SEE ALSO
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
Technical note: types of plurilateral deals and adding them to WTO rules
Participants in the present plurilaterals: Technical note
For a taste of the intense debate on this in the WTO General Council,
see this 13-page extract from the minutes (March 2021 meeting)
There are also signs that the “plurilateral” approach can
produce results. See “‘Plurilateral’ WTO services
deal struck after breakthrough text released”
By Peter Ungphakorn
POSTED FEBRUARY 22, 2021 | UPDATED JANUARY 3, 2024
It’s tempting to call it a bombshell. But the warning signs have been around for some time. Nevertheless a new paper from India and South Africa (joined two months later by Namibia) signals a tough ride for the new head of the World Trade Organization’s ambitions to drive negotiations forward.
The paper criticises negotiations involving only part of the WTO’s membership. They are called “plurilaterals” and are seen as a way of breaking deadlock when consensus is elusive.
It was first circulated on February 19, 2021 for the March 1–4 meeting of the WTO General Council — the WTO’s topmost decision-making body outside ministerial conferences. It will be the council’s first regular meeting of the year. (The revision with Namibia added as a sponsor followed in April.)
March 1 also happened to be the first day in office for Ngozi Okonjo-Iweala, the organisation’s new director-general.
Keen to be an active WTO head, she had already argued that if the WTO membership as a whole is struggling to reach consensus agreement in negotiations, then the solution should be deals struck among only some members, provided enough of them are on board — a “critical mass” of them.
“Plurilateral initiatives have brought new energy in the multilateral trading system,” Okonjo-Iweala told members in an irregular General Council meeting on February 15, called specially to confirm her appointment.
The view is shared widely. Three days later on February 18, 2021, The European Union Commission released a major statement on its trade policy. On WTO reform it said:
“A single undertaking approach has failed to deliver and progress can be best achieved through different processes, in particular open, plurilateral agreements. In parallel to substantive negotiations, WTO members should reflect on ways of better integrating plurilateral agreements into the WTO framework.”
Dissent arrived the next day, February 19, in the paper from India and South Africa.
They stopped short of saying they would block inserting new plurilateral agreements into the WTO’s trade system, but their opposition is clear.
They argued that plurilateral agreements contradict the fundamental principles of the WTO: multilateralism (all members involved), decisions by consensus (nobody objects), and the rules on amending WTO agreements.
India, for one, has been sceptical for some time about the plurilateral approach, for example in the October 2020 General Council meeting (see page 82 of the minutes).
This affects five subjects under negotiation plurilaterally in the WTO. Three were originally grouped as “joint statement initiatives” (“JSI” in the India-South Africa paper): electronic commerce/digital trade, investment facilitation for development, and micro, small and medium-sized enterprises (MSMEs).
A fourth is domestic regulation in services. Like the other three, these talks were launched at the last ministerial conference in 2017 and the subject is now also considered to be a joint-statement initiative even though it was not in the group announced at the conference. The WTO has been bashful about these talks, not acknowledging their existence publicly until May 2019.
A fifth subject is trade and gender. It, too, is now considered a joint-statement initiative.
Just over 91% (149) of the WTO’s 164 members are involved in at least one of these talks — meaning only about 14 are not involved in any.
Three of the five topics first initiated in 2017 have concluded with agreement or are close to doing so. Participation in any one of them ranges from 70 members to 116:
- electronic commerce and digital trade
- domestic regulation in services
- investment facilitation for development
- micro, small and medium-sized enterprises
- gender equality and women in trade
Three more launched in 2021 have 48 to 75 participants. They are on environmental sustainability, plastic pollution and fossil fuel subsidies.
(Information taken from this technical note in September 2023.
The note, with details and sources, is periodically updated.)
