WTO: 2012 NEWS ITEMS

WTO PUBLIC FORUM: 24—26 SEPTEMBER 2012

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THE WTO’S NEWS COVERAGE OF THE PUBLIC FORUM ON ITS WEBSITE AND SOCIAL MEDIA PAGES SUCH AS FACEBOOK AND TWITTER IS NEWS ITEM IS DESIGNED TO HELP THE PUBLIC FOLLOW PROCEEDINGS AND IS NECESSARILY SELECTIVE.

MORE COMPREHENSIVE ACCOUNTS OF THE SESSIONS WILL BE PUBLISHED ON THE PUBLIC FORUM PAGES SOON AFTER THE EVENT.

WHILE EVERY EFFORT HAS BEEN MADE TO ENSURE THE CONTENTS ARE ACCURATE, IT DOES NOT PREJUDICE MEMBER GOVERNMENTS’ POSITIONS.

  

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Public Forum 2012
Programme

  

WTO Deputy Director-General Rufus Yerxa, moderator of the panel, said that “for many governments, employment is now the top priority — in this context, the question of the role of trade is of crucial importance”.  

He said that many WTO members are “expressing concern that political pressures to preserve jobs may fuel protectionist actions, and that these actions may actually jeopardize the prospects for longer term growth”.

His questions to the panellists included: “What is the effect of trade on jobs in developing and developed countries? What complementary policies are needed to ensure that trade reform actually translates into economic growth, high productivity and more jobs? How can the multilateral system contribute to boost growth and employment?”

Mr Alberto Trejos, Professor of Economics at INCAE Business School and former Trade Minister of Costa Rica, cautioned against “overreacting” to the potential of trade to influence the number of jobs. He said that where trade can make a difference is on the quality of jobs, especially if complemented by sound domestic policies. Additionally, a good trade policy can help in the acceleration of job creation.

Mr John Evans, General Secretary of the Trade Union Advisory Committee to the OECD, said that one factor in the current crisis was an imbalance between growth and social policies, as growth was not matched by an equitable distribution of its gains. Even worse, now we have collective austerity measures, weakening collective bargaining and lowering wages. The question is how to make better trade policies and reach a better globalization balance.

Mr Yogendra K. Modi, board member of the International Organisation of Employers and  Chairman and CEO of  Great Eastern Energy Corporation, said that India saw the benefits of trade when its economy was opened in 1991 and growth expanded rapidly. Countries must be competitive, and imports are as important as exports. Multilateral agreements are essential. In the context of the Doha Round, to a businessman, the policy of agreeing either to everything or to nothing makes no sense. Smaller, weaker countries must be included in all discussions. Blaming the WTO or trade for a country’s internal problems is wrong – one can only help oneself.

Senator Ricardo Lagos of Chile said that trade can cushion the effects of the crisis on jobs by generating growth, which, in turn, leads to job creation. However, in most cases, there is a missing link: how do you integrate domestic and labour policies with trade policy so that more trade effectively leads to more jobs?

Mr Stephen Pursey, Director, Policy Integration Department and Senior Advisor to the ILO Director-General, said that since the onset of the crisis, global unemployment has risen by around 30 million to over 200 million, and that 75 million of the unemployed are young women and men. He added that ILO research had found that the trade contraction during the global crisis has resulted in the loss of nearly 4 million jobs in India and about 900,000 in South Africa. This was the result of declines in exports to the EU and the US between early 2008 and early 2009. He added that there are about 60 million fewer jobs globally than in 2007.

He said an outright global recession is likely unless the current policy thrust in the largest economies changes. The gains from globalization are not distributed equally, and some workers and firms may lose out in the short and medium term. The Nordic economies, which have been open for the longest, have the most extensive systems of social protection, developed before these economies were rich. Education and Aid for Trade are also important. What is needed is the integration of trade and job strategies in a major way but this would not be easy to achieve in the present macroeconomic situation.

Session 30: Emerging Powers, National Interests and the Future of Multilateralism

The session provided an opportunity for representatives of the BRICS (Brazil, Russia, India, China and South Africa) and Turkey to pinpoint their respective interests in the current multilateral system and the challenges that their countries are facing. Most speakers made a plea in favour of multilateralism but called for a change in its current format to encompass new issues. The conclusions revealed that a common agenda for the BRICS is yet to be outlined. 

