Bali Update: What has happened since the WTO Ministerial?, Part II

WTO LogoSo, the July 31, 2014 deadline for adopting the WTO Trade Facilitation Agreement (TFA), as reported in Bali Update, Part I, has come and gone, and the Agreement has not been adopted. On July 31, 2014, the WTO General Council met to adopt the protocol that will insert the TFA into the WTO regulatory framework. However, as Director-General Azevêdo reported just before the midnight deadline:

At this late hour, with the deadline just a matter of moments away, I don’t have anything in my hands that makes me believe that we can successfully reach consensus. . .. On the one side we have the firm conviction, shared by many, that the decisions that ministers reached in Bali cannot be changed or amended in any way — and that those decisions have to be fully respected. And on the other side of the debate we have some who believe that those decisions leave unresolved concerns that need to be addressed in ways that, in the view of others, change the balance of what was agreed in Bali. These are the two sides. We have not been able to find a solution that would allow us to bridge that gap.

The “other side of the debate” refers to India’s insistence that the Bali Package agreed to in December be adjusted to address its food security concerns before the Trade Facilitation Agreement is adopted.

At Bali, the members agreed to continue discussions to arrive at a permanent solution on how to treat food subsidies. Meanwhile, they instituted a “peace clause” of four years during which such programs by developing countries that meet certain criteria are to be shielded from trade challenges, even if they negatively impact other countries’ trade. India wants this agreement to be interpreted to mean that the “peace clause” remains in place permanently until a comprehensive agricultural package is reached. India believes its interpretation will put more pressure on both sides to adhere to the December 31, 2014 deadline to arrive at an agreement on this issue.

Its refusal to budge on this position means that the Trade Facilitation Agreement remains draft text. This impasse will be revisited in September.

Launch of TFA Technical Assistance Programs

Nevertheless, some steps have already been taken on a key component of the Trade Facilitation Agreement (TFA). The TFA introduces requirements for members to improve the efficiency, effectiveness, and transparency of their customs procedures. The text further provides for technical assistance to developing countries to build the capacity needed to implement its requirements.

The WTO Trade Facilitation Agreement Facility (TFAF) has been launched to provide this assistance.

In a meeting on July 22, 2014, a group of major international organizations declared their intention to work together to assist developing and least-developed Members through a range of technical assistance and capacity-building initiatives. The joint statement is signed by the following international organizations, some of which have already also launched their programs:Imports

The US Agency for International Development (USAID) is establishing an Alliance for the Trade Facilitation Agreement as a public-private partnership. Other multilateral and bilateral donors are expected to launch their assistance programs shortly.

The WTO TFAF will act as a focal point for these efforts by supporting needs assessment, facilitating information flow among development partners and requests for technical assistance, disseminating best practices, and providing grants to support project development and implementation.

Fruition on these commitments is being made contingent on the still-pending adoption of the TFA. Will this reality pressure India to fall in line? (To be continued)

Regularizing & Decriminalizing the Movement of People, Part II

We are not going to stop sending people, and you guys are not going to be able to stop them from getting in.

These are the words of Lt. Col. Reyes Garcia, a Honduran military policy leading an operation to break up an extortion ring used for trafficking women and contraband cigarettes.

When I last addressed this issue, I was prompted to do so in response to the news report of the hundreds of people from Ghana, Eritrea, and Somalia who drowned off the coast of Italy attempting to enter the European Union in search of work and a better life. I wrote then that these tragedies happen because, as the barriers to the movement of goods and services have fallen, those facing people who merely seek the opportunity for a decent life continue to go up.

This time, the focus is on the United States, where the latest humanitarian crisis involves tens of thousands of Central Americans, many of them children, who have overwhelmed US border facilities. They flee violence and despair in search of a “good job” – sewing underwear in a sweatshop for a weekly wage of $47.00.

Here is the irony – similar jobs used to proliferate in Honduras, El Salvador and the other Central American countries at the heart of this story. The ease with which capital can move in search of even higher returns has relocated many of the factories to countries in Asia, such as Bangladesh, where they find cheaper labor and fewer regulations. The people left behind are people like Waldina Lizeth Amaya, a 37-year old mother of four from Honduras who worked for several years in a factor making bras and panties. Now, after trying unsuccessfully to find work in Honduras, she is one of the tens of thousands of persons determined to make it to the U.S. in search of the jobs there.
The International Organization for Migration (IOM) writes that:

When properly managed, labour migration has far-reaching potential for the migrants, their communities, the countries of origin and destination, and for employers.