Based on all of these sources, the full list of participants in WTO plurilateral talks is (at least): 152 (93%):
PARTICIPANTS in WTO plurilateral talks
February 26, 2024
Afghanistan; Albania; Angola; Antigua and Barbuda; Argentina; Armenia; Australia; Austria; Bahrain; Barbados; Belgium; Belize; Benin; Bolivia; Botswana; Brazil; Brunei Darussalam; Bulgaria; Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Canada; Central African Republic; Chad; Chile; China; Colombia; Dem. Rep. Congo; Congo; Costa Rica; Côte d’Ivoire; Croatia; Cyprus; Czech Republic; Denmark; Djibouti; Dominica; Dominican Republic; Ecuador; El Salvador; Estonia; Eswatini; European Union; Fiji; Finland; France; Gabon; Gambia; Georgia; Germany; Greece; Grenada; Guatemala; Guinea; Guinea Bissau; Guyana; Haiti; Honduras; Hong Kong, China; Hungary; Iceland; Indonesia; Ireland; Israel; Italy; Jamaica; Japan; Kazakhstan; Kenya; Rep. Korea; Kuwait; Kyrgyz Republic; Laos; Latvia; Lesotho; Liberia; Liechtenstein; Lithuania; Luxembourg; Macao, China; Madagascar; Malawi; Malaysia; Maldives; Mali; Malta; Mauritania; Mauritius; Mexico; Moldova; Mongolia; Montenegro; Morocco; Mozambique; Myanmar; Namibia; Netherlands; New Zealand; Nicaragua; Niger; Nigeria; North Macedonia; Norway; Oman; Panama; Papua New Guinea; Paraguay; Peru; Philippines; Poland; Portugal; Qatar; Romania; Russia; Rwanda; Saint Kitts and Nevis; Saint Lucia; Saint Vincent and the Grenadines; Samoa; Saudi Arabia; Senegal; Seychelles; Sierra Leone; Singapore; Slovak Republic; Slovenia; Solomon Islands; Spain; Suriname; Sweden; Switzerland; Chinese Taipei; Tajikistan; Thailand; Togo; Tonga; Trinidad and Tobago; Turkey; Uganda; Ukraine; United Arab Emirates; United Kingdom; United States; Uruguay; Vanuatu; Venezuela; Vietnam; Yemen; Zambia; Zimbabwe (152)
Sources are here
Those not participating in plurilaterals: 12 (7%)
NOT PARTICIPATING in WTO plurilateral talks
February 26, 2024
Bangladesh, Cuba, Egypt, Ghana, India, Jordan, Nepal, Pakistan, South Africa, Sri Lanka, Tanzania, Tunisia (12)
Sources are here
Since large numbers of developed and developing countries are active in all these plurilateral negotiations the concerns of India and South Africa are not widely shared. China, by contrast is now involved in almost all of them, including more recently, e-commerce.
General Council minutes show dwindling support for their position. In the November 22–23, 2021 meeting, support only came from Namibia, Pakistan, Tunisia and Nepal, according to WTO spokesman Keith Rockwell. Pakistan had originally participated in some but has now dropped out. Nambia participates in one.
The talks will continue anyway, but what happens when they conclude remains to be seen.
Continue reading or use these links to jump down the page:
What are plurilateral agreements?
The India-South Africa paper | Objections | Proposed options | Reactions
A political observation
Find out more
What are plurilateral agreements?
How many types are there? How can they be added to WTO rules?
These sections have been moved to: “Technical note: types of plurilateral deals and adding them to WTO rules”
The India-South Africa paper
Objections
India, South Africa and Namibia say each of the plurilaterals currently under negotiation “is likely to pose different legal challenges to existing rules and mandates”. Without going into each subject, they say proposed new rules would affect:
- Rules and principles: “erode the integrity of the rule-based multilateral trading system by subverting established rules and foundational principles of the [WTO agreements]”
- Precedent: “create a precedent for any group of members to bring any issue into the WTO without the required consensus”
- Collective oversight “bypass the collective oversight of Members for bringing in any new rules or amendments to existing rules in the WTO”
- Resources: “usurp limited WTO resources available for multilateral negotiations”
- Mandates: “result in members disregarding existing multilateral mandates arrived at through consensus in favour of matters without multilateral mandates”
- Balance and inclusion: “lead to the marginalization or exclusion of issues which are difficult but which remain critical for the multilateral trading system, such as agriculture, development, thereby undermining balance in agenda setting, negotiating processes and outcomes”.
This opens the door to possible trade-offs. But it’s unclear whether the priorities of India and South Africa could be potential consensus-builders — rules on stockholding food when bought at supported prices, relaxed tariff rules for agricultural products, or a waiver on intellectual property protection for COVID-19. - Development priorities: “leave Members with no option other than to choose between remaining outside the discussions or participating on matters that are inconsistent with their economic development priorities, needs, concerns and levels of economic development”
- Multilateralism: “fragment the multilateral trading system and undermine the multilateral character of the WTO”
Proposed options
India and South Africa propose solutions inside and outside the WTO framework or changing the rules:
Conclude in the WTO: Seek consensus amongst the whole WTO membership to make the deal multilateral, applying to all members. Or keep it plurilateral and add it to the WTO agreements as such.
