African Countries Deflate Bali Pact in Trade Facilitation, Drafting Postponed

The process of drafting a protocol that would formally incorporate the WTO’s Trade Facilitation Agreement into the rest of the global trade body’s set of rules hit a rough patch this week, sources say. The drafting has now been postponed temporarily, after the African and Least Developed Country Groups called for the deal to be implemented on a “provisional” basis pending the conclusion of the overall Doha Round trade talks, sparking debate among members.

The Trade Facilitation Agreement, or TFA, was the main outcome of the WTO’s Ninth Ministerial Conference in Bali, Indonesia, last December, together with a few separate decisions on agriculture and development issues.

The hard-won deal is the first multilateral trade pact since the WTO opened its doors in the mid-1990s, and the first concrete deliverable from the Doha Round negotiations since they kicked off in late 2011. Some estimates, such as those of the Washington-based Peterson Institute for International Economics, have placed the potential gains from the pact – which aims to reduce red tape and unnecessary delays for goods to cross borders – at up to US$1 trillion.

Since then, WTO members have placed bringing the deal into force as their top priority for the coming months, together with outlining a work programme by year’s end for how to resolve the various other outstanding issues within the Doha Round.

Norway protocol proposal

The Preparatory Committee on Trade Facilitation, which is being chaired by Esteban Conejos– the Philippines’ ambassador to the WTO – has been tasked with performing whatever functions may be necessary to help the TFA enter into force.

The committee was meeting this week to begin the protocol drafting process, after having completed a legal review of the English version of the text earlier this month. This drafting work must be completed in time for the WTO General Council – the organisation’s highest decision-making body outside of the ministerial conference – to formally adopt the protocol by end-July.

This, in turn, would allow for the WTO to open the protocol for acceptance by 31 July of next year, in line with what ministers agreed in Bali. Two-thirds agreement by the membership is required for the deal to enter into force.

A draft proposal for the Protocol has been put forward by Norway, under the document number WT/PCTF/W/1. The two-page Norwegian proposal is for both a General Council Decision and a Protocol amending the Marrakesh Agreement that established the WTO, and outlines the next steps for the TFA in light of the timelines set by ministers in Bali.

African, LDC Group call for provisional TFA implementation

According to sources familiar with this week’s committee meeting, Lesotho presented a paper on behalf of the African Group on Monday that specifically asked WTO members to implement the trade facilitation pact on a provisional basis, in line with paragraph 47 of the Doha Ministerial Declaration.

That particular paragraph says that the “conduct, conclusion, and entry into force of the outcome of the [Doha Round] negotiations shall be treated as parts of a single undertaking.” However, it also allows that agreements reached prior to the end of the full Round be implemented on “a provisional or a definitive basis,” with such agreements be then taken into account when assessing the balance of the Doha talks as a whole.

The African Group request was in line with the direction given by African Union trade ministers when they met in Addis Ababa, Ethiopia late last month.

Lesotho said this week, additional clarity is needed from WTO members about the funding that developing countries will receive to help them develop the necessary capacity to implement the trade facilitation pact’s commitments.

Uganda, on behalf of the LDC Group, said Monday that its coalition will be submitting its own textual proposals, and similarly urged that paragraph 47 be referred to in the Protocol.

Consultations ahead

The suggestions by the African and LDC Groups fuelled an intense debate at this week’s committee meeting. Some members, namely various individual African countries, together with Bolivia, Cuba, and Nepal, spoke in support of the groups’ suggestions.

Others, such as the EU, US, and Mexico, reportedly warned that the suggestion put forward by the African and LDC Groups could get in the way of the committee’s goal of bringing the TFA into force “expeditiously,” in line with the Bali mandate. Some have warned that these new proposals on paragraph 47 would essentially go beyond the direction that ministers gave for the Preparatory Committee’s work.