Most panellists stressed the importance of multilateralism and the crucial role that the WTO plays in global governance and in ensuring that the proliferation of preferential trade agreements (PTAs) does not affect BRICS economies. Meanwhile, the trend in both Turkey and South Africa is regional economic integration. Among the arguments against regionalism, Dr Lin Guijun, Vice-President of the University of International Business and Economics, pointed out its inability to protect China’s trade interests since China is now aiming for increased access to global markets. Dr Umit Ozlale, Director of the Economic Policy Research Foundation of Turkey, said that continuing to reap the benefits of customs unions has become a challenge for Turkey amid the proliferation of free trade agreements (FTAs).

Despite the overall support for multilateralism, the panel members rejected its current format, arguing that it generates imbalances and inequalities and lags behind in terms of development objectives. According to Mr Pedro da Motta Veiga,  Director of CINDES, and Mr Bipul Chatterjee, Deputy Executive Director of CUTS International, multilateralism should consolidate and improve its existing set of rules and incorporate new issues such as climate change and food security. All speakers agreed that multilateralism must be redefined to deal with current global threats and one panellist opined that multilateralism is in crisis, as shown by the recent global financial crisis and the deadlock facing the negotiations.

This “new multilateralism” would be to a large extent shaped to address the domestic challenges facing the BRICS and Turkey. These include: fulfilling development objectives including poverty reduction, increasing competitiveness and productivity in manufacturing and the services sector, enhancing coordination between the private and public sector, and protecting foreign exchange assets.

On the question of whether a common BRICS trade agenda can emerge, it was stated that for now, the BRICS are signatories to a collection of bilaterals. Future challenges include agreeing on trade data, trade facilitation, small and medium enterprises development concerns, investment, cooperation on technology transfer, intellectual property and finance issues. On a possible BRICS common strategy for Africa, Ms Catherine Grant, Programme Head at the South African Institute of International Affairs, said that it depends on how South Africa plays its role as it is often pulled in to being Africa’s representative in the international arena. While there is room for coalitions among emerging powers, she argues, whether they will influence the multilateral space remains to be seen.

 

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Session 31: Is a Multilateral Approach to Fair Trade Possible? The Parliamentarian Point of View

The session opened with remarks from Mr Mbuku Laka, Vice President of the Assemblée Parlementaire de la Francophonie (APF) Commission on Cooperation and Development, who gave his perspectives on the development of fair trade in his home country, the Democratic Republic of the Congo (DRC), as well as that of the APF in exploring it as an option in francophone Africa. His brief presentation covered two overarching themes: the difficulties that a heterogeneous approach to fair trade poses to African countries; and the need to support and protect “food sovereignty”.

According to Mr Laka, African countries such as the DRC face great difficulties in developing fair trade and organic crops. As standards are not harmonized, producers find it costly to take the necessary measures to become certified. These challenges were echoed by an NGO representative working with farmers in West Africa. Mr Laka suggested a new approach was needed to ensure standards were more accessible, including efforts to further institutionalize these systems.

Mr Laka regularly referred to “food sovereignty” as a major concern for his country and others in Africa. He said that rapid liberalization of agricultural markets can lead to insecure conditions for countries like the DRC to meet its own needs. He suggested that fair trade could be used as a way to give producers greater income, thereby ensuring the means to achieve “food sovereignty”. 

Mr Germinal Peiro, Member of the National Assembly of France, focused his presentation on the French consumer experience with fair trade and organic products.  He echoed Mr Laka’s call for “food sovereignty” and the need for countries to be able to feed their own populations.  Mr Peiro highlighted the environmental concerns that agriculture faces and also the role it plays in exacerbating the degradation of habitats, particularly through the contamination of waterways. He called for a more locally based form of food production and consumption in light of dwindling fossil fuel supplies, while also underlining the need for more accurate and transparent labelling systems.

As the moderator, Mr Hervé Cronel, Special Adviser in the Cabinet of the Secretary-General of la Francophonie, fielded the audience’s questions. One participant claimed that organic agriculture actually harmed the environment when compared with conventional methods. Mr Peiro defended organic agriculture, particularly its ability to reduce chemical run-off into waterways, while the moderator cited Brazil as an example of supporting both large-scale and small-scale farming techniques. 

 

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Session 32: Managing Conflict in the WTO without Formal Disputes: Enhancing the Use of Notifications and Specific Trade Concerns

In this session, transparency and surveillance were discussed as forms of conflict management in international trade, implicitly arguing that the success of regular WTO work demonstrate that multilateralism is not in crisis.

