A U.S. proposal to improve transparency at the World Trade Organization has evolved significantly over the past few years – including a shift from punitive measures to a focus on incentives – but the concessions have not yet proven enough to attract consensus in Geneva, a fact that supporters of the proposal on Tuesday argued bodes poorly for broader WTO reform efforts.
The proposal was first put forward by the Trump administration, alongside the European Union and a few other countries, in 2018 to address the low rate of on-time notifications at the WTO, a frequent criticism of the U.S. and others. It is one of several proposals that have been made in recent years by those hoping to reform aspects of the organization, a process that was officially launched by the members at the 12th ministerial conference last month.
The original iteration of the transparency proposal included a number of administrative penalties that could be instituted against a member if it failed to submit its notifications within a specific time frame. The punitive nature of the proposal was roundly criticized by several developing and least-developed countries, which argued that it would penalize them for lacking human-resources capacity or the technical knowledge to submit on time.
Since then, the U.S. has softened the proposal and the Biden administration has abandoned any administrative measures that could be construed as punitive. The text now is a “sincere effort” to address the challenges facing developing members, U.S. Ambassador to the WTO María Pagán said, introducing the latest version, dated July 14, during the General Council meeting on Tuesday.
“The proposal has evolved significantly since it was first introduced four years ago,” she said, according to a copy of her remarks. “It is a sincere effort to advance practical, technical work aimed at improving Member notification capabilities.”
As Pagán noted, the proposal now involves more than one-third of WTO members as co-sponsors – many developed countries, but including some notable developing members like Brazil, Mexico, Argentina, Thailand and others.
But while the response to the proposal at the General Council meeting in May was largely positive – especially to the U.S.’ removal of all remaining administrative measures – the discussion on Tuesday was more strained, a Geneva-based trade official familiar with the meeting told Inside U.S. Trade. There was “a degree of testiness on this,” the official said.
Several members – for instance, India and Cameroon on behalf of the African Group – raised concerns that the proposal would add new obligations or become a vehicle to do so, according to the official.
Supporters contested this idea, arguing the proposal is explicitly aimed at helping members fulfill existing notification requirements. The U.S. also took the floor again to ask for examples of what in the proposal those members with concerns view as likely to add to their obligations, according to the official.
The reluctance of some members to move forward on this proposal frustrated a number of the supporting delegations, which said they had gone to great lengths to appease these concerns, the official said.
Accordingly, Pagán cited “a series of breakfast sessions, bilateral discussions, and meetings in various configurations to address their outstanding concerns.”
“This revision includes adjustments aimed at resolving those specific concerns,” she added.
Canada called the discussion “deeply disappointing,” adding that it felt like some of the misunderstandings were deliberate, according to the official.
Several backers – including the U.S., Canada, Australia and Singapore – said the fraught discussion on the proposal, which they characterized as a simple, straightforward one, did not bode well for more substantive reform talks.
Pagán “pleaded” with members to read closely the most recent revision of the proposal to see that it would not add any new rules or obligations, the official said.
India, in talking about its proposal with the African Group, Pakistan and Cuba “to promote development and inclusivity,” took aim at the transparency text, accusing it of creating a false “us vs. them” narrative, according to the official. India instead touted the transparency elements of its proposal.
The proposal from India and others insists on “no additional transparency and notifications obligations under existing agreement” and calls on developed countries to “lead by example in submitting comprehensive, timely and accurate notifications” since “[t]hey have not always done so.”
The U.S.-led transparency proposal is expected to remain on the General Council agenda for the next meeting, which is likely to be held in October. -- Hannah Monicken (firstname.lastname@example.org)