Either way, this would amount to amending the WTO agreements. Once agreed by consensus, the deal would then have to be ratified by at least two thirds of the membership before it could take effect.
Conclude outside the WTO: Keep the deal outside the WTO. It would not be added to WTO rules and crucially would not come under WTO dispute settlement.
Accusations of violating the deal could not be challenged legally in the WTO (although dispute settlement could be used if countries outside the plurilateral group felt the deal led to a violation against them).
India and South Africa cite as examples negotiations on a Trade in Services Agreement (TISA), and free trade agreements outside the WTO.
Change the rules: Amend the WTO Agreement (Article 10) to allow for a “flexible multilateral trading system”. This would require consensus followed by at least two-thirds of the members to ratify for the amendment to take effect.
India and South African do not say how they would approach an amendment. They also do not mention that once ratification by two thirds has been reached, the amendment would only apply to the ratifying countries. This raises the prospect of a mess, where the new rules on a “flexible multilateral trading system” apply to some members but not others.
Reactions
On March 29, 2021, Brazil circulated a General Council document proposing WTO members work on developing “WTO architecture” that would incorporate plurilaterals more formally in its structure of agreements.
Aiming for a decision at the next ministerial conference in November-December 2021, Brazil proposed that the decision should recognise the possibility of countries being able to negotiate “at different speeds”, with plurilateral and multilateral talks supporting each other:
“WTO architecture: a flexible geometry for plurilateral negotiations. We need to agree on a pathway that leads to the flexible geometry of plurilateral negotiations at the WTO. Those that are willing to advance negotiations at different speeds should count with the institutional framework to do so at the WTO. Plurilateral and multilateral formats should complement and reinforce each other.”
This is similar to the position of the EU, as described by its ambassador to the WTO, João Aguiar Machado.
Whereas Brazil implies the decision could be taken at the next ministerial conference, the EU’s idea is for a decision after that, with a new working group to be set up to discuss criteria for plurilateral agreements as part of WTO reform more broadly. He told this blog on February 27, 2021:
“The EU would favour an inclusive approach to open, plurilateral agreements that facilitates participation by developing countries and allows them to decide whether they wish to join the agreement, leaving the door open for them to join in the future.
“Discussions with members could identify certain principles that plurilaterals should comply with in order to be incorporated into the WTO framework — relating for example to openness to participation and future accession by any WTO member. A Working Group on WTO reform could be set up at the ministerial conference to consider this and other institutional improvements to the WTO’s functioning.”
The membership as a whole had already discussed the India-South Africa paper in the General Council meeting on March 2, 2021 where many plurilateral participants reacted with dismay and condemnation, according to accounts from people who attended, confirmed by the minutes (from page 65 in the full document, or see this 13-page extract) now derestricted.
Russia said it found the paper “upsetting ”. The paper risked the WTO becoming an “archaic” and “useless” organisation, and was not really about legality but preventing the WTO from moving forward. The Philippines complained about a minority seeking to frustrate a majority who want to modernise the rules.
The EU warned that obstructing the plurilaterals would leave the WTO outdated and irrelevant. The talks would just move outside the WTO, the EU said. Others denied that more traditional talks such as agriculture were being neglected.
India and South Africa were in a minority. Support came from a handful of their neighbours, plus Tanzania, Cuba and Oman.
Perhaps the most intriguing reaction was China’s. It did not speak at all, not in that first meeting.
Beijing likes to position itself in the alliance of developing countries that includes India, but it is active in all the plurilaterals — as are large numbers of developing countries.
Then, in the next meeting in May 2021, China did speak. It defended the plurilateral talks, arguing that they were open and transparent, and should reflect the membership’s diverse levels of development. China also said members should explore better ways to integrate plurilaterals into the multilateral framework.
This is from the minutes:
“8.72. The representative of China said that as a creative approach to negotiations, JSIs had brought new energy into the multilateral trading system, with increasing participation from Members. They were also essential to making the rules of international trade responsive to the digital transformation of the global economy. Since their very beginning, JSIs had been strictly conducted in line with the WTO’s principles of openness and transparency. China was of the view that JSI negotiations should take into account the diversity of the Membership and their level of development, providing Members more comfort as to how and when to participate in JSIs.
“8.73. China noted that the ultimate goal of the work at the WTO was to establish universally applicable multilateral rules, rather than to be taken as a substitute for multilateralism. To this end, they saw a need to explore ways of better integrating JSI agreements into the WTO framework. In this regard, the paper helped Members to reflect upon those issues. China believed that as long as the outcomes of JSIs benefitted Members as well as the organization, a solution would be found regarding their legal status.”