The panel rejected the conventional notion that WTO rules evolve only in periodic negotiation rounds, in between which trade rules take root through the dispute settlement system. This session viewed the work of committees as a third pillar of WTO activities. Using the detailed information available on notification and transparency mechanisms in the context of technical and sanitary regulations under the Technical Barriers to Trade (TBT) Agreement and the Sanitary and Phytosanitary (SPS) Agreement, panellists examined how transparency measures work, the way they are utilized by members, and their contribution to conflict management.

“Notification” finds expression in varying forms under WTO agreements, creating reporting obligations for actions affecting other WTO members. Within the great volume of notifications to committees, “specific trade concerns” (STCs) are raised in SPS and TBT committees by members on matters of special interest; similar but less elaborate procedures exist in other committees. Based on the extremely small fraction of such matters reaching formal dispute settlement, the discussion turned to the role of transparency in resolving potential disagreements. Data compilations of STCs and notifications under the SPS and TBT Agreements showed that almost one-third of STCs reached “resolution” under the SPS, while roughly one-fifth were resolved under the TBT. These findings were qualified, however, by definitional caveats and analytical assumptions, and the panel questioned the “resolution” of matters by posing alternative explanations to the lack of formal adjudication involving political considerations between and within member states.

While it was agreed that notifications enhance transparency, panellists acknowledged that what is not notified remains untransparent. In this respect, “reverse notification” by members of undisclosed measures was mentioned and the panel explored the differing incentives for notification and concealment between agreements, specifically mentioning subsidies. Ultimately, the topic was taken to illustrate the need for a change in perspective towards the WTO from negotiation and dispute settlement, and the need for more resources in capitals and Geneva devoted to committee review processes. 

 

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Session 33: Trade and Jobs

see above

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Session 34: The Role of Non-State Actors in WTO Dispute Settlement: Fostering Effective Public Private Collaboration in Support of Global Trade Governance

The session revolved around the indirect participation of non-state actors (NSAs) in intergovernmental WTO dispute settlement proceedings. The panel highlighted NSAs’ contribution, and agreed that NSA participation should be further enhanced through increased transparency and access.

The panel brought together representatives of different NSAs and analysed the contribution of NSAs to WTO dispute settlement, placing a special focus on private actors such as business associations, traders or specific domestic interest groups. The debate hinged upon private actors’ contribution, which ranges from the identification of the trade barrier and requesting the initiation of a dispute to the defence of the strategic interests of the WTO member involved in litigation or in implementing rulings.

Discussants examined the different channels through which NSAs intervene: direct channels through legal and diplomatic means; or indirect channels, such as lobbying and the use of the media. The discussion revolved around the strategic considerations that come into play when choosing direct or indirect channels. While governments produce norms such as subsidies which sometimes impair business and trade, they are also part of a company’s customer portfolio.

Companies’ integration in global supply imposes the need for dealing with governments in a manner that goes beyond the protection of domestic interests. Therefore, private companies are more likely to use indirect channels of access to WTO litigation and work through trade coalitions or sectoral associations in order to avoid being singled out as the company behind a WTO dispute in the event of retaliation. Despite the fact that companies may not use proactively the WTO dispute settlement mechanism, it was emphasized that they nonetheless highly value the fact that countries in which they invest form part of the WTO membership. This implies that all WTO commitments are legally enforceable via the dispute settlement mechanism.

The panel highlighted the particular challenges faced by developing countries involved in a dispute when it comes to meeting demands of different NSAs, such as increasing production, foreign direct investment and employment. A further challenge is to ensure that the media and NGOs conduct adequate and timely press coverage at all stages of the proceedings. Adequate information dissemination has an impact on civil society’s understanding of a dispute. The discrepancy between the systemic interest of the party involved in the dispute in bringing the measure into conformity and the business interest geared towards an “immediate” settlement for the past damage done is also one issue that needs to be carefully managed by governments at the implementation stage. Governments have to educate private actors about the aims and objectives of WTO dispute settlement. 

The panel shared the view that NSA participation constitutes an effective tool to defend members’ interests and that it should be further enhanced through increased transparency and access to dispute settlement proceedings.

