South Africa – Trade β Blog

Setback for plurilateral approach as investment deal blocked again

The 128 participants will continue efforts to persuade India, South Africa and Türkiye that their deal can become an official WTO plurilateral agreement

By Peter Ungphakorn
POSTED MARCH 22, 2024 | UPDATED MARCH 23, 2024

India and South Africa, now joined by Türkiye, continued to block consensus on adding the 128-participant Investment Facilitation Agreement to the World Trade Organization’s rulebook when WTO members met as the General Council today (March 22, 2024).

The on-going resistance is a setback for the large number of countries that had hoped deals among only some of the WTO’s 164 members — known as “plurilateral” — could be a way to allow rule-making to develop among the willing without affecting others who are not ready.

Lack of consensus prevents “plurilateral” agreements from being part of the organisation’s official package of rules. That means WTO committees cannot be set up to oversee implementation and the agreements are not subject to legal proceedings under WTO dispute settlement.

Only three of the 36 non-participants have opposed adding this plurilateral agreement to the WTO’s rules. The US is a non-participant that has previously argued in favour.

Minutes show how domestic regulation deal in services schedules resolved

The January 24, 2024 meeting shows how talks with 54 WTO members led South Africa and India to drop their objections to commitments incorporating the plurilateral services deal

By Peter Ungphakorn
POSTED MARCH 6, 2024 | UPDATED MARCH 6, 2024

More details have emerged explaining what happened in talks between some participants in the plurilateral agreement on services domestic regulation and objectors India and South Africa, leading to the objections being dropped.

The story is told in the minutes of the multilateral (WTO-wide) working party handling domestic regulation in services. The minutes are still restricted but will be public in a few months. A leaked copy is here.

They show that South Africa and India had already told WTO members they would drop their objections several weeks before their formal announcements.

Objections dropped on services regulation say nothing about other plurilaterals

Faced with the impossibility of going to arbitration, India and South Africa were forced to drop their objections. They did so for countries that had amended their proposed commitments

By Peter Ungphakorn
POSTED FEBRUARY 28, 2024 | UPDATED APRIL 6, 2024

Most of the reports coming from the World Trade Organization’s Ministerial Conference in Abu Dhabi speak of the new plurilateral agreement on services regulation entering into force at the conference.

That was the line taken on the WTO website and in the participants’ press conference.

As a result, many media reports also used the term and missed crucial details about what was really going on, including the fact that it only applied to some participants in the deal.

Describing this as a new agreement “entering into force” is not wrong, but it is misleading.

India and South Africa have not dropped all their objections — a point that is missed in most of the reporting

What has happened is that participants in the new agreement on domestic regulation in services have attached the text of the agreement to their individual commitments (called “schedules”) in services, rather than to the general WTO rule-book.

This has avoided the need for WTO-wide consensus on adding to the rule-book an agreement among only part of the WTO’s membership, in the face of opposition from India and South Africa.

Even with this alternative route, India and South Africa still resisted. They raised objections about the proposed new schedules of commitments.

But here the rules are different. India and South Africa could not object forever. So they eventually dropped their objections on some of the schedules, which could then be certified, justifying the description of “entering into force”.

Plurilateral services commitments from 54 members certified, leaving 16 to go

India has joined South Africa in dropping its objections to some of the commitments incorporating the new plurilateral deal on domestic services regulation

(Original headline: “Plurilateral services commitments from 53 member certified, leaving 17 to go”.)

UPDATES April 5, 2024. The WTO Secretariat announced on April 4 that El Salvador’s revised services schedule had been certified because “the Secretariat has received no objections within 45 days as stipulated in the procedures”. The proposal was circulated on February 19, 2024.

In other words, India and South Africa never objected to El Salvador’s February 19 proposal, which seems to have gone straight to pasting in the domestic regulation disciplines, instead of linking to the reference paper. The following day, El Salvador circulated the supplement to its services schedule.

That meant 54 members’ schedules involving the plurilateral agreement had been certified, leaving 16 members’ schedules still uncertified (including the UK’s, facing post-Brexit objections from Russia). One more participant — Timor Leste — is not counted because it is still in the final stages of completing WTO membership.

March 28, 2024. South Africa dropped its objections to four more proposed revised schedules of commitments in services after they were corrected. We can assume that they continue the practice of pasting the new disciplines directly into the documents rather than simply link to the reference paper.

