Conclusion of the negotiation on services domestic regulation at the World Trade Organization (WTO) on December 2nd (2021) shows that, despite the postponement of the 12th Ministerial Conference (MC12) work on advancing its agenda continues. But can the WTO MC12 deliver for developing countries?
Conducted on a plurilateral basis, only 67 of the WTO’s 164 members participated in negotiations on the new agreement which commits the signatories to incorporate measures for increased transparency, predictability, and effectiveness of licensing, qualifications, and technical standards for service providers. There is nothing revolutionary here. It is noteworthy, though, that only two of the G-90 group of developing countries (Mauritius and Nigeria) participated in the negotiations. So, even as the WTO celebrates this accomplishment, it also provides stark evidence of the schism between developed and developing members. While the organization moves on to engage new priorities of the more advanced economies, older issues of importance to many developing countries remain unresolved.
Is the Doha Development Agenda Dead?
Developing countries remain invested in the Development Agenda of the Doha Round of 2001. Launched as negotiations which would place at their heart the needs and interests of developing countries, progress has been grindingly slow. One key Doha Development Agenda (DDA) item, for example, is the work to review the Special and Differential Treatment (SDT) provisions in WTO Agreements to make them more precise, effective, and operational. SDT provisions in WTO Agreements give developing countries some flexibility in implementing their commitments and permit developed countries to treat them more favorably. The report prepared for MC12 on this issue (November 17, 2021) highlights the continued divergent views and lack of engagement by Members on the substance of ten proposals submitted by the G-90 group of developing countries. The G-90 proposals (access to the text has been restricted) seek to, among other things, establish implementation timelines, guarantee technical assistance and capacity-building programs, and ensure that governments have the policy space to pursue policies to meet their development objectives. With the lack of consensus, the likelihood that a draft Declaration on this issue so central to the interests of developing countries will be on the agenda at MC12 is remote.
Unresolved issues that date back to the 1995 Agreement on Agriculture were also integrated into the Doha Development Agenda with the goal of correcting and preventing distortions in world agricultural markets. Domestic support in the form of subsidies or direct payments to farmers and other agricultural interests distort trade by propping up uncompetitive industries or sectors and depressing prices. Under the 1995 WTO rules, all countries are allowed to provide support up to specified levels. 25 years later such trade-distorting domestic supports total almost one trillion US dollars. Most developing countries lack the financial resources to make such payments, making it the purview of rich countries. Having reached agreement at the 2015 Ministerial Conference on eliminating agricultural export subsidies, negotiations continue to set rules that will curtail these more egregious forms of support. On this issue as well, there is no sign that enough progress will be made to place it on the MC12 agenda.
For developing countries, these and other topics on the Doha Development Agenda remain central to their interests and are very much alive as negotiating issues, no matter how much developed countries seek to declare otherwise.
Can MC12 Deliver for Developing Countries?
MC12 can nevertheless deliver for developing countries. The Trade Facilitation Agreement of 2013 to reduce the bureaucratic delays and red tape that hamper the movement of goods and services across borders has been a bright spark. The first agreement concluded multilaterally, i.e., by all WTO members, in almost 20 years, it recognized the capacity constraints of developed countries and provided concrete commitments on technical assistance and capacity building. Members hope that at MC12, a similar approach can lead to another multilateral outcome with an Agreement on rules to eliminate fisheries subsidies that contribute to overcapacity and overfishing. Also part of the Doha Development Agenda, this issue has received renewed focus at the WTO and as a UN Sustainable Development Goal. SDT provisions have been an integral, if contentious, part of the negotiations. Members are taking advantage of the delayed start to MC12 to continue negotiations on the draft text.
Even as they strive towards progress in these areas, however, the ongoing plurilateral negotiations deserve the attention of developing countries. A case in point is the negotiations towards an Agreement on Investment Facilitation in which 100 WTO Members are currently engaged. This is an important issue to get right. The rules that emerge will, one way or the other, become enshrined in the trade architecture. SDT provisions are being contemplated with the usual focus on technical assistance for capacity-building. However, an Agreement to truly facilitate development through investment also means agreeing on rules that help honest governments and fair-minded investors determine an equitable distribution of profits derived from exploitation of a country’s resources; rules that help countries to negotiate fair deals that support development-oriented and sustainable outcomes.
(This is a cross-post from our DevelopTradeLaw blog site, where we also did a previous post exploring the role of WTO Ministerial Conferences and how the MC12 agenda had been taking shape.)