 

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Session 35: The Agreement on Subsidies and Countervailing Measures: Past, Present and Future

The session discussed the various challenges for the WTO’s subsidies disciplines in the future. Discussion revolved around the need to ensure that WTO members have adequate policy space to address political and economic issues, such as climate change, macroeconomic emergencies and the interests of developing countries, while also ensuring that rent-seeking through protectionism is curtailed. In this context, participants asked whether it was necessary to revise the Agreement on Subsidies and Countervailing Measures (SCM), to leave it to the dispute settlement system to grapple with the difficult policy issues, or whether the attention of participants in the system should shift to meaningful discussions through the SCM Committee.

Mr Gary Horlick, from the Law Offices of Gary N. Horlick, provided a brief overview of the development of the subsidies disciplines in the Tokyo Round Code and the Uruguay Round SCM Agreement. He noted that the SCM Agreement appears to have weathered the challenge of the global financial crisis comparatively well, in the sense that governments did not resort to the use of explicit export subsidies. However, he acknowledged that the SCM Agreement was not as successful in restraining the use of import substitution subsidies He also noted that, although the aftermath of the global financial crisis resulted in government bail-outs around the world, only in isolated cases has such action been challenged by other WTO members.

Dr Sadeq Bigdeli, Senior Lecturer in Law at the University of Waikato, New Zealand, discussed the changing ways in which subsidies have been imagined over time, which he saw as being linked to changing ideological notions as to the proper role of government in a market economy. He argued that the jurisprudence on the meaning of “benefit” fails to acknowledge the role of government in addressing market failure and may also run the risk of encouraging rent-seeking behaviour in the form of unwarranted use of countervailing measures. In his view, the objective of the SCM Agreement should be to strike a balance between legitimate government activities and the curtailment of protectionism.

Dr Luca Rubini, Reader in Law at Birmingham Law School, posed the question whether, assuming that public support satisfying certain conditions is desirable in the area of climate change, the SCM Agreement gives WTO members sufficient policy space to pursue climate change measures that are legitimate from a policy and economic perspective. He pointed to several respects in which the interpretation of terms in the SCM Agreement is unclear: e.g. how to determine whether tax and regulatory incentives are covered by the SCM Agreement, how to approach the question of “benefit” in particular situations where markets are distorted or the purpose of the government intervention is to correct market failure, and the rules on specificity. As to the future regulation of climate change subsidies, he hoped to see a revival of the idea that certain subsidies that satisfy agreed conditions should be permitted even if they cause trade distortions as well as institutional reforms promoting better transparency. He argued that WTO members should assume responsibility for these issues, and that leaving their resolution to the dispute settlement system was not optimal. 

Professor Dukgeun Ahn, Professor of International Trade Law and Policy at the Graduate School of International Studies, Seoul National University, noted that the provisions concerning countervailing measures in the SCM Agreement essentially permit an importing member to pass judgment on the policy actions of the exporting member. This can be problematic where governments provide indirect subsidies in macroeconomic emergencies, as demonstrated by the countervailing duty action taken by the United States, the European Union and Japan against Hynix following the Asian financial crisis. In his view, the SCM Agreement disciplines were not devised for macroeconomic emergencies and, given the likelihood that such emergencies will become more commonplace, this poses challenges for the future. 

 

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Session 36: Trade and Public Policies: NTMs in the 21st Century

The session presented an interdisciplinary analysis of non-tariff measures (NTMs). NTMs and services regulation are the main topic of the World Trade Report (WTR) 2012. Starting from the findings of the WTR 2012, the panellists discussed the main challenges for international cooperation and trade raised by NTMs.

The analysis in the WTR 2012, presented by Mr Cosimo Beverelli, WTO, highlighted several critical factors regarding NTMs:

  • NTMs have two purposes: they meet a legitimate policy objective and they restrict trade. From this dual nature arises the need for tight legal analysis. Ms Gabrielle Marceau, WTO, presented the legal techniques to assess the legitimacy of public policy objectives. The WTO’s Technical Barriers to Trade (TBT) Agreement and the WTO Sanitary and Phytosanitary Measures (SPS) Agreement represent a more flexible system than the GATT’s closed list of legitimate objectives.
  • Transparency of NTMs is an issue. Professor Robert Wolfe, Queen’s University, Canada, detailed the need for transparency from governments (to implement surveillance), firms (to overcome uncertainty which acts as a gigantic tariff for small firms) and analysts.
  • Private standards proliferation. Ms Gretchen Stanton, WTO, documented how the private sector is not moving towards harmonization and pointed out the difficulties that this trend poses for developing countries’ exporters. She argued how the rationale behind proliferation is the need for firms to differentiate. She stressed the positive side of private standards: their very prescriptive nature may help a new exporter to enter the international market.
  • Regulation of NTMs. Mr Mombert Hoppe, World Bank, developed this theme, distinguishing between three levels of regulation: global, regional and domestic. A regulatory reform should select the adequate level according to the specific needs (competitiveness/governance etc.) and the particular stage of development.

