs while ensuring rules that respect different needs while ensuring actions by Members are the least trade restrictive While the Sanitary and Phytosanitary Agreement and Technical Barriers to Trade Agreement are examples of issues with similar types of competing regulatory needs, many of the new issues are as or more complex. These new complex areas are not seeing discussions to date between trade folks, regulators and lawyers to help clarify the needs, challenges and options that may be available to permit WTO progress on fashioning new rules. In Mr. Mamdouh’s view, WTO Members must do a much better job of discussing issues and clarifying them so the options can be taken back home and reviewed to permit Members to get into real negotiations.
Q: Plurilaterals can be defined as agreements by like minded countries on topics. How do you view plurilaterals and would you support them if you were selected as the next Director-General? Should most favored nation treatment be eliminated for plurilaterals, so the benefits of plurilateral liberalization only goes to those who are participating?
A: In Mr. Mamdouh’s view, one needs to clarify what is meant by plurilaterals. Are we talking about plurilateral processes or outcomes? Mr. Mamdouh views that there are two types of plurilaterals that have been pursued over time. The first is a plurilateral process that produces plurilateral outcomes — that is where the Agreement applies only to the signatories to that agreement. These are like the agreements in Annex 4 to the WTO (civil aircraft, government procurement, dairy and bovine meat). While these can be pursued they are less likely as they require the consent of all Members. There are also plurilateral negotiations that produce multilateral outcomes. That is, the resulting agreement provides benefits to all even though the agreement was among some of the Members. These are quite normal and are clearly within the spirit of the WTO. Practically, Members engaged in plurilaterals will want there to be a critical mass of Members engaged for these types of plurilateral agreements to move forward. Moreover, Mr. Mamdouh noted that there is no requirement that all Members agree to the launch of plurilateral negotiations. That is not a requirement of the WTO and should not be assumed. On the question of whether plurilateral agreements will opt increasingly to limit benefits to members, Mr. Mamdouh believes that the concept of most favored nation treatment in plurilaterals will undergo a stress test in the coming years as there are issues re reciprocity.
Amb. Tudor Ulianovschi (Moldova)
On July 16, Amb. Ulianovschi was the first candidate to meet with the General Council. In his prepared statement when Amb. Ulianovschi got to what he thought the immediate priorities for the new Director-General should be, completing the fisheries subsidies negotiations and making progress on Joint Statement Initiatives were two of the priorities listed.
“In terms of immediate priorities for the future Director General of the WTO, the following should be considered (including in the preparation process for MC12):
“2. Build upon the progress achieved already on the fisheries subsidies negotiations and strongly support Members to achieve a negotiated text by MC12;
* * *
“4. Further encouraging and supporting discussions on new and existing Joint Initiatives, particularly: on Elecronic Commerce, Investment Facilitation for Development, Domestic Services Regulation, as well as the dialogs of the informal group on MSMES and SMEs and others.
“5. Promoting negotiations of new commercial disciplines and address issues of the digital environment and new areas of intellectual property.”
During Amb. Ulianovschi’s press conference after his meeting with the General Council, the last question he was asked had Amb. Ulianovschi point to the Joint Statement Initiatives (which include electronic commerce) as a sign Members could make progress on reform issues. Amb. Ulianovschi was not asked specifically about either fisheries subsidies or electronic commerce. My notes on the question asked and Amb. Ulianovschi’s answer are provided below.
Q: The last question asked was about getting the WTO out of crisis; in particular, what is the core factor causing the crisis and how would Mr. Ulianovschi address the factor if he was selected as Director-General.
A: Mr. Ulianovschi answered that this is an existential question for the WTO. The first priority, in his view, to get out of the crisis is for there to be trust among Members. The role of the Director-General is to enhance feelings of trust through confidence building steps. Many issues which have been unresolved for a long time have undermined trust. Joint initiative statement issues are advancing and give hope that the organization is relevant and can deliver. This is a good sign that there is a common purpose among the Members.
WITA held a webinar with Amb. Tudor Ulianovschi on August 26, 2020. https://www.wita.org/event-videos/conversation-with-tudor-ulianovschi/. During the webinar, Amb. Ulianovschi was asked two questions where his response included views on the fisheries subsidies negotiations and/or on e-commerce/digital trade. My notes on the questions asked and on Amb. Ulianovschi’s responses are provided below.
Q: If you are the next Director-General, what would be your priorities for the 2021 Ministerial Conference and how would you define success?