The four are from Albania, Canada, Georgia and South Korea, bringing the total of corrected documents so far to 31, from 58 members. (Chile’s was corrected twice; the UK’s is still uncertified because of post-Brexit Russian objections.)

India had not yet followed suit, so the four new corrected documents remain uncertified, and the certified total is unchanged

By Peter Ungphakorn
POSTED FEBRUARY 27, 2024 | UPDATED APRIL 15, 2024

At the last-minute India has dropped its objections, allowing a plurilateral agreement on streamlining domestic services regulations to be fully legal in 53 World Trade Organization members.

India’s announcement, circulated on the first day of the WTO’s Ministerial Conference in Abu Dhabi, follows South Africa’s almost two weeks ago

In a paper circulated on February 16, South Africa said it no longer objected to the 27 new commitments from 54 WTO members on services. India withdrew its objections on the same 27 revised lists (or “schedules”) of commitments in services.

This has allowed 26 revised schedules from 53 WTO members to be officially certified. One — from the UK — faces additional objections related to its departure from the EU (Brexit), but Britain said it would continue to apply the new disciplines anyway.

The schedules of another 17 participants in the domestic services regulation agreement have not been certified, apparently because they have not been amended to the satisfaction of India and South Africa.

Definitely. Maybe. Unlikely. Who knows? Issues on the WTO conference agenda

We’d better be prepared for little or nothing substantial when ministers meet in Abu Dhabi at the end of the month

By Peter Ungphakorn and Robert Wolfe
POSTED FEBRUARY 21, 2024 | UPDATED FEBRUARY 27, 2024

Two large but stubborn members may prevent ministers from agreeing on anything important at the World Trade Organization’s upcoming Ministerial Conference, and so the cynics are circling with doom-laden prophecies that “the WTO” is likely to fail again.

One is India, which is demanding the impossible in agriculture and threatening to block several other issues supported by a majority of WTO members. The other is the US, which is also — but more quietly — defying a majority of members on appeals in WTO dispute settlement.

Between them, they could ensure that the February 26–29 meeting in Abu Dhabi becomes yet another where WTO trade ministers kick dozens of cans down the road.

South Africa drops objections to 27 plurilateral services commitments

South Africa’s announcement covers commitments from 54 of the 71 participants in the plurilateral agreement on services domestic regulation

SEE UPDATE
Plurilateral services commitments from 53 members certified, 17 to go
AND
Experts: India, S.Africa unlikely to succeed in blocking WTO services deal
Technical note: types of plurilateral deals and adding them to WTO rules
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
Technical note: Participation in WTO plurilateral talks

By Peter Ungphakorn
POSTED FEBRUARY 17, 2024 | UPDATED FEBRUARY 22, 2024

Ten days before the World Trade Organization’s Ministerial Conference South Africa has dropped its objections to 54 WTO members implementing an agreement to streamline domestic regulation in services, leaving only India dissenting on these cases.

In a paper circulated on February 16, South Africa says it no longer objects to the 27 new commitments on services (in documents called “schedules”).

They are from 54 WTO members: Argentina, Bahrain, Chile, China, Costa Rica, the EU (including for its 27 member states), Hong Kong, Iceland, Israel, Japan , Kazakhstan, Liechtenstein, Mauritius, Moldova, Montenegro, New Zealand, North Macedonia, Norway, Paraguay, Peru, Singapore, Switzerland, Thailand, Ukraine, United Arab Emirates, the UK and the US.

These new commitments contain new rules on domestic regulations in services. They are the result of “plurilateral” negotiations — meaning they were talks among only part of the WTO membership — concluded in December 2021.

Altogether 71 WTO members are participants in the deal but so far only 27 schedules from 54 members have been corrected to South Africa’s satisfaction.

Chair’s draft pushes WTO farm talks deadlines back to next conference

Negotiators are meeting almost daily as they work through the Türkiye ambassador’s draft for this month’s Ministerial Conference

PREVIOUS STORY
‘Mission impossible’ and ‘mission essential’ collide in WTO farm talks

SEE ALSO
WTO ministers’ meeting — no interaction, no movement, just speeches
Texts: state of play in WTO farm talks and the crisis-meeting invitation
and all stories on this topic (tagged “food stockholding”)

UPDATE: The draft prepared for the February 26–29, 2024 Ministerial Conference was circulated on February 16. It still pushed the deadlines back to the next conference, but with options throughout: members “shall” agree by then or they “agree to work towards” the target.

The deadlock remained over whether price support in food security stockpiling (PSH) should be a stand-alone decision at this conference or resolved with all the other topics by the next one.

