The European Union Delegation to Egypt

Statements by the European Union at the WTO General Council meeting, 9-10 December 2019

Geneva, 10/12/2019 - 00:00, UNIQUE ID: 191210_51
Local Statements

ITEM 5 - INFORMAL PROCESS ON MATTERS RELATED TO THE FUNCTIONING OF THE APPELLATE BODY – REPORT BY THE FACILITATOR AND DRAFT DECISION ON THE FUNCTIONING OF THE APPELLATE BODY (WT/GC/W/791)


·    The European Union thanks Ambassador Walker for his statement and for his draft decision presented to us today for approval.

·    This informal process has lasted for almost a year. Faced with the blockage of Appellate Body appointments by the United States, the rest of the Membership has very clearly and very concretely demonstrated, by the many proposals that have been made and by their open engagement in this process, its willingness to address the concerns raised by the United States.

·    We commend the outstanding work done by Facilitator Ambassador Walker. We firmly believe that his draft decision could have been the right basis for unblocking the appointments.

·    However, as we have just heard, the United States is not ready to unblock on the basis of the revised draft decision as presented today.

·    At the same time, the United States has not formulated any single proposal or counterproposal of its own.

·    Let us be clear today as to where this leaves the WTO Membership.

·    In two days from now, we will have an unprecedented situation in the World Trade Organization, which will no longer be able to deliver binding resolution of trade disputes and will no longer guarantee the right to appeal review.

·    This is in clear breach of the WTO contract in force since 1995.

·    Let us be clear about what in fact will happen in two days. The actions of one Member will deprive other Members of their right to a binding and 2-step dispute settlement system even though this right is specifically envisaged in the WTO contract. The actions of one Member will have that result for the rights of all other Members.

·    More fundamentally, the very idea of a rules based multilateral trading system is at stake. The European Union firmly believes in a multilateral trading system where rules can be enforced, where disputes can be submitted to adjudicators, and where rulings of ad hoc panels can be appealed before a standing appeal instance that gives guarantees of quality and independence.  

·    While the European Union itself is the world’s largest trading block, it will not support, and will not condone, a system slipping into power-based economic relationships.

·    There have been almost 600 disputes brought to date before the WTO. The immense majority of these disputes have been positively resolved, either through consultations or through adjudication. These 600 cases are only the tip of the iceberg. The very existence of an effective dispute settlement system has helped to prevent countless breaches of the rules.  While some WTO Members have in fact never availed themselves of the dispute settlement system, and many Members have only litigated a few cases since 1995, the system clearly benefitted to all Members, including the smaller economies.

·    While this item focuses on the dispute settlement function of the WTO, the stakes are obviously higher and cut across all functions of the WTO. It has sometimes been said that the dispute settlement crisis is merely a manifestation of the concerns with the inadequacy of the substantive WTO rules to address today’s challenges.

·    The EU supports the reform and upgrade of the WTO in all its functions. But we should remedy the current situation by boosting the WTO’s negotiating arm rather than chopping off its dispute settlement arm.

·    At this juncture, the EU would like to convey a clear message of openness and determination. We will continue supporting all efforts leading to the unblocking of Appellate Body appointments. We want a system that works for all WTO Members and that includes all WTO Members.

·    The European Union has always been open, and remains open, to discuss constructive proposals to improve the functioning of the dispute settlement mechanism and, in particular, of the Appellate Body. Nevertheless, at this point, where the Appellate Body is about to become non-operational as a result of the actions of one Member, the EU wishes to emphasise that it has served well all Members in an independent, highly professional and, given the circumstances, very efficient manner. The European Union, therefore, would like to commend all the present and past members of the Appellate Body on their work, as well as the staff working on the Appellate Body’s secretariat.    

·    Pending such resolution, the EU is also determined to preserve its rights as enshrined in the WTO Agreements, notably the right to an appeal review. We will therefore continue preparing contingency measures that would apply in case the appointments remain blocked. We owe it to our citizens and our businesses, because it is them, ultimately, that benefit from the system.


