EU Statement at the General Council meeting, 8-9 May 2023

2. FOLLOW-UP TO OUTCOMES OF MINISTERIAL CONFERENCES

1. MC12

1. WTO REFORM
   • Report by the chairperson
     • IMPROVING INCLUSIVENESS BY REVIEWING AND EVALUATING EXTERNAL ENGAGEMENT – COMMUNICATION FROM COLOMBIA; ISRAEL; THE PHILIPPINES; THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU; AND THE UNITED STATES (WT/GC/W/871)
     • IMPROVING THE OPERATIONS OF WTO BODIES TO REVITALISE THE WTO's MONITORING AND DELIBERATION FUNCTION - REQUEST FROM CANADA, COSTA RICA; AND THE UNITED KINGDOM (WT/GC/W/877)
     • REINFORCING THE DELIBERATION FUNCTION OF THE WTO TO RESPOND TO GLOBAL TRADE POLICY CHALLENGES - COMMUNICATION FROM THE EUROPEAN UNION (WT/GC/W/864)
     • COMMITTEE ON TRADE AND DEVELOPMENT MANDATE: FOCAL POINT FOR CONSIDERATION AND COORDINATION OF WORK ON DEVELOPMENT IN THE WTO – communication from india (WT/GC/W/865)
     • MAXIMISING THE VALUE OF WTO MINISTERIAL CONFERENCES - COMMUNICATION FROM AUSTRALIA  (WT/GC/W/873)
     • 30 for 30 SUGGESTIONS FOR IMPROVING THE FUNCTIONING IN WTO  – REQUEST FROM INDIA (WT/GC/W/874)

First intervention on the EU Communication on Reinforcing the deliberative function of the WTO to respond to global trade policy challenges

The European Union would like to first thank Members for engaging with us since the last General Council meeting on our Communication on Reinforcing the deliberative function of the WTO. We will, of course, continue to engage further.

In our exchanges, we heard overwhelming support for the WTO to re-establish itself as a forum for more meaningful policy deliberation.

We have also received useful feedback on the three pillars of our Communication.

First, we are pleased to report a strong interest in looking deeper into the issue of state intervention in support of industrial sectors.

The European Union believes that policy discussions are needed:

1. 1. to enhance transparency (going beyond subsidies);
   2. To consider the impact of such intervention as well as the role of industrial policy in promoting development;
   3. To examine whether the current WTO framework is fit for purpose, including identifying possible gaps.

We have proposed the launch of a dedicated space for deliberation on state intervention and initiating a clear work programme incorporating these elements at MC13. This process could then deliver a report with possible recommendations at MC14.

In our conversations, we heard a lot of concerns about a race to the bottom, the effects on third countries, including developing ones, as well as an interest in considering the role of state intervention in support of development and diversification, as illustrated in the African Group paper on policy space for industrial development.

We are therefore encouraged by the interest in a deeper discussion on the interaction between trade and industrial policies and believe we should start engaging now.

Chair, we welcome your suggestion to convene a retreat in June to consider the institutional aspects of reform. In addition, we would like to suggest convening another retreat, which would allow Members to engage based in particular on the two proposals currently on the table (the EU and the African Group) related to the interface between trade and industrial policies. This retreat should take place before the General Council meeting in July.

Second, we are heartened by the strong support to reinforce deliberation on global environmental challenges in the Committee on Trade and Environment (CTE).

The aim would be to enhance transparency, coordination and policy dialogue and hold discussions on the design of measures that maximise climate and environmental benefits while minimising trade impacts.

We are pleased that engagement is already increasing in the CTE. There seems to be broad support for thematic sessions in the Committee. Already in advance of introducing those, the European Union will be continuing with the regular updates on the European Green Deal in the formal June CTE Committee. We will also be organising side events during Environment Week on topics of particular interest to Members (such as CBAM and deforestation).

Third, the trade and inclusiveness segment. We recognise that Members seek further clarifications and have expressed some concerns. But as the Director General keeps recalling, this Organisation is to serve people, and this is a pillar we just cannot ignore.

In practise, we see value in improving the understanding and analysis of distributional impacts of trade and how to facilitate the integration of developing countries into global value chains. We have noted interest for addressing the gender dimension, too.

We also need to better inform our deliberations and find ways to better engage informally with external stakeholders and with other International Organisations to bring in broader perspectives, while of course preserving the Member-driven nature of this Organisation.

