Experts: India, S.Africa unlikely to succeed in blocking WTO services deal

By Peter Ungphakorn
POSTED FEBRUARY 7, 2023 | UPDATED FEBRUARY 9, 2023

India and South Africa are questioning the right of 62 World Trade Organization (WTO) members to implement their agreement to streamline domestic regulation in services, but experts question whether the two can prevent the deal from becoming legal.

The deal was concluded in December last year. Since then, most of the participants have submitted what they have each agreed to do, in the form of draft revised “schedules” (or lists) of commitments in services.

Altogether there are 35 schedules of commitments covering the 62 members (counting the EU as 28), meaning 8 of the 70 participants have not yet sent in theirs. (See details below.)

Estimates by the WTO and Organization for Economic Cooperation and Development (OECD) suggest the agreement could potentially save trade costs by about US$150bn annually. The 62 WTO members that have submitted new draft schedules account for about 89% of world services trade — 92.5% if all 70 are counted, WTO Deputy Director-General Anabel González says.

By putting the deal in individual members’ schedules of commitments, the participants have avoided the need for consensus approval by the whole WTO membership.

Have we just seen the funeral of the WTO ‘single undertaking’?

See also
WTO members achieve breakthrough, but the tough part is what happens next | The successful WTO Conference saw one big failure: agriculture | Our scorecards

By Robert Wolfe
POSTED JUNE 21, 2022 | UPDATED JUNE 21, 2022

Observers of multiple World Trade Organization (WTO) ministerial conferences felt gloomy early during the June 12–17 meeting, when Director-General Ngozi Okonjo-Iweala warned against mingling the issues.

She was reported to have urged ministers to make trade-offs within the same issue rather than across the package of issues.

In an interview with the Financial Times’ Alan Beattie (paywalled) she confirmed her approach.

“Sometimes, all this leveraging and cross connections between outcomes I think in the past has led to the failure to achieve anything, because then everything just doesn’t work and collapses. I was really determined from the get-go that wasn’t going to happen and I was trying to discourage members from linking one thing to another,” she said.

I was trying to discourage members from linking one thing to another

— Ngozi Okonjo-Iweala,
Financial times

Those of us who analyse the WTO have a mental model of how members could reach agreement. When the process seems too slow, or it fails, analysts think: if the Secretariat or members could do it differently, then the obstacles could be overcome. This reasoning is counterfactual, meaning something that has not happened but might happen under different conditions.

Two last-minute agriculture proposals land as WTO conference approaches

By Peter Ungphakorn
POSTED JUNE 3, 2022 (REPLACING THIS ORIGINAL PAGE) | UPDATED JUNE 3, 2022

Less than two weeks before the re-scheduled World Trade Organization (WTO) Ministerial Conference, two new proposals were circulated on May 31, 2022, on the most difficult subject in the agriculture negotiations — including the first from a “non-demandeur”.

The two proposals are from opposite sides on how to deal with domestic support in developing countries’ stockholding programmes for food security.

The debate in a meeting of WTO ambassadors two days later showed how far apart members still are on this with only 10 days to go before their ministers meet in Geneva. Members are now holding round-the-clock meetings to prepare for their June 12–15 Ministerial Conference

Two last-minute agriculture proposals land as WTO conference approaches

By Peter Ungphakorn
POSTED JUNE 1, 2022 | UPDATED JUNE 1, 2022

Less than two weeks before the re-scheduled World Trade Organization (WTO) Ministerial Conference, two new proposals were circulated on the most difficult subject in the agriculture negotiations — including the first from “non-demandeurs”.

The two proposals are from opposite sides on how to deal with domestic support in developing countries’ stockholding programmes for food security.

… This has been updated and re-posted here …

Can a WTO member be expelled? No. But …

By Peter Ungphakorn
POSTED MARCH 23, 2022 | UPDATED MARCH 26, 2022

Can a member of the World Trade Organization (WTO) be expelled? The short answer is no. There is no legal means of doing that.

The question arises because of a number of calls to expel Russia, to suspend its membership or to suspend its ability to act in the WTO, in response to its invasion of Ukraine.

Those three are not exactly the same. The first two — expulsion or suspending membership — are clearly legal issues. They require decisions by the WTO’s membership.

The response from almost all experts in WTO trade law is simple: there are no provisions in the WTO agreements that would allow expulsion or suspension.

Ukraine invasion—what Russia and Belarus face in the WTO system: so far

This blog post contains a list of actions that countries have taken against Russia and Belarus. It will now only be updated occasionally. The point was to examine how they work, where WTO decisions might be needed and the implications, and how they relate to WTO provisions such as non-discrimination (MFN) or the security exceptions. That should be clearer now.

See these sources for closer monitoring:

Global Trade Alert

A considerably longer list of sanctions announced against Russia is available at Global Trade Alert. Many are outside the WTO system. Some may be within the system, such as export restrictions on dual-use products and restrictions on shipping services (but not air traffic rights). Russia’s retaliation is here.

Global Trade Alert was originally set up by Simon Evenett and his team at St Gallen University, Switzerland. It is now run by an independent foundation.