Item 7 - TRIPS NON-VIOLATION AND SITUATION COMPLAINTS MORATORIUM- COMMUNICATION FROM CANADA, CHILE, COLOMBIA, GUATEMALA, NEW ZEALAND, PANAMA AND URUGUAY (WT/GC/W/790)

And

Item 8 - WORK PROGRAMME ON ELECTRONIC COMMERCE

A.         STATEMENT BY THE CHAIR

B.    REPORTS BY THE CHAIRS OF THE COUNCIL FOR TRADE IN GOODS AND OF THE COUNCIL FOR TRADE IN SERVICES (G/C/66 AND S/C/58)

C.    WORK PROGRAMME AND MORATORIUM ON ELECTRONIC COMMERCE - COMMUNICATION FROM CHAD ON BEHALF OF THE LDC GROUP (WT/GC/W/787)

D.    WORK PROGRAMME AND MORATORIUM ON ELECTRONIC  COMMERCE - COMMUNICATIONS FROM AUSTRALIA; CANADA; CHILE; COLOMBIA; COSTA RICA; GEORGIA; GUATEMALA; HONG KONG, CHINA; ICELAND; ISRAEL; REPUBLIC OF KOREA; MEXICO; NEW ZEALAND; NORWAY; PANAMA; PARAGUAY; SINGAPORE; SWITZERLAND; THAILAND AND URUGUAY (WT/GC/W/782/REV.2, WT/GC/W/792)

·    The EU is very pleased that the draft decision that you put forward extending the e-commerce moratorium by 6 months, to the MC12, is approved. The EU can also support the parallel extension of the TRIPs moratorium on Non-Violation Complaints. The EU would like to thank you, Chair, for the intensive consultations you carried out in the last few days. It is only thanks to your efforts that we managed to develop and agree on this compromise text.

·    Of course, a 6-month extension does not provide sufficient predictability and security that our consumers and businesses – both in developed and developing countries – need when engaging or planning to engage in e-commerce. We therefore hope that our Ministers will be a position to consider a longer term – if not permanent – extension at MC12.

·    We are also pleased to be in a position to agree with the extension of the e-commerce Work Programme and appreciate the renewed interest of Members to have dedicated discussions in this forum in early 2020.  The EU is open to engage in balanced discussions on the trade-related issues that Members may wish to bring forward, also taking into account the recent economic studies that provided scientifically solid new evidence on the economic implications of moratorium.

ITEM 9 - REQUEST FOR OBSERVER STATUS BY THE AFRICAN UNION – COMMUNICATION FROM BENIN ON BEHALF OF THE AFRICAN GROUP (WT/GC/W/789)

·    The EU’s trade and investment partnership with Africa is certainly a priority. The EU certainly supports African Union efforts to implement the African Continental Free Trade Area and welcomes Africa’s commitment to the rules-based multilateral trading system with the WTO at its core.

·    On the request that we have in front of us by the African Union for observer status at the WTO, we will need more time to reflect and discuss internally before we can be in a position to share our position.

ITEM 10 - ACCESSION OF CURAÇAO (WT/ACC/CUW/1) – REQUEST FROM THE KINGDOM OF THE NETHERLANDS

·    The EU notes the request circulated to the membership. We welcome the statement today but regret  not to be in a position to express our opinion yet. The reason is that there are several legal issues that have to be examined and consultations to be carried out.

ITEM 11 - PROCEDURAL GUIDELINES FOR WTO COUNCILS AND COMMITTEES ADDRESSING TRADE CONCERNS – STATEMENT BY CO-SPONSORS OF (WT/GC/W/777/REV.4)

·    On behalf of all co-sponsors of the proposal for "Procedural Guidelines for WTO Councils and Committees Addressing Trade Concerns", the European Union would like to give a brief update of our ongoing efforts to improve the proposal since our last meeting in October.

·    Let me recall that the objective of this proposal is to make a modest, yet practical contribution to increasing the effectiveness of the WTO in general and our dealing with each other's trade concerns in particular. Without changing a coma in Members’ rights and obligations, the proposed guidelines could help WTO regular work become more user-friendly, respond better to the expectations of our stakeholders, and contribute to strengthening the WTO as the basis of our trade relationships.

·    The gist of what we heard at the last General Council and in exchanges with Members was encouraging; especially that several small delegations consider the proposal beneficial. Overall, feedback suggests that we are on the right track.  We have been working with Members bilaterally and in small groups to clarify some remaining questions and explore how to accommodate concerns. Let me give you some examples.

·    First, some Members expressed concern that the proposal could put into question or jeopardise what works well in certain committees. In fact, we are aiming for the opposite and have taken inspiration from existing good practices for bodies that lack such practices.