Against that background, we propose to organise a workshop or seminar bringing together the WTO World Bank, UNCTAD and ILO for sharing working papers on the distributional impact of open trade policies.

As part of this inclusiveness pillar, we also see the opportunity to address development across the three core functions of the WTO.

I look forward to hearing Members’ views on these suggestions.

Second intervention on the other papers on the agenda

In a rapidly changing economic and geopolitical landscape, modernisation is a must for the WTO. The fact that we have today six papers on today’s reform agenda point demonstrates that there is momentum building up on the reform process.

The European Union supports practical improvements to the functioning of WTO bodies.

We are pleased to announce that we will co-sponsor the Communication on “Improving the operations of WTO bodies” already cosponsored by 18 Members. The ideas included in the document come in support of the more substantive engagement we are calling for in our own Communication.

The European Union welcomes the fact that a number of these ideas are in fact already being discussed or implemented by individual Committees, where a lot of positive “bottom-up” work is taking place. The European Union encourages all WTO bodies to decide on practical improvements within their areas of competence ahead of MC13 in order to report positive steps to Ministers. We need to think about when these can be decided to have them agreed ahead of MC13 and report this to Ministers.

We are also ready to look at how to make Ministerial Conferences more efficient, with the understanding that “de-dramatising” them should not detract from their role of getting us to ambitious and substantial outcomes at MC13 and beyond.

We also welcome the calls today for stronger involvement of external stakeholders, as outlined in the paper on improving inclusiveness (WT/GC/W/871), an issue which we also addressed in our paper.

While these operational improvements are important, we must also ensure that we devote the necessary focus to the work on substance, as outlined in my previous intervention.

On development, the European Union welcomes the comment in the Indian submission that the mandate of CTD, “…is not to replace but to complement the work of other bodies on development … through coordination and consultation with these WTO bodies.” This recognition tallies with the European Union’s understanding of the CTD’s mandate, but also with our views on a better functioning of WTO committees.

We look forward to further consultations with Members, and to the retreat on the deliberating function announced for June. We call again for it to be complemented by a further retreat on the interface between trade and industrial policies, which should help us map out work on this very important topic.

I want to reiterate that the top priority for the European Union is the restoration of a fully functioning dispute settlement system by 2024.

And to react to the Director General's suggestion for a TNC senior officials meeting in July, it is a good idea, provided we give careful consideration to the topics and organisation of the meeting.

2. WORK PROGRAMME ON ELECTRONIC COMMERCE
   • • • • • • • • report by the facilitator
                 • Reinvigoration of Work Programme on Electronic Commerce and Moratorium on imposing Customs Duties on Electronic Transmissions – request from india and south africa
                 • A Development Approach to the Work Programme on E‑Commerce (WPEC) – request from south africa

The European Union welcomes the interest of Members to implement the MC12 decision on e-commerce and in particular intensifying engagement on the development- and digital trade- related issues. We are glad to see the Work Programme truly reinvigorated, particularly in line with its development dimension.

We would also like to express our thanks to those Members who have tabled written communications helping to shape our discussions. This includes the communication put forward by South Africa, discussed at our meeting today, which presents interesting ideas for our future work under the Work Programme.

The meetings so far have been constructive and allowed Members to share their views on topics put forward by the Facilitator. In our view, these discussions on the challenges and opportunities of e-commerce are extremely important for developed and developing countries alike.

The discussion on the moratorium has been particularly insightful. The European Union notes the overwhelming support for the extension of the moratorium expressed at the dedicated session of the Work Programme. We have heard numerous members, both developed and developing, arguing that the moratorium must be maintained due to its key importance to development of the digital economy and trade. The European Union fully shares this view.

In terms of the way forward for the Work Programme, we believe that we should continue with monthly meetings and delve deeper into the more specific elements of topics discussed so far, following numerous suggestions and questions raised by members. After having deepened the discussion on these first topics selected by the Facilitator, we are open to look into other topics that were suggested.

We also believe that we should bring together relevant stakeholders into our discussions. In this regard, we welcome the first event that is due to take place at the beginning of June with the participation of intergovernmental organisations. In addition we believe that involvement of business and academia will prove useful as well.

I want to use this opportunity to thank Ambassador Dwarka-Canabady (Mauritius) for her efforts in facilitating our Work Programme discussions.

