WTO Ambassadors Say Troubles in Geneva Go Beyond American Obstruction
Ambassadors to the World Trade Organization said they're hoping the new Joe Biden administration will line up behind Ngozi Okonjo-Iweala for director-general, and will get serious about finding a way to resuscitate the Appellate Body, though they acknowledged the latter may have to wait for the COVID-19 crisis in America to subside. Ambassadors from Canada, Japan, Singapore, Australia and Switzerland spoke on a webinar Dec. 11 hosted by the Washington International Trade Association.
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But even if the U.S. takes a more constructive role in Geneva, they said, its actions alone are not responsible for the weakened institution.
Singapore's Ambassador Tan Hung Seng said, “The WTO has been floundering since the collapse of the Doha round,” and the death of binding resolution to disputes is just the latest blow. He said the rise in export controls in response to COVID-19 also show the relative powerlessness of the international trading rules. Tan also noted that talks on reining in fishing subsidies missed its end-of-year deadline, and that's especially problematic because those talks “were seen as a litmus test” of the WTO's ability to advance any significant negotiations.
Stephen de Boer, the Canadian ambassador to the WTO, said that while he recognizes tackling Appellate Body reform won't happen for many months, restoring the body would restore confidence in the WTO. He said a number of countries' representatives have said to him, “What is the point of negotiating new agreements if we don’t have a dispute settlement system? That is a criticism that needs to be put to bed.”
Even though the appellate body has been defunct for only a year, there have already been a number of cases in which countries that have lost at the panel level appeal into the void. “Which means that the case itself goes into this purgatory where nothing can be done,” he said.
All the ambassadors on the webinar are from one of the 13 countries in the Ottawa Group, a discussion group working to strengthen the WTO. The only very large economy in the group is Japan. Kazuyuki Yamazaki, Japan’s ambassador to the WTO, was asked about the trilateral discussions between the U.S., the European Union and his country on developing new disciplines at the WTO to address trade distortions through industrial subsidies or state-owned enterprises. Yamazaki said the definition of public body is tricky, and that while countries are obliged to notify the WTO about subsidies, many are not doing it, “so we miss very, very many subsidies,” he said.
One solution to that problem would be to require that if you don't notify about a subsidy, it would automatically be considered a trade-distorting subsidy and prohibited.
He said it's also problematic that when countries bring cases on illegal subsidies, the burden of proof is on the country that is claiming the other country's subsidy is distorting. He said the EU, the U.S. and Japan would like to fix that. But all the issues are still being discussed, and the three parties are not ready to bring a proposal to Geneva.
Several of the ambassadors pointed to the plurilateral negotiations on e-commerce as a bright spot in Geneva, and said that there is convergence in some topics that have been discussed. But Australia's Ambassador George Mina said the 86 countries don't agree on whether the e-commerce deal should be focused on mostly goods, or also cover data flows. He said the debate between the U.S. and Europe on privacy and data flows is “an absolutely critical challenge.”
Tan said he agrees with Mina, but said however the e-commerce deal evolves, “the outcome must be commercially relevant to the commercial sector.”