A: In Amb. Ulianovschi’s view, the next Ministerial must show some results. He believes the top priority would be completing the ongoing negotiations on fisheries subsidies, which is important to fulfill U.N. Sustainable Development Goal 14.6. He believes that the Members are close to getting language agreed to. Completing the fisheries subsidies agreement Is just the first step, but it is an important one. He would also focus on ongoing Joint Statement Initiatives (JSI) such as on digital trade/e-commerce. JSIs are plurilateral negotiations as opposed to multilateral ones. As seen by Members during the COVID-19 pandemic, digital trade is of growing importance. A key question is how to help least developed countries get involved and get help building the infrastructure so such Members can participate. Also Members will need to deal with a range of issues surround digital trade such as cybersecurity, privacy, etc. Amb. Ulianovschi stated that a Ministerial declaration would be expected at the 2021 Ministerial on e-commerce. He also noted that there are other JSIs as well that are being discussed. He believes that at the next Ministerial Members should have a clear message of support for small, medium and micro enterprises. Such enterprises are a huge issue for most Members. Many of these businesses are being severely challenged by the COVID-19 pandemic and many will likely go bankrupt. WTO Members need to help identify how the WTO and other organizations can work with them (financial institutions and ICC).
Q: You say that business as usual isn’t viable anymore. What has changed? If plurilateral work is where we are headed, do we need to rethink the most favored nation principle?
A: Amb. Ulianovschi stated that when one looks at the WTO, one sees that there is a lack of trust which in turn has meant there is lack of forward movement on negotiations. Thus, it is clear that business as usual isn’t working. But that recognition doesn’t mean that the organization starts from zero. What is clear is that things need to change. The WTO is not responding to 21st century issues which cannot continue if the organization is to maintain relevance. On the issue of multilateral vs. plurilateral negotiations, the only multilateral negotiation that is proceeding is on fisheries subsidies. As noted, Amb. Ulianovschi hopes that the fisheries subsidies negotiations will be completed by the next Ministerial in 2021. Where trust is lacking, he belives Members need to seek progress from the bottom up – finding like-minded Members who are concerned about an issue and willing to negotiate rules on the issue. Plurilaterals are going on (JSIs are an example). This is a good sign as plurilaterals show that a number of members are concerned with a topic. Any plurilateral negotiation must be done in a transparent and inclusive manner. Based on his discussions with Members, Amb. Ulianovschi knows that there is a large support for keeping MFN applicable to benefits from plurilaterals.
H.E. Yoo Myung-hee (Republic of Korea)
Minister Yoo in her prepared statement to the General Council identified both fisheries subsidies and the JSI on electronic commerce as priorities for the 12th Ministerial.
“MC12 will be a critical milestone of Members’ ability to deliver results and set the agenda for the future. The new Director-General must help make it a success in order to build trust in the WTO.
“A successful outcome on fisheries subsidies will demonstrate the credibility of the WTO and its ability to contribute to global objectives on sustainable development. It will also provide the world with the benefits for
trade and environmental sustainability. I will do everything I can to support these negotiations and bring them swiftly to a successful conclusion, for endorsement by Ministers at MC12.
“Electronic commerce is also an area in which we should work towards tangible outcomes. The COVID-19 pandemic has highlighted the importance of this issue. A comprehensive agreement by next summer may be ambitious, but I think we can take some concrete steps and lay out the path forward for post-MC12 work.”
During Minister Yoo’s press conference after her meeting with the General Council, she was asked questions on how she would restore trust if selected the next Director-General and how she would bring major Members onto issues being considered. Fisheries subsidies and e-commerce are mentioned in one or the other answers. My notes on the questions and answers provided are presented below.
Q: A question was asked as to how Minister Yoo would restore trust if selected as the next Director-General.
A: Minister Yoo noted her experience in negotiating trade deals with all level of countries around the world. She knows what it takes to negotiate and what it takes to bring negotiations to a close. She is confident that she can earn confidence from Members and achieve tangible outcomes. The key is to obtain even a small success at the MC12 (e.g., fisheries subsidies agreement by then) which would help build trust and convince the world that progress can happen at the WTO.
Q: What does it mean for the WTO to be relevant, and how would you bring on major members who may not agree with the issue being considered?
A: Minister Yoo stated that the WTO needs to revitalize its negotiating function and must be able to enforce its rules (by restoring the Appellate Body). Given 21st century realities, the WTO needs to update its rule book and to achieve agreement on issues that have real global effects such as the joint initiative efforts on e-commerce, MSMEs, investments, and other issues. That said, there are open issues from The Doha Development Agenda that are not moving because there are different views on how to move forward. In terms of how you bring members to the negotiating table, part of the answer is to obtain small successes to build trust and momentum.