PIIE

Chad Bown of the Peterson Institute for International Economics (PIIE) has created a timeline that tracks all the actions taken by various countries on all sides: Russia’s war on Ukraine: A sanctions timeline.

A number of other sources are available. This one (details paywalled) is Europe-centred.

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By Peter Ungphakorn
POSTED MARCH 4, 2022 | UPDATED MAY 10, 2022 (SEE ALSO ENTRY DATES)

This is a summary of actions taken or proposed so far against Russia within the WTO system. Some are also against Belarus, which is not a WTO member.

They are deliberately described as “within the WTO system” and not “in the WTO” — or worse “by the WTO” — to avoid confusion.

Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’

By Peter Ungphakorn
POSTED JANUARY 3, 2022 | UPDATED MAY 26, 2023

As World Trade Organization (WTO) members struggle to reach consensus on numerous issues, many see talks among “the willing” as the way to modernise the organisation and in many cases to update its trade rules. But the approach is controversial.

These talks and resulting decisions among only some WTO members are called “plurilateral” to distinguish them from “multilateral” activities and agreements among the WTO’s whole membership.

Hamid Mamdouh — WTO reform imperative: a possible way forward

Posted by Peter Ungphakorn
POSTED NOVEMBER 9, 2021 | UPDATED NOVEMBER 9, 2021

This is a short proposal on World Trade Organization (WTO) reform by Hamid Mamdouh, former director of the WTO Secretariat’s Trade in Services Division and a recent candidate to be WTO director-general.

Mamdouh proposes members start from overall principles and cover all three of the WTO’s main functions:

• implementation in the WTO councils and committees (he calls this “oversight”, a reference to “oversee” in Article 4.5 of the WTO Agreement, which defines their functions)
• negotiations
• dispute settlement including the crisis in the appeals stage.

This should be done, he suggests, in a new working party to start work in the new year.

He is not alone. The EU Commission and Council have also floated the idea of a working group on WTO reform in a trade policy statement presented to the European Parliament on February 18, 2021 (page 18 of this). The EU is understood to be discussing the proposal privately with other delegations in Geneva.

‘Plurilateral’ WTO services deal struck after breakthrough text released

Skip this update and go straight to the article

This article was revised in December 2021, but follows the structure of the original version from September 2021.

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UPDATE, DECEMBER 3, 2021:

The deal was eventually announced in Geneva on December 2, 2021, even though the Ministerial Conference had been postponed.

A lightly revised version of the September “reference paper” was released along with a list of the 68 participating members (counting the EU as 28) that had submitted “schedules” (lists) of commitments to streamline domestic regulation. These were combined into a single declaration.

The legally binding part of the deal is those commitments, which will be added to the schedules of commitments participating countries already attached to the WTO’s General Agreement on Trade in Services.

The reference paper itself will not be an official WTO agreement, but the new schedules of commitments will refer to the principles in the reference paper, making those commitments legally binding in practice.

By December 2, 2021, the 68 participants were:

Albania; Argentina; Australia; Austria; Bahrain; Belgium; Brazil; Bulgaria; Canada; Chile; China; Colombia; Costa Rica; Croatia; Cyprus; Czech Republic; Denmark; El Salvador; Estonia; European Union; Finland; France; Germany; Greece; Hong Kong, China; Hungary; Iceland; Ireland; Israel; Italy; Japan; Kazakhstan; Korea, Republic of; Latvia; Liechtenstein; Lithuania; Luxembourg; Malta; Mauritius; Mexico; Moldova, Republic of; Montenegro; Netherlands; New Zealand; Nigeria; North Macedonia; Norway; Paraguay; Peru; Philippines; Poland; Portugal; Romania; Russian Federation; Saudi Arabia, Kingdom of; Singapore; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Chinese Taipei; Thailand; Turkey; Ukraine; United Kingdom; United States; Uruguay

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See also:
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’ | Participants in WTO plurilaterals | WTO news story | Comprehensive coverage on the independent website on WTO plurliaterals | Hamid Mamdouh on the legal options for adding another plurilateral agreement (investment facilitation) to the WTO rulebook.

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By Peter Ungphakorn
POSTED SEPTEMBER 29, 2021 | UPDATED DECEMBER 6, 2021

Almost 70 members of he World Trade Organization (WTO) announced a deal to discipline domestic regulation of services on December 2, 2021, two months after they agreed on the rules they would apply.

The final text saw only minor adjustments compared with the original announced on September 27, 2021, and described as a breakthrough allowing the final deal to be struck.

The September announcement paved the way for the participants to agree on the complete package by the Ministerial Conference (November 30 to December 3 this year), the WTO said. At that time the talks’ participants were officially had 65, but actually 66 WTO members. This has now risen to 68 (or officially 67)

All that remained after the September 27 announcement was for the participants to go through each other’s individual commitments on how the new disciplines would be applied, the WTO said.

India and South Africa pour cold water on alternative approach to WTO talks

SEE ALSO
Explainer: The 18 WTO plurilaterals and ‘joint-statement initiatives’
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 10, 2022

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 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.