See the full update below

Posted by Peter Ungphakorn
FEBRUARY 5, 2024 | UPDATED FEBRUARY 18, 2024

World Trade Organization agriculture negotiators are spending the first two weeks of February scrutinising a draft text for the WTO’s upcoming Ministerial Conference.

In a meeting on January 30, 2024 they accepted the draft as the document to work on for the February 26–29 conference in Abu Dhabi — the WTO’s 13th Ministerial Conference, called “MC13” by insiders.

It was prepared by the talks’ chair, Ambassador Alparslan Acarsoy of Türkiye.

The 5-page draft is detailed, but for most issues it postpones any resolution until the Ministerial Conference after Abu Dhabi — “MC14” — normally within two years.

However, one issue still threatens to sink the whole effort. This is about finding a long-term solution for the present short term fix for over-the-limit subsidies used to buy into food security stocks (explained here).

Members disagree on whether this should be a single-issue decision or part of a package covering the whole of domestic support. (More below.)

A WTO website news story summarises its content in detail.

In General Council India alone opposes investment deal as a WTO agreement

Overwhelming support for 117-member deal to be a formal WTO agreement, even among non-participants

THIS UPDATES AND REPLACES
“118 members want investment facilitation deal to be formal WTO agreement”
(from December 13, 2023)

SEE ALSO
Comment: on India’s claim that a plurilateral WTO deal is ‘illegal’
WTO investment facilitation text completed but still faces uphill battle
Technical note: types of plurilateral deals and adding them to WTO rules
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
Technical note: Participation in WTO plurilateral talks
●
General Council minutes from this meeting and in general (published a few months after the meeting)
All articles tagged “investment facilitation”

By Peter Ungphakorn
POSTED DECEMBER 18, 2023 | UPDATED MAY 10, 2024

India says it will block adding to the official WTO rule-book a new investment facilitation agreement among over 70% of the World Trade Organization members, even though it was the only country to speak against the request in the organisation’s General Council on December 15, 2023.

India’s opposition has implications beyond this particular deal, which is backed by 117 developed and developing countries such as China, the EU, Bolivia, Chad and Laos.

It makes investment facilitation a test case for all rule-making negotiations among subsets of the membership.

The other subjects that could potentially line up to follow investment facilitation into the WTO rule-book include e-commerce and digital trade, plastics pollution, and fossil fuel subsidies, all involving only part of the membership.

WTO members are struggling to conclude several negotiations because of insoluble differences preventing them from reaching consensus agreement.

This means existing agreements are lagging behind the latest developments in global trade — for example in digital trade or sustainability.

Many governments now consider the best way to modernise WTO rules is to try to reach agreement among “the willing” first. The rest of the membership can join later when they are ready.

But to insert an agreement among only the willing into the rule-book still needs consensus support from the whole membership, including non-participants.

If India (previously also supported by South Africa and Namibia) continues to oppose anything short of a fully multilateral agreement, this would prevent the deal from becoming a proper WTO agreement.

Now replaced: 118 members want investment facilitation deal to be formal WTO agreement

One way or another it needs a consensus decision by WTO members, in the face of some strong opposition

This article has been updated and replaced by
In General Council India alone opposes investment deal as a WTO agreement
(December 18, 2023)

Image credits:
Main image | Michelle Henderson, Unspalsh licence

What’s left to resolve in WTO fisheries subsidies talks after deadline missed

The fate of the talks now rests on intensive negotiations in four weeks from mid-January with some consultations before then. Are the differences still too numerous to settle in that time?

By Peter Ungphakorn
POSTED DECEMBER 12, 2023 | UPDATED DECEMBER 13, 2023

The chair of the World Trade Organization’s fisheries subsidies negotiations and Iceland’s ambassador, Einar Gunnarsson, admitted on on December 8, 2023, that there would not be an agreed text by the end of the year, despite a commitment from senior officials six weeks earlier that there would.

He and WTO Director-General Ngozi Okonjo-Iweala told ambassadors at the end of the final “fish week” of the year that they still hoped that the differences could be settled by the Ministerial Conference in February next year — although the next talks are now not scheduled until mid-January.

They noted that delegates showed they were determined to reach agreement, and were encouraged by various proposed amendments to the chair’s September 4 draft designed to bridge the differences.

Texts on the table (details below) show that members diverge on a wide range of topics, particularly whether the biggest players should face extra scrutiny and if so how they would be identified, and the details of exemptions for developing countries.