The discussion focused mainly on legal issues (the tuna-dolphin case providing an interesting application of many theoretical points touched upon during the presentation) and private standards (customers’ need to distinguish and the problem of misleading labels). 

 

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Session 37: Services Regulation in a Globalizing Context

The session looked at possible avenues for the liberalization of trade in services and mainly revolved around the issue of domestic regulation.

The panellists shared the view that domestic regulation in services pursued various legitimate policy objectives and that the lack of sound domestic regulation of services had negative effects.  As a result, it was argued that further negotiations should concentrate on re-regulation rather than de-regulation.

Professor Markus Krajewski, Friedrich-Alexander-Universität, suggested that a paradigm shift in services negotiations is needed: from disciplining to promoting domestic regulations. He suggested that an alternative approach to services negotiations should include the development of standard policy instruments for regulation, focusing on sectors/modes, incorporating regulatory standards in model schedules, reaching out to international organizations and private standards, setting initiatives to encourage “good regulation” and supplementing “Aid for Trade” with “Aid for Regulation”.

Dr Marion Jansen, International Labour Organization, criticized the current approach of including regulatory measures as limitations in the schedules of commitments, creating excessive complexity for negotiators and businesses. It was also mentioned that least-developed countries face serious difficulties in scheduling their commitments in such a manner. Dr Jansen drew attention to the approaches in other regulatory agreements (such as the Agreement on Technical Barriers to Trade): transparency, references to international standards, and promoting (mutual) recognition.

The discussion of the use of international standards in the services field identified possible challenges: defining legal and institutional relationships between the WTO and standardization bodies, efforts to ensure the participation of developing countries, the role of regulatory agencies in dispute resolution and the assessment of the quality of regulations.

Finally, Dr Bernard Hoekman, World Bank, emphasized the problem of the lack of information on the constraints and effects of regulation on international trade in services. It was argued that quite often there was a lack of information on the regulatory framework, its application and possible options at the domestic level. He described the efforts of the World Bank in this area and suggested that a cautious assessment should be made of the usefulness in any given sector and country of binding commitments as opposed to better regulation.

 

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Session 38: Are Agreements Occurring outside the Multilateral Process Helping or Hindering Multilateralism?

Panellists analysed the impact that agreements taking place outside the framework of the WTO, namely bilateral, plurilateral and regional trade agreements, have on multilateralism.

Ambassador Fernando de Mateo, Permanent Representative of Mexico to the WTO, said that agreements occurring outside the WTO are positive for the multilateral system given that there is a mutual dependence between both. He stressed the fact that these agreements permit discussions on topics that are not open to debate in the Doha Round.

Dr Alexander Triebnigg, President of Novartis Biociencias S.A. Brazil,  gave his analysis of the positive influence of the Trade-related Aspects of Intellectual Property Rights (TRIPS) Agreement in Brazil, and criticized some of the latest reforms.

Mr Bertrand Moullier,  Advisor at the International Federation of Film Producers Association, spoke from the perspective of the film industry about the importance of implementing an intellectual property (IP) legal system that guarantees legal certainty and predictability.

Dr Xavier Seuba, Senior Lecturer at Pompeu Fabra University, discussed the problems encountered when IP law is exported to other legal systems, mainly due to the imbalances that are generated. He stressed that in this regard there are limits in implementation that cannot be surpassed.

Dr Henning Grosse Ruse-Khan, Senior Research Fellow at the Max Planck Institute for Intellectual Property and Competition Law, said that the TRIPS Agreement contains minimum standards and a non-contravention test so that there is a ceiling in implementation that cannot be exceeded. He also analysed how the TRIPS Agreement is used as a framework for free trade agreements (FTAs) including chapters on IP.

Mr Pedro Roffe, Senior Associate at the International Centre for Trade and Sustainable Development, argued that the proliferation of FTAs has contributed to the expansion of TRIPS-plus obligations. He further added that the Council for TRIPS should play a role in analysing the validity of TRIPS-plus provisions implemented in FTAs.

Finally, Mr Andres Guggiana, Permanent Mission of Chile to the WTO, discussed the lack of balance in the IP legal systems of some developing countries and posed some questions to the other panellists.