In 2011, there were 105 million people working in a country in which they were not born, generating income of US$440 billion, of which US$350 billion was sent back to their home countries. International aid agencies now treat these remittances as an important source of “foreign earnings” for the receiving countries.

Courtesy of Wikipedia

Courtesy of Wikipedia

Yet, the rules to manage and legitimize the economic migration of persons remain sketchy, at best. The World Trade Organization (WTO) rules recognize the movement of people as service providers as a delivery mode for trade in services. However, existing rules focus on movement of professional and highly-skilled workers. The low-skilled or unlicensed service provider continues to be marginalized, despite the continued high and ongoing demand for their services, particularly in developed economies.

In the face of this Central American influx, the United States does not have to wait for new WTO rules – it can unilaterally address the issue through a rational approach to immigration, which also takes into account the reality of labor and economic migration – persons who want to temporarily migrate just to work. The tragedy is that neither the WTO nor the US seem inclined to do so.

Bali Update: What has happened since the WTO Ministerial?

WTO LogoAfter having pulled the members together to achieve consensus to make some decisions at the WTO Bali Ministerial in December, 2013, months later WTO Director-General Azevêdo issued a warning against revisiting those decisions.

The “Bali Package” adopted at the Ministerial consists of a number of small deals pulled from the broader Doha Agenda for negotiating a new set of rules to govern international trade:

  1. Decision on duty-free, quota-free (DFQF) access for products of least-developed countries.
  2. Decision to simplify preferential rules of origin for least-developed countries to make it easier for them to qualify for DFQF entry into the importing countries.
  3. Decision operationalizing the “services waiver” that will grant least-developed countries preferential access to other countries’ services markets.
  4. Decision on a “monitoring mechanism” to analyze and review implementation of special and differential treatment rules for developing countries.

The Agreement on Trade Facilitation, in particular, is seen as the most important component of the Bali Package. It Importsintroduces requirements for members to improve the efficiency, effectiveness, and transparency of their customs procedures. The anticipated benefits are a 10%-15% reduction in the costs of international trade. For developed countries, these changes hold the promise of increasing trade flows and revenue collections. Furthermore, the Agreement contains promises of technical assistance and capacity building for developed countries to help them to make the required investments associated with implementing the Agreement.

At this point, the text adopted in Bali remains a draft. Though its substance is not expected to change substantially, its text will become final only when it is adopted by the WTO General Council. This adoption is currently scheduled to occur at the meeting of July 31, 2014.

Meanwhile, however, India has raised the concerns of food security and indicated that it wants to see more progress on this issue. At Bali, the members agreed to continue discussions to arrive at a permanent solution on how to treat agricultural subsidies. Meanwhile, they instituted a “peace clause” of four years during which such programs by developing countries that meet certain criteria are to be shielded from trade challenges, even if they negatively impact other countries’ trade. This issue is of prime importance to India who wants to see progress on this issue. India wants this “peace clause” to be made permanent and believes that, like the Trade Facilitation Agreement, this should become part of the Bali Package.

Such a proposal is likely dead-on-arrival, however. Developed countries such as the United States, have agricultural subsidies programs that they would dearly love to be able to protect from complaints by other WTO members. They consider India’s economy to be too big to be eligible for this type of protection.

We can expect the long-running “negotiations” over the difficult issue of agricultural subsidies to continue for some time. (To be continued -)

World Cup 2014, friend of the ICC?

Fifa2014WorldCupQualifiersAny of my fellow fans of sports and international law notice that all but 5 of the 32 teams playing in this year’s World Cup are states parties to the Rome Statute of the International Criminal Court? They are Argentina, Australia, Belgium, Bosnia and Herzegovina, Chile, Colombia, Costa Rica, Côte d’Ivoire, Croatia, Ecuador, England (United Kingdom is the state party), France, Germany, Ghana, Greece, Honduras, Italy, Japan, Mexico, Netherlands, Nigeria, Portugal, Republic of Korea, Spain, Switzerland, Uruguay, and, of course, the host state, Brazil. (image credit)

The 5 nonparty outliers? Algeria, Cameroon, Iran, Russia, and, of course, the United States.

The combined victory record of those outliers = 1 win, out of 6 games played. Just sayin’.

(Cross-posted from Diane Marie Amann)

Ukraine Tug of War – When a Trade Pact is Not Just About Trade

Watching the escalating events in Ukraine, where a full-blown civil war is underway, it is very easy to forget the decision that sparked these events.