WITA had a webinar with Minister Yoo on August 11. https://www.wita.org/event-videos/candidate-h-e-yoo-myung-hee/. During the webinar, Minister Yoo was asked both about the e-commerce negotiations and about the ongoing fisheries subsidies negotiations. My notes on the questions and her responses are provided below.
Q: How important is it to move forward with a WTO reform agenda? In particular digital trade and e-commerce have become much more important to global trade during the pandemic. How important is it for the WTO to address the lack of rules on digital trade and e-commerce?
A: Minister Yoo indicated that the negotiations on e-commerce were important before the pandemic and are even more important now. Thus, it is critical to have successful negotiations. WTO reform is very important generally. All three pillars of the WTO — negotiations, dispute settlement and notifications and monitoring — need to be strengthened. The WTO rule book was largely created 25 years ago. Minister Yoo noted that the world didn’t have the smart phone or even much e-commerce back then. So the existing WTO rules are limited in their ability to deal with current commercial reality. It is important that the WTO achieve an agreement on e-commerce to show that the WTO can adapt to 21st century needs. That said, Minister Yoo cautioned that Members have different views on various aspects of e-commerce. She believes there are some low hanging fruit — e-signature and trade facilitation issues — that Members could be able to agree on relatively quickly. However, Minister Yoo also noted that there are difficult issues in e-commerce tied to other government policy objectives — e.g., data transfer, localization — that may take longer to reach agreement on. In tackling the more difficult set of issues, WTO Members need to look to see if the proposed rule serves a legitimate policy objective of Members. If yes, then Members need to see if there is a way to achieve the objective in the least trade restrictive manner while facilitating e-commerce. Considering the full set of issues that are present in the e-commerce talks, it may be too ambitious to achieve an agreement by the 12th Ministerial Conference in 2021. Hopefully, WTO Members engaged in the talks can achieve a consolidated text by the Ministerial. And then hopefully Members could agree on a path forward. Minister Yoo is optimistic that Members will be able to come up with an ambitious agreement.
Q: Fisheries subsidies negotiations were hopefully going to conclude by this summer before the COVID-19 pandemic delayed negotiations. What are your thoughts on how talks can be brought to a successful conclusion?
A: Minister Yoo stated that the fisheries subsidies negotiations are important to conclude to show the continued relevance of the WTO. The fisheries subsidies negotiations are the only multilateral talks at the WTO that are active (most others are plurilateral). Achieving agreement on fisheries subsidies can also contribute to the UN’s sustainable development goals. For both reasons, concluding the negotiations is very important. Minister Yoo believes that Members should focus their energies on completing the negotiations by the end of this year so that the agreement can be endorsed by Ministers at the next Ministerial Conference in 2021. For the next Director-General, the most urgent agenda item is to help facilitate the conclusion of the fisheries subsidies talks by the end of this year or at the very latest by the next Ministerial Conference in 2021.
H.E. Amina C. Mohamed (Kenya)
Minister Mohamed was the last candidate to appear before the General Council on July 16. Minister Mohamed did not address specifically either fisheries subsidies or the Joint Statement Initiative on e-commerce in her prepared statement to the General Council.
Similarly, during Minister Mohamed’s press conference after her meeting with the General Council, she was not asked a question dealing specifically with fisheries subsidies or the Joint Statement Initiative on e-commerce, nor did she include mention of either in answer to any of the questions asked.
WITA had a webinar with H.E. Mohamed on August 6. https://www.wita.org/event-videos/ambassador-amina-mohamed/. During the webinar, Minister Mohamed referenced digital trade in her opening comments and was asked a question about plurilateral negotiations. As noted before all of the Joint Statement Initiatives (including e-commerce) are plurilateral negotiations . My notes on her comments on these issues are provided below.
Opening statement: Once the world recovers from the pandemic, the WTO will still face challenges of renewal and updating the rules to address global issues such as climate change, the digital revolution, and sustainable development.
Q: on developing new rules at the WTO, it has proven difficult to get agreement among all Members. This has led to many Members turning to plurilaterals to achieve progress. What are your views on plurilaterals? Should MFN treatment of benefits be reconsidered where plurilateral agreements are the basis for liberalization or new rules?
