WTO decisions-consensus-voting

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.

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.

Comment: on India’s claim that a plurilateral WTO deal is ‘illegal’

Participants want to add their investment facilitation agreement to WTO rules, but India objects, calling it ‘illegal’, ‘non-mandated’, ‘non-multilateral’ and a ‘violation of the WTO framework’

SEE ALSO
In General Council India alone opposes investment deal as a WTO agreement
Technical note: types of plurilateral deals and adding them to WTO rules
What the agreement includes
●
General Council minutes from this meeting and in general (published a few months after the meeting)
All articles tagged “investment facilitation”
All articles tagged “Plurilaterals”

By Peter Ungphakorn
POSTED JANUARY 12, 2024 | UPDATED MAY 10, 2024

India has circulated a strongly-worded statement prepared for the World Trade Organization’s General Council on December 15, 2023 on why it opposes bringing the new plurilateral agreement on Investment Facilitation for Development (IFD) into the package of WTO rules.

It describes the whole process as “illegal”, without any mandate and against the multilateral WTO framework. Worse, India says, the investment facilitation talks defy a “negative mandate” because of previous consensus decisions against the move.

Why is this important? Two words: WTO reform.

But is that legalistic rejection valid? Some lawyers suggest the argument is political even though it is dressed up as legal.

And “BS” is how one described the claim that negotiations can only be launched in the WTO by a consensus mandate.

WTO investment facilitation text completed but still faces uphill battle

One way or another it needs a consensus decision by WTO members, in the face of some strong opposition. (Now includes the final version of the proposed agreement)

UPDATE (October 16 and December 13–18, 2023)
In General Council India alone opposes investment deal as a WTO agreement

SEE ALSO
Comment: on India’s claim that a plurilateral WTO deal is ‘illegal’
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
●
All articles tagged “investment facilitation”

NOTE: An error has been removed from this. The possibility of voting under WTO Agreement Article 10 (on amendments), does not apply to amending Annex 4 of the agreement. Only Article 10.9 (requiring consensus without the option of voting) and Article 10.10 (other requirements) apply

By Peter Ungphakorn
POSTED JULY 7, 2023 | UPDATED JANUARY 26, 2024
(Developments after July 2023 are in italics. Now includes the final version of the proposed agreement)

Negotiators from over two thirds of the World Trade Organization’s members say they have reached agreement on a final text on “investment facilitation for development”, but they still have to persuade the rest of the membership either to join them or to stand aside so the deal can be added to WTO rule book.

The agreement would make investment conditions easier, more predictable and more transparent, with a focus on sustainability and development. (In November 2023 a final revision was circulated, replacing the version of July 2023, which still left some options open. See this 41-page explanation.)

“Despite the lack of high-level fanfare, this agreement represents important progress,” former WTO Deputy Director-General Alan Wolff wrote after the deal was announced on July 6, 2023.

He said it was “remarkable for several reasons” such as having no constraints on governments’ investment policies, being pro-development and focusing on process with positive encouragement.

“Participants firmly believe that the proposed […] agreement will contribute to creating a more transparent, efficient, and predictable environment to facilitate not only more investment, but also more sustainable investment, as well as to anchor and support […] participants’ domestic, bilateral, and regional reform efforts,” said the talks’ coordinators, ambassadors Sofía Boza (Chile) and Jung Sung Park (Rep. Korea), when they announced the deal had been struck on July 6, 2023.

The text “is the result of three years of intense text-based negotiations amongst over 110 participating WTO members at all levels of development, held in a transparent and inclusive manner since their launch in September 2020,” they said.

The whole exercise has taken five and a half years from the original joint statement issued by 42 WTO members at the Buenos Aires Ministerial conference in December 2017.

The aim is to “improve the investment and business climate, and make it easier for investors in all sectors of the economy to invest, conduct their day-to-day business and expand their operations”, the WTO says.

Provisions addressing ‘Responsible Business Conduct’ and ‘Measures Against Corruption’ … [break] new ground within the WTO
— Ngozi Okonjo-Iweala, WTO Director-General

The deal would include helping developing and least-developed countries participate more in global investment flows, in some cases with aid.

“The initiative does not cover market access, investment protection and investor-state dispute settlement,” the WTO clarifies.

WTO Director-General Ngozi Okonjo Iweala said: “The text also contains provisions addressing ‘Responsible Business Conduct’ and ‘Measures Against Corruption’ — again breaking new ground within the WTO.”

Clapping in the successful conclusion of the plurilateral negotiations of the Investment Facilitation Agreement by 112 @wto members! And preparing for the next phase of multilateralization! A fantastic achievement by members. Thanks to coordinators Ambs Boza of Chile and Park of… pic.twitter.com/537PcDBORg
— Ngozi Okonjo-Iweala (@NOIweala) July 6, 2023

Participants said they would spend the rest of the 2023 and until the next Ministerial Conference in February 2024 on a major campaign to bring the rest of the membership onside, the talks’ coordinators said (see below).

The task could prove trickier than the past three years of negotiations on the text itself. The biggest and apparently unavoidable challenge will be to allow the agreement and its provisions to pass a consensus decision, meaning none of the WTO’s 164 members block it.

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

It would be impossible for India to make a case for what ‘compensation’ it is owed in return for more commitments undertaken by others — Hamid Mamdouh

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.

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 participants are counted, WTO Deputy Director-General Anabel González says.

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

The WTO director-general says she discouraged negotiators from trading give-and-take across issues

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.

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

Brand new, decades old, or in between? Exclusive or applying to all members? Proper negotiations or just talk? Which is which, and what are the subjects?

By Peter Ungphakorn
POSTED JANUARY 3, 2022 | UPDATED APRIL 13, 2024

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.

‘Plurilateral’ WTO services deal struck after breakthrough text released

Creating new rules without officially calling them ‘rules’ solves an immediate problem but leaves long term questions

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.

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

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.