November 21, 2013, then Ukrainian President, Viktor Yanukovych, announced that his government was abandoning plans to sign an association agreement that would begin the process of strengthening ties with the European Union (EU). Within two months, protests against this decision had led to his forced resignation.

For a significant portion of Ukrainians, closer ties with the EU represent, among other things, a move toward a less corrupt society. The EU is more than a trade bloc. The association agreement signed by the new Ukrainian government with the EU includes an agenda for reforms to support the country’s economic recovery and governance.

For the Russian powers-that-be, one can only speculate that the same move represents a start down the path that has already been taken by Albania, Poland, Romania and other former communist Eastern European countries. Today, these countries are not just members of the European Union, but also of the North Atlantic Treaty Organization (NATO).

NATO is a political and military alliance comprising 28 countries, including the United States. Among other provisions, the North Atlantic Treaty states that an armed attack against one NATO member is considered an attack against all members, requiring them to come to the assistance of the attacked member. Created in 1949, the expected attacker was the precursor to today’s Russia – the Soviet Union.

The Soviet Union’s response to NATO was the Warsaw Pact, also created as a collective defense treaty that would bring its members to the defense of any one that was attacked. In this case, the expected attacker was the United States and its NATO allies. Defunct since the collapse of the Soviet Union, Warsaw Pact members included – Albania, Poland, Romania, and other former communist Eastern European countries. As a part of the territory of the Soviet Union, Ukraine was by default, also a part of the Warsaw Pact.

Today, NATO lives on. All EU members are not NATO members. However, all former Eastern Europe Warsaw Pact members are now NATO members.

The Cold War is ostensibly over, but apparently not for Russia. The steps taken by Ukraine that bring it closer to the EU are apparently being viewed through the cold war prism. Ukrainians deserve the right to choose their own way forward.

Perhaps, however, the United States and the EU have a role to play in de-escalating the rising tensions Ukraine EU Russia
by acknowledging that EU membership, particularly when elected by a
former Soviet republic, is about more than trade.

Bali Present: WTO 9th Ministerial Delivers

Bali Opens (www.wto.org)

Bali Opens
(www.wto.org)

In our last post, Hopeful Watching: The WTO 9th Ministerial in Bali, we discussed the high hopes with which the Doha Development Round had been launched, its shrinking agenda, and the hope that some consensus would emerge that could lead to a deal focused around the hopes and aspirations of developing countries.

Just in time for the holidays, after round-the-clock discussions that extended into an additional all-nighter of negotiations, the “Bali Package” was delivered. It consists of the following small deals pulled from the broader Doha Agenda:

On Agriculture, the thorny issue of Food Security led to a “peace clause” for four years during which food stockpiling programs by developing countries which meet certain criteria will be shielded from trade challenges, even if they negatively impact other countries’ trade, while they negotiate a permanent solution. This outcome, where it’s now advanced developing countries, notably India, that are seeking protection for their agriculture subsidies represents a complete turn-around from the original focus of the Doha Round – elimination by developed countries of their programs of subsidies. This issue, perhaps more than any other, indicates the extent to which the Doha agenda has evolved since 2001.

The consensus around Development Issues emerged in the form of Members’ commitments to implement four previous decisions:

New WTO Member

Bali Closes (www.wto.org)

Bali Closes
(www.wto.org)

In other business, thirteen years after submitting its application to join the WTO, Yemen was formally welcomed into its ranks. Once Yemen ratifies the terms of its accession, it will become the WTO’s 160th member. It is also the seventh (7th) LDC to join the WTO. Implementation of the Development Decisions (above) will improve the terms on which LDC products access world markets whether or not they join the WTO.

Post-Bali Package?

The Bali Package also includes hopeful language about returning to the other issues on the Doha Agenda. These include market access for manufactured goods, more substantive agreements on agriculture and an agreement on services. However, on services, for example, separate negotiations have already begun to conclude the Trade in Services Agreement (TISA). These talks are being pursued on a plurilateral basis, i.e. a sub-set of WTO members, allowing them to bypass the pesky requirement to achieve consensus among all (now 160) WTO members. It is therefore more realistic to conclude that the Bali Package has already delivered all that can be reaped from the Doha Agenda.

Hopeful Watching: The WTO 9th Ministerial in Bali

Trade ministers from around the world are once again meeting in an attempt to conclude the Doha Development Round of trade negotiations. The WTO’s Ninth (9th) Ministerial Conference opened December 3rd, 2013 in Bali, Indonesia and is scheduled to conclude on December 6th.