A: Minister Mohamed noted that plurilateral agreements are not new in the WTO; there were plurilateral agreements in the GATT. She believes that plurilateral agreements will continue to be pursued and be part of the trading system. Indeed, Minister Mohamed stated that the completion and/or start of plurilateral negotiations was a “good” that came out of the Nairobi and the Buenos Aires Ministerial Conferences in 2015 and 2017 respectively. Countries that want to take on additional obligations will come together to negotiate new obligations for themselves. In this way, plurilaterals complement the multilateral system. Minister Mohamed stated that once there is a plurilateral agreement, it is important to share the benefits on an MFN basis if you want broad acceptance by Members. Minister Mohamed had been the chair of the Nairobi Ministerial at which an update to the Information Technology Agreement (ITA2) was agreed to. Before the Ministerial, Minister Mohamed had had to travel to a number of capitals to get agreement to apply benefits on an MFN basis. At the end, the benefits of ITA2 are shared on an MFN basis and the agreement is open to all Members who want to join at a later date. This led to unanimous acceptance of the ITA2 at Nairobi in 2015. Minister Mohamed believes that it is important for ongoing plurilateral negotiations to ensure that the benefits are applied on MFN basis and that the agreement is open to all Members.
H.E. Mohammed Al-Tuwaijri (Saudi Arabia)
Minister Al-Tuwaijri was the first candidate to meet with the General Council on July 17. In his prepared statement, Minister Al-Tuwaijri identifies fisheries subsidies and e-commerce as two early deliverables for the WTO at the 12th Ministerial Conference in 2021.
“And finally, concerning the first question on what opportunities and solutions will emerge from current challenges, the existing delay in convening Ministers for the 12th Ministerial Conference may be a blessing in disguise. If we move quickly to take advantage of the opportunity of having an additional year to prepare, we could find and deliver solutions at MC12, particularly on fishery subsidies and electronic commerce and digital trade, which would demonstrate that the WTO can address issues in the public good – that would deliver on your goal of ‘optimal use of the world’s resources in accordance with the objective of sustainable development’ – while recognizing the contribution of e-commerce to economic growth in all markets, which has been emphatically affirmed during the COVID-19 pandemic.
“Although concluding the fishery subsidies negotiations would be a welcome sign that WTO Members can agree on something, we should not exaggerate the impression that this small step will make on our constituents. We need to aim higher, and the DG must work overtime to support a more complete agenda for the future of the WTO by MC12.”
During Minister Al-Tuwaijri’s press conference after meeting with the General Council, one question asked about WTO reform resulted in an answer by the Minister which provided both fisheries subsidies and e-commerce as issues where results by the 12th Ministerial Conference were possible. My notes on the question and Minister Al-Tuwaijri’s answer are provided below.
On the issue of WTO reform, Minister AlTuwaijri recognized that the WTO is a member driven organization. Second, the Director-General has a function to facilitate and to assess, but there is also room to improve the Director-General’s role. For example, the next ministerial (MC12) has been delayed til 2021. The delay provides an opportunity to improve the discussion at MC 12 and the outcomes that are possible. Bringing management and leadership skills to the Director-General position will permit setting goals, metrics for measuring progress in achieving those goals and providing a feedback loop on gaps that need to be addressed. Certain current issues should be achievable, such as fisheries subsidies and e-commerce. In the Minister’s view, COVID-19 and post-pandemic recovery provide the WTO an opportunity to address core needs of Members by doing a performance assessment. Where are the gaps in performance? Why did those gaps develop? How should the WTO proceed to eliminate the gaps? From his business and government experience, Minister Al-Tuwaijri knows that this type of transformation of the WTO to a more goal-oriented organization is possible.
WITA held a webinar with Minister Al-Tuwaijri on August 5, https://www.wita.org/event-videos/director-general-candidate-he-mohammed-al-tuwaijri/. During the webinar, Minister Al-Tuwaijri was asked his views on plurilateral agreements, which include the Joint Statement Initiatives such as the one on e-commerce. My notes on the question and Minister Al-Tuwaijri’s response follows.
Q: Do you see plurilateral negotiations as a good alternative to the lack of progress in multilateral talkes?
A: Minister Al-Tuwaijri responded that his short answer would be Yes. Members need to be able to move on where multilateral talks are blocked or not occurring. So in Minister Al-Tuwaijri’s view plurilateral negotiations and agreements are part of the answer. Because plurilateral agreements have existed for some time, Minister Al-Tuwaijri is interested in why some Members don’t join the agreement over time if the agreement is open to all and provides MFN benefits. The answer to the “why” question is important if plurilaterals are to be more effective and lead to the agreements becoming multilateral over time.