 

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Session 39: Doha and the Multilateral Trade System: From Impasse to Development?

This panel discussed the way in which development has been addressed at various stages over the course of the Doha Round. Critical assessments were made of the shortcomings of negotiation proposals and the future for the development dimensions of the trade talks. 

Discussion began with the observation that many developing countries had entered into the Uruguay Round agreements without fully understanding the negotiation results, and the following years were taken up with implementation concerns. Members of the WTO have struggled since its inception with the tension between making its rules more development-friendly and pushing further into new areas or disciplines. For instance, whereas developing countries sought favourable adjustments to rules in textiles and agriculture, developed countries have often looked for expansion into areas of investment, the environment, labour, competition and procurement. The panel identified a common situation of developing countries being asked to surrender “policy space” in non-agricultural market access while getting little in return in agricultural trade. 

It was stated that there is no movement in any area of the negotiations apart from trade facilitation. Other initiatives had emerged outside the Doha framework through preferential trade agreements and plurilateral negotiations in services, causing concern that the results of such agreements would eventually be multilateralized and thus escape input from developing countries. On the topic of trade facilitation, many of the panellists asserted that these talks were premised upon the importance of global value chains in trade. This, in turn, drew strong misgivings from the panel that the narrative of global value chains overstated the gains of import liberalization to developing countries, and furthermore was directly inconsistent with developed countries’ own protectionist measures against imports. 

Panellists were therefore sceptical of calls for liberalization that did not account for social realities and evenness of opportunity in trade rules.  Proposals on import facilitation and General Agreement on Trade in Services (GATS) rules on financial services were further criticized for being based on discredited assumptions on the relationship between deregulation and development.  It was thus broadly agreed that trade negotiations cannot focus exclusively on free trade, but must seek balance with human rights and sustainability. 

 

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Session 40: Global Business Reality and Global Governance Challenges

The session looked at how the WTO and trade policy could promote wealth and job generation, especially through the private sector.  Ms Eva Sjögren, Director of the Department for Trade and Policy Development at Kommerskollegium, presented a study from the Swedish government. She showed that as the complexity of global trade is increasing, so too is the cost of trade barriers. Intermediaries and integrated services have become integral parts of global trading. However, a gap exists between current business reality and trade policy-makers.

Ms Sharon Leclercq-Spooner,  Chair of the Trade and External Affairs Committee at AmCham EU, discussed the basic principles of the trading system. She said that how governments look at trade needs to be redefined. In her view, negotiation should not be perceived as consisting of concessions and deals, but rather as a concerted undertaking. She also said that the “single undertaking” should be re-examined. The key would be to move away from nationalistic approaches and to change domestic perceptions.

Mr Ulf Pehrsson,  Vice President of Ericsson, explained the history and global positioning of his company. Due to the positive impact of its broadband work in improving growth, trade and jobs, he believes the information and communication technology  (ICT) sector should aim for zero tariff and trade barriers. He pointed out that free trade agreements (FTAs) are not the way forward as they do not properly recognize global value chains and do not have harmonized rules.

Mr Richard Snodgress,  Commercial Manager at Caterpillar, explained his company’s use of remanufacturing. Even though this practice is good for the environment and business, it faces many non-tariff trade barriers not being addressed by the WTO.

Dr Sébastien Miroudot,  Senior Trade Policy Analyst at OECD, also highlighted the gap between the business reality and policy makers. He pointed to the growing complexity of global value chains and how trade barriers are being amplified. He believes involving the private sector in trade negotiations is a way to fight this.

Questions from the audience included topics such as the specific non-tariff barriers that companies are struggling with (over certification and misdefining “used” products), specifics in certain countries (Canada-US, India), and whether Caterpillar’s experience with remanufacturing could be transplanted into Ericsson.

Overall the panellists agreed that multilateralism is the way forward. There was a general sentiment that the private sector should be better integrated into the discussions. 

 

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Session 41: 21st Century Trade and Global Trade Governance

The session explored the issues and policy implications arising from 21st century trade, particularly global supply chains.

The panel presented a number of facts: the rising share of emerging countries in trade, regional manufacturing centres and supply chains; and the emergence of a multi-polar world economy. The panel argued that 21st century trade needs new disciplines. Global supply chains call for more interconnected policies that involve a “nexus” of trade, investment, services and intellectual property.