When they last met at the WTO’s Eighth (8th) Ministerial Conference in Geneva (December 15th – 17th, 2011), the trade ministers left the meeting with no clear path toward concluding the Doha Round negotiations.  Launched in November, 2001, the negotiations began with an apparent commitment to liberalize trade while addressing the longstanding concerns of developing countries, particularly continued agricultural subsidies by developed countries. Since then, however, the outcomes contemplated when the Round was launched are no longer an option. Several factors account for this reality:

Emerging Issues: Trade issues and concerns, particularly for the developed countries that drive the agenda, have changed since the launch of the Doha Round in 2001. At the top of these issues is recovering from the economic depression and identifying and addressing the new protectionist approaches by which countries attempt to gain a competitive, if unfair, advantage. Issues such as currency manipulation and climate change compete for attention, and at times make the 12-year old Doha agenda seem obsolete. At the same time, the unaddressed issues remain and developing countries have refused to take on new obligations while their concerns remain unaddressed.

Shrinking WTO Agenda: In compromise, the Doha Round negotiating agenda has been shrinking. The agenda in 2011 had shrunk from the goal of reaching agreement on a comprehensive deal to four main areas — agricultural market access, market access for industrialized goods, trade in services, and trade facilitation (streamlining customs and port procedures).  Two years later, it’s been further distilled to focus on areas of primary interest to developing countries – agriculture, trade facilitation, and special and differential treatment, particularly for least developed countries.  To keep the business interests in the developed world engaged, however, pressure is being placed on emerging countries, notably the “BRICS”, to lower tariffs and give greater access to their markets, even in a seemingly neutral area such as trade facilitation.  Meanwhile, the emerging countries continue to identify with other developing countries, particularly with respect to the technical and other non-tariff barriers that their goods face upon entry to developed country markets.  Without such compromises, however, it is unclear that developed countries will be willing to sign off on a deal.

Consensus around Development

In fact, however, a renewed focus on “development” may be what’s needed. There is already some consensus about what needs to be done for the “poorest of the poor” countries – the LDCs. For the broader group of developing countries, removal of negotiations on services is already a disappointment but any progress on addressing non-tariff barriers to developed country markets would be welcomed. And the election this year of Brazil’s Roberto Azevêdo as the current WTO Director-General  provides some hope that he can bridge the divide that exists between developed and developing countries.

Hoping against hope, we watch the progress of the 9th Ministerial.

UN enforcing bad old stereotypes?

repStunning to see the tweet above, which the Office of the U.N. High Commissioner for Refugees sent to the 1.4 million persons who follow its Twitter feed yesterday. The quote appears to speak to the horror of sexual assault – but not a horror on which we would have expected the UNHCR to focus. Instead of physical harm, psychological trauma, or violation of personal dignity and autonomy, the tweet speaks of loss of “reputation,” as some fragile thing that never can be restored. To reinforce such an outdated stigma, and in so doing to remain silent about other harms, appalls.

‘Nuff said

[S]ome members of Congress . . .  have held comprehensive immigration reform hostage as they demand incregilman_deniseased border enforcement. . . The border wall is . . . an international embarrassment. Human rights bodies of the United Nations and the Organization of American States have condemned its impact. Mexico’s secretary of international affairs recently expressed dismay at the possibility of additional fencing. He aptly noted that border barriers present the wrong approach for addressing immigration flows, encouraging trade and modernizing borders. . . Immigration reform must pass, and it must do so without leaving U.S. citizens in a militarized zone in their own country.

Denise Gilman, Clinical Professor and Co-Director of the Immigration Clinic at the University of Texas at Austin, in an op-ed entitled “Building walls and militarizing Texas border harms us all“, published in the Dallas Morning News last week.  You can learn more about Denise’s work on the human rights violations implicated in the construction of a Texas/Mexico border wall here.

‘Nuff said

gay flagTo be sure, there is not one single strategy or answer that can resolve all these questions, as is always the case when people are fighting for their rights. What is clear, though, is that serious thoughtful debate may be more likely in the courtroom than in the congress, particularly where religion maintains a stronghold in legislative debate. In those cases, minority groups must rely on litigation to protect them against the tyranny of the majority — fitting, since courts were designed to carry out just that role in public life.

— Prof. Lina M. Cespedez Baez of the faculty of law of the Universidad del Rosario in Bogota, Colombia, currently a Fulbright scholar pursuing her SJD (under my supervision) at Temple Law School. This quote comes from Lina’s article published this week in Foreign Affairs magazine, Gay Marriage Goes to Court in Colombia, comparing marriage equality campaigns, legal and extralegal, in the United States and Colombia.