While we are having this discussion in the General Council, let us not forget that Russia's aggressive war is causing immeasurable human suffering and is spreading instability in the region and across the world. The WTO cannot ignore the devastating impact of the invasion. The European Union continues to unequivocally condemn the war and our support to Ukraine remains unwavering.

3. PARAGRAPH 8 OF THE MINISTERIAL DECISION ON THE TRIPS AGREEMENT – DURATION OF EXTENDED DEADLINE

The European Union will continue constructively engaging in the discussions on whether to extend the scope of the Decision to COVID-19 therapeutics and diagnostics.

These are not easy discussions as the situation is complex. Contrary to COVID-19 vaccines, there is no clear definition of these products. In addition, there are multiple factors that affect their accessibility and affordability.

A number of open questions remain, including as regards the adequacy of supply of COVID-19 therapeutics and diagnostics.

The European Union will remain constructively engaged in the discussions on this issue.

3. WORK PROGRAMME ON SMALL ECONOMIES – REPORT BY THE CHAIR OF THE DEDICATED SESSION OF THE COMMITTEE ON TRADE AND DEVELOPMENT

The European Union would like to thank Ambassador Sánchez-Fung, Chair of the Committee on Trade and Development, for his report.

We would also like to thank again the WTO Secretariat in providing a very substantive background note. I would also congratulate the outgoing Chair of the Committee on Trade and Development for piloting the first discussion on this study that took place at the Dedicated Session on Small Economies on 30 March.

The discussion revealed that the variety of impacts in different countries and sectors reflects the diversity of the group of small, vulnerable economies. The background note suggests that small economies have certain opportunities. The note also indicates challenges, both structural ones, and strong environmental and inflationary pressures, including the impacts of the Russian war of aggression against Ukraine.

Given the important impact of COVID overall, we would welcome further work and discussions at the dedicated session. This would include contributions from small-economy Members having different socioeconomic profiles, but also other WTO Members facing similar challenges, other international organisations, outside experts and private-sector representatives, as appropriate.

4. TRADE RELATED CHALLENGES OF THE LEAST-DEVELOPED COUNTRIES AND WAY FORWARD: PROPOSAL FOR WTO SMOOTH TRANSITION MEASURES IN FAVOUR OF COUNTRIES GRADUATED FROM THE LDC CATEGORY – COMMUNICATION FROM DJIBOUTI ON BEHALF OF THE LDC GROUP (WT/GC/W/807/REV.2)

The European Union is engaging with LDCs on the particular challenges that LDC graduation presents. We are ready to continue to engage, both on “preferences” in Annex 1 and on the “specific measures” in Annex 2 of the proposal under consideration.

The European Union continues to believe that there should be support and flexibilities for WTO Members, commensurate with their needs and capacity constraints, beyond the group of LDCs. But the challenges of LDC graduation merit a specific response from the Membership, which we would be ready to work on with a view to outcomes before MC13.

The European Union is ready to support reaching decisions on “preferences” in Annex1 as soon as possible, with some adjustments. We understand that informal discussions on such adjustments are already ongoing. The European Union is not against stipulating an indicative time period during which preferences would be maintained. However, since such a period would come on top of the period already provided by the United Nations process, the extra period should be reasonable.

The European Union considers that analytical work on Annex 2 of the proposal could preferably start as soon as possible in the LDC Subcommittee as requested by the LDC Group. The Subcommittee should analyse but not negotiate the measures, and coordinate with other relevant WTO bodies and stakeholders. Several Members find that each of the “specific measures” in Annex 2 of the LDC proposal will require a separate discussion in more detail. And this will inevitably take some time.

In the area of trade specifically, the aim of the European Union is to focus on how to facilitate and enhance the capacity of countries to assume commitments that foster integration in the global economy. In our view that is the best way that the WTO can effectively contribute to sustainable development.

We listened last week to the presidential lecture by the President of Botswana. He indicated how, as Botswana graduated, this was challenging, but it was possible. And as we look at Botswana today, we are encouraged by their experience.

With your indulgence, I revert to my request of yesterday, supported by other members, to organize a retreat on “state intervention in support of the industrial sectors”. This issue affects a whole range of WTO members, including LDCs. If for logistical reasons holding this retreat is not possible in July, then it could be just after the summer.

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