Professor Richard Baldwin, Graduate Institute of International and Development Studies (IHEID), proposed a “WTO 2.0” or “Global Supply Chain Organization” in which firms are involved in the negotiations. He tentatively suggested that WTO 2.0 could have universal membership and that special and differential treatment provisions be removed. The issues to be included could possibly be those that US-driven regional trade agreements address, such as investment, movement of capital, visas, competition policy, and intellectual property rights.

Dr Bernard Hoekman, World Bank, discussed a number of new approaches to update WTO rules. These included greater reliance on plurilateral “critical mass” approaches, a shift to a “business process” approach, more flexibility in defining negotiating agendas, a reduction of emphasis on reciprocity and binding commitments, and for the WTO to serve as a forum for identifying good practices etc.  As an example, he cited trade facilitation, where various services such as distribution, transport and logistics are not addressed. He suggested identifying “clusters” of policies that matter from a business process/supply chain perspective.

Professor Jaime De Melo, University of Geneva, looked at the global governance issue from the angle of trade and environment negotiations. He examined the current progress on the liberalization of environmental goods and services, and listed the main difficulties involved, including strategic behaviour (a bargaining chip when negotiations are multi-dimensional), problems in identifying environmental goods, and different perceptions and interests among members.

At the Q&A, the audience asked about implications of global supply chains for least-developed countries, the future of special and differential treatment provisions and discussed the practicability of certain proposals.

 

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Session 42: Civil Society in Action — Monitoring Sustainable Development and Wider FTA Implementation: Lessons to be Drawn from the EU Experience

The session explored how civil society can play a monitoring role in the implementation of free trade agreements (FTAs). It began by looking at the monitoring mechanism under the chapter on sustainable development of the EU-Korea Free Trade Agreement. The panel agreed that a similar mechanism should be widened to cover other aspects of FTAs. However, they did not consider that such a mechanism could easily be exported to the multilateral trading system despite its contribution to poverty reduction and employment.

The European Commission has been given the mandate to include a sustainable development chapter in the new generation of FTAs that it is negotiating with its trading partners. Sustainable development is composed of three main pillars: environmental or green sustainability, economic sustainability and sociopolitical sustainability. On that basis, the FTAs negotiated by the EU embody so-called “WTO plus obligations”, such as core labour standards as defined in the International Labour Organization (ILO) Convention. The EU-Korea FTA is the first FTA incorporating an ambitious threshold of WTO plus obligations. In its chapter devoted to sustainable development, the FTA mandates the parties to set up respective domestic advisory groups (DAGs) drawing their members from employers, employees, trade unions, wider interests and members of the European Economic and Social Committee.

The DAGs are to meet periodically in the form of the Civil Society Forum (CSF) to carry out their advisory role in the implementation of the chapter. Despite the fact that the CSF is at a very embryonic stage of development insofar as it has only met once, the panel concurred that it can serve as a template for other monitoring mechanisms of other FTAs or Economic Partnership Agreements (EPAs) which will need to be adjusted accordingly.

Several speakers noted that one of the main constraints to civil society’s participation is that it tends to be suspicious of trade opening and to express a general mistrust towards trade liberalization. The EU’s comprehensive strategy consists of involving civil society in the negotiation of an FTA. The idea is to promote an approach based on dialogue and transparency by organizing hearings in the EU Parliament, inviting different actors to gather information and to disseminate adequate information concerning the FTA in question.  Impact assessments carried out would provide the Commission with the necessary information from civil society prior to concluding the FTA negotiations.

Giving a role to civil society in renewed global governance was assessed by the panel as crucial for ensuring the legitimacy of FTAs. The discussants agreed that FTAs are not justified per se; they are only legitimate insofar as they yield social welfare and prosperity. Civil society’s involvement should allow for the assessment of whether a certain FTA has provided not only commercial goods but also public social goods which ultimately justify trade liberalization.

The final question addressed by the panel was whether the incorporation of core labour standards in FTAs has had an impact on the quality or level of employment. One of the speakers shared with the audience the preliminary findings of an ILO study to be published in the coming months. These findings conclude that incorporation of core labour standards has not affected compliance with such standards. However, it did have an impact at the negotiating stage of the FTA. According to the speaker, this constitutes proof that a monitoring mechanism involving civil society may bring the missing element to improve compliance with baseline standards for labour set up by the ILO.

 

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Session 43: Re-energizing Multilateralism: An Asia-Pacific Perspective

The session provided an interesting dialogue on the current state of multilateralism and in what sense current APEC developments could serve as a model to re-energize multilateralism.