·    We have circulated a room document today which compares existing rules and practices in a selection of WTO councils and committees with the suggestions that are in our proposal. The table is a factual compilation and has benefitted from valuable input by the Secretariat. It illustrates that the suggestions in our proposal do not jeopardise existing good practices because they either are about making work easier for Members (for example earlier circulation of agendas) or have no interference with committee practices.

·    Second, numerous Members have pointed out that the envisaged 30 days to reply to written questions in paragraph 7 might be too challenging. We are looking into ways of addressing this issue as part of the next revision.

·    Third, we heard that the suggestion in paragraph 11 to be economical in repeating known arguments, which picks up an existing practice for the sheer sake of increasing efficiency, can be misunderstood as intended to limit the possibility of expressing concern. As this is clearly not the objective, we are reflecting on how to improve the drafting.

·    Finally, we wholeheartedly agree with a remark made at the last meeting that “political will is more important than procedures”. This said, a framework for dialogue could nevertheless facilitate engagement in situations where political will may not be obvious immediately. We are not naively assuming that the guidelines would end all concerns and avoid all disputes, but we are confident that it could help resolve the “resolvable” trade concerns.

·    Chair, just one more word from the perspective of the EU. As Members know well, the EU is equally active in raising and responding to trade concerns, which is probably normal for an economic actor of this size. Our interest lies in making engagement in both directions more constructive and effective.

ITEM 12 - CHALLENGES POSED TO THE WTO BY NON-MARKET POLICIES AND PRACTICES – UNITED STATES

·    The European Union thinks it is important that businesses operate under market-oriented conditions and has repeatedly expressed its concerns with non-market-oriented policies and practices that have resulted in damage to the world trading system and a lack of a level-playing field.

·    For the EU, market-oriented conditions are fundamental to a free, fair and mutually advantageous global trading system, ensuring a level-playing field for all market participants.

·    As you are probably aware, in the context of the EU-US-Japan trilateral cooperation process the EU has already identified a list of market-oriented conditions as these were expressed in a joint Ministerial statement of May last year.

·    The European Union has been working towards identifying where there are gaps in the rules of the WTO to address non-market-oriented practices and has called for an update of the rulebook in this respect.


ITEM 13 - PROCEDURES TO STRENGTHEN THE NEGOTIATING FUNCTION OF THE WTO – COMMUNICATIONS FROM THE UNITED STATES (WT/GC/W/757/REV.1 AND WT/GC/W/764/REV.1)

·    We reconfirm that development is a central pillar of this organisation.

·    The current distinction between developed and developing countries no longer reflects the reality of the rapid economic growth in some developing countries. We should therefore continue to work on special and differential treatment (SDT) with a view to ensuring that flexibilities are made available to those members who actually need them to enable them to fully benefit from their membership of this Organisation.

·    The European Union firmly believes that if this organisation is to prosper, special and differential treatment must become much more granular, in function of an individual Member's demonstrated needs and capacities. Future differentiation should be designed in terms of specific individual country needs at the sectoral or activity level rather than calling for a block exemption of a large category of Members. Furthermore, the EU considers that each developing country's need for SDT should be assessed on a case-by-case and be evidence-based. The notable exception should be the LDCs who deserve particular treatment and who in any case have graduation mechanisms.

·    We are open to looking into special and differential treatment (SDT) provisions in future agreements, such as the ongoing negotiations in fisheries subsidies. We expect to have a discussion with Members as to what development concern is raised by the provisions under discussion and what flexibility is necessary in order to eventually allow the affected Members to fully implement the agreement. It is only where special and differential treatment responds to a specific need that it can be truly effective. In this context, we call on advanced WTO Members claiming developing country status to undertake full commitments in ongoing and future WTO negotiations.

·    We welcome the clarifications added by the US that links SDT to needs. We would be interested to get clarifications about the meaning of “particular needs” (“Nothing in this Decision precludes a Member seeking to address particular needs during a current or future WTO negotiation.”).

ITEM 14 - LDCS VIEWS ON WTO REFORM DISCUSSIONS AND PROPOSALS – STATEMENT BY CHAD ON BEHALF OF THE LDC GROUP

·    The EU welcomes this contribution of the LDC group to the ongoing discussions about WTO reform. It is important that the LDCs make themselves heard in this debate.