The Rt Hon Dr. Liam Fox MP (United Kingdom)
Dr. Fox was the last candidate to appear before the General Council. His prepared statement has a section which reviews what Dr. Fox considers one of the new Director-General’s first tasks, delivering a successful 12th Ministerial Conference in 2021. Among the issues to be addressed are completion of the fisheries subsidies negotiations and progress on the Joint Statement Initiatives, including on e-commerce.
“Now, one of the first tasks for a new DG will be to deliver a successful 12th Ministerial Conference. The contents are, of course, for the members to agree but it is essential that the DG works with members to produce ideas and an agenda that, yes, excites us here at the WTO but is also seen as relevant outside. It must focus on outcomes, not process, helping the real businesses – large, medium, small and micro – upon which real prosperity depends.
“So what are some of our specific challenges?
“Well, despite remaining gaps, members are perhaps closer than they have been in the past to agreeing new rules to discipline harmful fisheries subsidies, and we must push for an outcome as soon as possible to meet the SDG goal set by Leaders. But, this is not just about fish, but about showing that the WTO can take steps on sustainability more generally – an area where members are rightly bringing forward other ideas, and where the public attach great importance.
“I know many members are also keen to make progress on Joint Initiatives on e-commerce, services, MSMEs and investment – these will be an important part of the discussions in the coming months.”
During Dr. Fox’s press conference after his July 17th meeting with the General Council he was asked one question on the types of reform needed. In his answer Dr. Fox mentioned fisheries subsidies as one topic. My notes on the question and his answer are provided below.
The last question inquired into what reform is needed. Dr. Fox articulated that reform should be viewed in three buckets. The first is conceptual reform. By this he means, Members recommitting to the basic principles of the WTO (most favoured nation, national treatment and transparency of commitments). He believes this is what MC 12 needs to focus on. The second is organizational reform. By this Dr. Fox means what does the team look like, the Director-General being first among equals; selecting Secretariat staff that are the most talented and challenging group. The third is policy reform. By that, Dr. Fox means what issues will be addressed — legacy issues and issues to update organization such as fisheries subsidies; resolution of the Appellate Body impasse. Dr. Fox concluded by saying that the Director-General position is a job for a politician and not for a technocrat at this time.
WITA had a webinar with Dr. Fox on July 30, 2020. https://www.wita.org/event-videos/conversation-with-dr-liam-fox/. During the webinar, Dr. Fox referenced each of the fisheries subsidies negotiations and updating the rules to cover e-commerce briefly. My notes on his comments are provided below.
Dr. Fox opined that the fisheries subsidies negotiations and around that the broader question of sustainability are issues which are not being addressed in the best way by the WTO Members. The WTO and its Members don’t seem interested in using NGOs and young people who have a deep interest in the oceans by including them in the communication process so that there is better understanding that what the WTO is concerned about are issues of interest to the people of the world. In Dr. Fox’s view, there is a disconnect between what the WTO is doing and what the general public is concerned about that has undermined the sense of joint endeavor that was important in the Uruguay Round.
Dr. Fox reviewed the importance of taking forward issues on e-commerce and trade in services. For Dr. Fox, the key question is how does the WTO bring its rule book up to date particularly on the changes in technology. Once the rule book is brought up to date, then the key is ensuring that all Members comply with the rules.
Conclusion
All eight of the candidates to become the next Director-General of the WTO view the completion of the fisheries subsidies as an important early objective and deliverable to demonstrate the WTO’s continued relevance. An agreement on fisheries subsidies would also help support the UN’s sustainable development goals.
All candidates also understand that there is an urgent need to update the WTO’s rule book with the most obvious example being the lack of agreed rules on electronic commerce and digital trade. All recognize that the role of digital trade has been critical to help countries during the COVID-19 pandemic and will be a critical aspect of global trade in goods and services going forward. The Joint Statement Initiative on e-commerce announced at the 2017 Buenos Aires Ministerial Conference currently has more than 80 WTO Members participating in the negotiations. Those Members account for more than 90% of global e-commerce. Reports from the co-convenors indicate the likelihood that there will be at least a consolidated text available by the next Ministerial Conference to be held in 2021. However, because the JSI is a plurilateral negotiation and not a multilateral one, it is envisioned that benefits will be available on an MFN basis (i.e., to all Members of the WTO whether part of the negotiations or not) and that the agreement will be open to all Members to join as desired.