Mr Stuart Harbinson, former Permanent Representative of Hong Kong, China to the WTO, pointed out that despite the failure of the Doha Round leading to a somewhat changed perception of the WTO, APEC on the other hand seems to be going from strength to strength. In this regard, he referred to a recent APEC agreement to reduce tariffs to 5 per cent on a range of environmental goods and services, suggesting that the Asian countries are able to address 21st century issues in a way that the WTO is not. He then raised the question whether the APEC model of open liberalism can provide a useful reference point that can re-energize multilateralism, stressing the particularity of the strong engagement of the business community in APEC meetings.

Ambassador Yi Xiaozhun, Permanent Representative of China to the WTO, addressed three key questions. In response to whether multilateralism is in crisis, he highlighted the Doha Round impasse as well as the proliferation of regional trade agreements and gave an affirmative answer to the question. The ambassador elaborated on the nature of Asia-Pacific co-operation, stressing the region’s efforts to substantially reduce barriers to trade and investment, which has led to increased trade and investment flows and ultimately enhanced welfare for the region. He elaborated on the APEC model of open regionalism and the strong political will to further the integration process of the region. The ambassador reiterated the ongoing WTO commitment of APEC. On the question of re-energizing multilateralism, he stressed the region’s role as a testing ground to determine on which issues future progress could be made.

WTO Deputy Director-General Alejandro Jara made the case for more gradualism in the evolution of international agreements, stressing that the WTO dispute settlement system and the trade policy review mechanism both evolved gradually. He said that to avoid rules being drafted in a too rigid fashion, an experimentation period may be necessary. He stressed the importance of assessing the impacts that changes of the agenda can cause and called for more research, particularly on APEC experiences. Lastly, he highlighted the need to spread the Asian (APEC) story as it provided an important lesson for other countries and regions.

Mr Luzius Wasescha, former Swiss ambassador to the WTO, made a plea for mutual learning and for open agreements. He said that the Asia Pacific region can provide a good indication of how to address future problems.

Professor Wang Xinkui, Vice-Chairman of the All-China Federation of Industry and Commerce, said that as the region has profited from the WTO, it can now also provide an instructive example of the success of multilateralism. He  highlighted the capacity of the region to adapt to changes in the world trading system and include new issues such as consultations on environmental goods liberalization, the possible inclusion of rules on clean energy and e-commerce and the involvement of business representatives in the negotiations.

Mr Harbinson summed up the main points:

  • APEC has benefited enormously from the WTO framework of rules and remains a strong supporter of the WTO.
  • APEC is an example that the multilateral trading system can follow.
  • APEC countries have responded flexibly to changes in the world trading system, such as environmental goods negotiations.

 

More on this session

 

Session 44: Is Multilateralism in Crisis?

The panel of the Closing Session reflected on the discussions of the last three days. Panel members shared their views on the future of multilateralism and offered their impressions of the event as a whole.

The moderator, Ms Gunilla von Hall, President of the Geneva Association of United Nations Correspondents (ACANU), began by asking the questions: Is multilateralism in crisis? Are we off track? What lessons have we learned to put multilateralism back on track?

Mr Mark Halle, Vice-President of the International Institute for Sustainable Development, agreed there were great challenges ahead and a “gradual loss in trust in the international system”. In some areas, multilateralism is in crisis but in others, it is working well.

Ms Marion Jansen,  International Labour Office, commented that we live in a time of uncertainty. The current economic crisis is aggravating negative attitudes to multilateralism. Not only should there be a certain amount of “thinking out of the box” but both courage and innovation are needed.

Ms Maika Oshikawa, WTO Institute for Training and Technical Cooperation, believed multilateralism should go beyond the Doha Round. Some of the things which are clearly not working must be done differently. Despite imperfections, nothing can replace WTO multilateralism. The format needs to reflect the 21st century and business reality. Multilateralism is imperfect, but no other platform can come close.

Ms von Hall asked how multilateralism is viewed by the “average person”. Mr Halle said that multilateralism has an image problem. Much attention is given to breaking down trade barriers and little is done about focusing on the domestic effects for the average person.

In summary, the panel believed that the elements which were working well included collaboration at a technical level, focusing on the areas where progress can really be made, and exchanging information. They emphasized that it was important not to forget all the good work the WTO does.

Contributions from the audience related to the environment, sustainable development and the financial crisis.

 

More on this session

 

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