Geneva: Efforts to mobilize support for a new round of global trade talks to address worsening tensions from the US-China trade war have gained ground after 13 industrialized and developing countries vowed to press ahead on a range of controversial issues currently being opposed by a majority of countries, including India, several people familiar with the development said.

Following a two-day meeting in Ottawa on 25 October, trade ministers from 13 countries reiterated their intention to “move forward urgently on transparency, dispute settlement and developing 21st century trade rules."

Without the participation of the US, China, India, South Africa, and Indonesia among others, the Ottawa participants—the European Union, Japan, Canada, Norway, Switzerland, Australia, New Zealand, Singapore, South Korea, Kenya, Brazil, Mexico, and Chile - unveiled a new trade agenda that points towards the launch of a new round of trade negotiations at the World Trade Organization’s (WTO’s) next ministerial meeting in Astana, Kazakhstan in June 2020, said a trade envoy who asked not to be identified. WTO chief Roberto Azevedo who attended the Ottawa meeting apparently approved the list of issues, this envoy added.

Without explicitly mentioning the proposed launch of a new round of trade negotiations, the Ottawa communique, reviewed by Mint, has underscored the need for preparing the negotiating ground by using the multilateral route in issues that would involve “flexible and open negotiating approaches" for “the market distortions caused by (industrial) subsidies and other instruments" so as to create a level-playing field. But the group did not indicate how the market distortions will be determined.

Though the communique underscored the need to “unblock" the appointment of the appointment of Appellate Body members" so to make the dispute settlement body effective, Canada’s trade minister Jim Carr, who chaired the two-day meeting, said “there should be (a) consideration for an alternative which would focus on mediation among disputants," according to the Washington Trade Daily of 26 October.

Effectively, the Canadian minister’s suggestion amounted to what US Trade Representative ambassador Robert Lighthizer had insisted over the past two years. Ambassador Lighthizer has maintained several times unambiguously that Washington would prefer to go back to the GATT (General Agreement on Tariffs and Trade) -phase of negotiating the panel rulings as opposed to the Appellate Body’s decisions that have to be implemented regardless of objections, said a trade envoy, who asked not to be identified.

The three main points of the communique cover the three functions—the negotiating, the dispute settlement system, and the WTO Secretariat—of the trade body. The underlying danger is that, by clubbing all three areas, work on two areas— i.e, preparing the ground for the launch of plurilateral negotiations and the transparency and monitoring role of the WTO will move at warp speed.

But work on the dispute settlement reform will be held hostage because the US is unlikely to move on filling the vacancies at the Appellate Body, said trade envoys, requesting anonymity.

The Ottawa communique acknowledged that without an effective dispute settlement system that preserves the rights and obligations of WTO members, rules cannot be enforced. “Such a system is also essential in building confidence amongst members in the negotiating pillar," it said, emphasizing that “continued vacancies in the Appellate Body present a risk to the WTO system as a whole." It wants to reinvigorate the negotiating function of the WTO by concluding “negotiations on fisheries subsidies in 2019.

The communique maintained that addressing modern economic and trade issues, and tackling pending and unfinished business is key to ensuring the relevance of the WTO.

“This may require flexible and open negotiating approaches toward multilateral outcomes," it argued.

On “development", the Ottawa communique says it will “remain an integral part of our work," including exploring “how the development dimension, including special and differential treatment, can be best pursued in rule-making efforts", a pointer towards “differentiation". Finally, it wants to enhance the role of the WTO Secretariat’s overall monitoring oversight by assess the trade policies of its members.

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