·    Quite understandably, the challenges of capacity constraints and the necessity to mitigate them through technical assistance are vital for LDCs. In its own deliberations about WTO reform, the EU is fully cognisant of how capacity constraints limit in particular LDCs, from fully benefitting from WTO rules. Technical assistance is not a panacea, but it can indeed mitigate capacity constraints and help LDCs meet their WTO obligations as well as benefit from opportunities.

·    As several of the issues raised in the LDC statement are the subject of individual agenda items of this meeting, I will not go into details on those, but would like to thank the LDC group for their constructive engagement in various informal discussions. As co-sponsors of the proposals on notification compliance and guidelines for trade concerns, for example, these discussions are helpful for better devising ways to finetune the proposals.

·    This said, the EU encourages the LDC Group to view WTO reform from a wider perspective than just the current proposals on the table. For keeping the WTO effective and relevant, WTO Members will need to do more than restore the functioning of the Appellate Body and improve the way we work in committees. Most importantly, Members will have to come up with ways to reinvigorate the negotiating function of the WTO in order to adjust the rulebook to today’s economies and challenges.

ITEM 15 - STATEMENT IN SUPPORT OF THE MULTILATERAL TRADING SYSTEM – STATEMENT BY SWITZERLAND

·    The European Union concurs with Switzerland and the group of cosponsors of the Statement on the central and indispensable role of the WTO as the centre of the rules-based multilateral trading system. The WTO is at the centre stage of the global governance of economic relations and the European Union is determined to ensure that the WTO maintains this position.

·    To reinforce this role, and in light of the recent developments, we call upon Members to consider a thorough review with a view to reinforce the monitoring, negotiating and dispute settlement functions of the WTO.

·    As a next step, we agree that we should gear all our efforts towards ensuring that the 12th Ministerial Conference is a success.

ITEM 18 - REVIEW OF THE EXEMPTION PROVIDED UNDER PARAGRAPH 3 OF GATT 1994 (WT/L/1055, WT/L/1078)

The European Union takes note of the US notification and shares the view expressed before us that the examination should focus on whether the circumstances that gave rise to this exemption are still applicable today.
How does the US see these exemptions in light of ongoing efforts to propose policies that contribute to sustainable fishing, in particular in the context of negotiations?

ITEM 20 - COMMITTEE ON BUDGET, FINANCE AND ADMINISTRATION - REPORTS ON MEETINGS OF APRIL, JUNE, SEPTEMBER, OCTOBER AND NOVEMBER 2019 (WT/BFA/179, WT/BFA/180, WT/BFA/181, WT/BFA/182 WT/BFA/183)

·    The EU deeply regrets the developments concerning the Appellate Body, despite the efforts of the overwhelming majority of the Membership to find a solution and launch the process for appointing new Appellate Body Members in line with the rules.

·    The EU also firmly believes that the budget process should be kept separate and not used for policy or indeed structural changes to the organization. We trust that the deplorable process we witnessed this year will not be repeated.

·    We nonetheless support the adoption of the budget for 2020, as this is indispensable for the organization to continue to function, and urge all Members to work together for its modernization.

ITEM 22 - INTERNATIONAL TRADE CENTRE UNCTAD/WTO - REPORT OF THE JOINT ADVISORY GROUP ON ITS 53RD SESSION (ITC/AG(LIII)/276)

·    The International Trade Centre (ITC) is a valued partner to the EU. The EU is very pleased with our cooperation to date and we hope to continue to work on projects and exchange information in response to emerging priorities and needs.

·    The EU would like to take this opportunity to congratulate ITC on its impressive performance in 2019. We note in particular the increasing focus of ITC's assistance to LDCs; its work on market intelligence tools for MSMEs; and its work on women's economic empowerment.

·    On this last point, the EU would like to take this opportunity to once again thank the ITC for the excellent work on the study on the barriers faced by women in international trade, which was presented by ITC Executive Director Gonzalez at the Trade for Her conference, organised by the EU in September this year. We look forward to continuing our good cooperation with the ITC on this important theme and beyond.

24.    APPOINTMENT OF OFFICERS TO WTO BODIES – ANNOUNCEMENT BY THE CHAIR PURSUANT TO PARAGRAPH 7.1(A) OF THE GUIDELINES (WT/L/510)

Line to take: No need to intervene

 

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