The India-South Africa paper has stayed on the General Council agenda, the discussion apparently repetitive, with China said to have returned to silence in the July 2021 meeting.
The next biennial ministerial conference, postponed from 2020, is now likely to be held in Geneva in December 2021. It will be the 12th WTO ministerial conference, called in WTO-code, “MC12”.
A political observation
Finally, politics. The paper is the latest product of a new India-South Africa alliance in the WTO. The two also spearheaded a proposal to waive some intellectual property protection on medical products during the COVID-19 pandemic.
It highlights the end of a decades-long alliance between India and Brazil against moves in the trading system that they considered to serve the interests of rich countries and big corporations at the expense of the poor.
Back in 1985–86 the two led a group of hardline developing countries opposing the launch of new negotiations that became the Uruguay Round. Their numbers dwindled as compromises and concessions for developing countries increased in the proposed negotiating mandate. They eventually joined the consensus.
Since the WTO was created out of the Uruguay Round in 1995, India and Brazil also repeatedly sought more flexibility in WTO intellectual property rules.
But recently Brazil, which has announced it is not seeking special treatment in the WTO as a developing country, has broken ranks. It did not support the COVID-19 waiver. It is participating in the all the plurilateral talks. And it has now called for members to develop new procedures to accommodate plurilaterals.
More on WTO plurilaterals, and on WTO decision-making, consensus and voting
Find out more
On this blog
- Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
- WTO investment facilitation text completed but still faces uphill battle
- ‘Plurilateral’ WTO services deal struck after breakthrough text released
- Experts: India, S.Africa unlikely to succeed in blocking WTO services deal
- WTO environment talks — official text with 70 members: China, US, Israel too
Elsewhere
- WTO Plurilaterals, an independent website created by Geneva Trade Platform
- Nicolas Lamp: A Historical Perspective on India‘s and South Africa’s Threat to Block the Implementation of the Joint Statement Initiatives in the WTO, and a Potential Way Forward, International Economic Law and Policy Blog, February 26, 2021
- Bernard M Hoekman, Charles Sabel: Plurilateral cooperation as an alternative to trade agreements : innovating one domain at a time, Robert Schuman Centre for Advanced Studies, January 2021
- Andrew Stoler: “Joint Statement Initiatives” and Progress in the WTO System, University of Adelaide, Institute for International Trade, May 21, 2021
Credit: to Ieva Baršauskaitė for spotting the new paper
Updates:
January 3, 2024 — removing the section on types of plurilaterals and how to add them to the rule-book, placing it with a link to the new technical note on the subject; updating to reflect Namibia becoming a co-sponsor of the original India-South Africa paper in April 2021
September 17, 2023 — updating numbers of participation in plurilaterals and adding the lists of countries participating (or not) in any plurilateral
January 10, 2022 — adding quotes from Andrew Stoler’s paper and links to the explainer on the 18 WTO plurlaterals
December 14, 2021 — adding the graphic on the structure of WTO agreements and Hamid Mamdouh’s paper on creating an Annex 5
November 24–25, December 1, 2021 — updating numbers on participation in plurilaterals, adding the link to the WTO Plurilaterals website under “Find out More”
October 6, 2021 — adding the link to the update on the services regulation talks at the top
August 23 and July 28, 2021 — adding the paragraph on later General Council meetings and the quote on China’s statement in the May meeting
July 25, 2021 — adding the link to the derestricted minutes on the discussion in March 2021, with minor corrections to the original summary of reactions, now based on the minutes
May 26, 2021 — adding Stoler’s paper under “Find out more”
March 30, 2021 — adding Brazil’s proposal
March 5, 2021 — correcting the quote on Russia’s reaction
March 4, 2021 — adding reactions in the General Council and numbers of countries participating in plurilaterals
February 26–27, 2021 — adding the EU’s position; adding links to leaked draft texts; revising the section on hybrid plurilaterals based on draft schedules of commitments; clarifying services domestic regulation as a “joint-statement initiative”; adding China’s participation; adding talks on environmental goods
February 23, 2021 — correcting Brazil’s status at the end (it’s not yet in the OECD); adding commentators’ confidence on including rules in schedules of commitments, and the implications
Image credits:
All photos | Tima Miroshnichenko, Pexels licence
Graphic | the author CC BY-SA 4.0
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