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Economicsthird World ECONOMICS No Third ECONOMICSThird World ECONOMICS No. 730, 1-15 September 2021 World Trends and Analysis No.730 1-15 September 2021 e-ISSN : 27165388 Difficult road to MC12 for developing countries In the face of developed-country opposition, developing countries face the challenging task of trying to steer discussions at the WTO towards a successful outcome on issues of interest to them at the trade body’s forthcoming 12th Ministerial Conference (MC12). l South faces moment of truth on development issues in run- up to MC12 – p2 .......... ALSO IN THIS ISSUE .......... Latin American and Caribbean economies need to boost their resilience amid commodity price hike Privatized health services worsen pandemic Who is really at the table when global tax rules get decided? 1 THIRD WORLD CURRENT REPORTS I WTOThird World ECONOMICS No. 730, 1-15 September 2021 Economics Tren d s & A n a l y s i s South faces moment of truth on 131 Jalan Macalister 10400 Penang, Malaysia development issues in run-up to Tel: (60-4) 2266728/2266159 Fax: (60-4) 2264505 MC12 Email: [email protected] Website: https://twn.my Unless they forge a common front around issues of interest to them, developing countries could see these subjects sidelined from the WTO agenda leading up to the organization’s 12th Ministerial Conference C O N T E N T S this November. by D. Ravi Kanth CURRENT REPORTS South faces moment of truth on development issues in run-up to GENEVA: The developing countries and 10) the developmental and inclusive MC12 — p2 least-developed countries (LDCs) could agenda on reforming the WTO. face a moment of truth at the World Trade Major developed countries such as Organization when their representatives the United States, the European Union, LAC economies need to boost their return from their summer recess at the Japan, Canada (which coordinates the resilience amid commodity price beginning of September. Ottawa Group of some 13 countries), hike — p5 Due to fierce opposition from a Australia, Norway and Switzerland seem handful of developed countries and to be coalescing around their own issues some developing countries, a successful that risk turning the multilateral trading OPINION outcome on the developmental issues system, particularly the WTO, into an “us raised by many developing and least- and them” plurilateral organization. Privatized health services worsen developed countries over the past four Unless many developing and least- pandemic — p8 years seems unlikely at the WTO’s 12th developed countries forge a common front Ministerial Conference (MC12), which on their issues and thwart the continued Analysis is scheduled to begin on 28 November attempts by the industrialized countries in Geneva, said people familiar with the to divide them, there is little likelihood Who is really at the table when global developments. of any progress on the 10 developmental tax rules get decided? — p10 The developing and least-developed issues above, said people familiar with the countries have consistently raised around developments. 10 developmental issues in the run-up to The “us and them” divide on the MC12: 10 issues was starkly witnessed at the 1) a temporary TRIPS waiver to combat WTO General Council (GC) meeting the COVID-19 pandemic; on 27-28 July before the summer break. 2) a permanent solution for public Among others, one outstanding issue stockholding programmes for food that has been on the table for more than security purposes in developing 20 years, namely, the 1998 multilateral countries; work programme on e-commerce, faced 3) the multilateral work programme on a frosty response at the GC from the so- electronic commerce; called “us” group led by the EU, Canada, THIRD WORLD ECONOMICS 4) the WTO’s response to the COVID- Australia and the US. is published fortnightly by the Third 19 pandemic; World Network (TWN), an independent 5) trade-related challenges of the E-commerce work programme non-profit international research and LDCs; advocacy organization involved in 6) core developmental concerns in During the GC meeting, India and bringing about a greater articulation of the proposed fisheries subsidies South Africa underscored the need the needs, aspirations and rights of the agreement; to review the current moratorium on peoples in the South and in promoting 7) the G90’s 10 agreement-specific imposing customs duties on electronic just, equitable and ecological proposals for making special and transmissions on account of several development. differential treatment (S&DT) simple developments that have taken place over Editor: Chakravarthi Raghavan and effective; the past 22 years. (8) the legal status of the plurilateral India said that while digital Editorial Assistants: Lean Ka-Min, T. Rajamoorthy, Chee Yoke Heong Joint Statement Initiatives (JSIs); infrastructure plays a significant (9) strengthening the multilateral role during the ongoing COVID-19 Visit our website at https://twn.my/ character of the WTO; and pandemic, there is also a widening digital 2 CURRENT REPORTS I WTO Third World ECONOMICS No. 730, 1-15 September 2021 divide among countries. Further, the WTO bodies – the Council for Trade definition and scope, be clarified to WTO members are yet to comprehend in Goods, the Council for Trade in enable a common understanding on the implications of e-commerce on Services, the Committee on Trade and e-commerce. “competition and market structures; Development, and the TRIPS Council. It is regrettable, said South Africa, issues related to transfer of technology; South Africa emphasized the to see lack of commitment to the data storage; automation and its impact on need for structured discussions in the developmental aspects of the WTO- traditional jobs; and gaps in e-commerce GC on: (1) developmental aspects of mandated work, and “we are concerned policy and regulatory frameworks in e-commerce; (2) scope, definition and that this is increasingly contributing to developing countries, including LDCs”. impact of the moratorium on customs lack of progress in the WTO.” India said it is time to review the duties on electronic transmissions; (3) It cautioned against attempts to 1998 decision to have the moratorium examination of the challenges experienced expand the definition of electronic on customs duties on e-commerce, as the by developing countries and LDCs in transmissions, which will have significant decision was taken without consensus on relation to e-commerce; and (4) exploring revenue and industrialization implications the scope of the moratorium and without ways of enhancing the participation of for developing countries. any understanding of the unfolding developing countries in e-commerce. A UN Conference on Trade and digital revolution. Development (UNCTAD) paper Since then, the moratorium has been (UNCTAD Research Paper No. 47, June extended on the commitment that the 2020) estimated that total imports of 1998 work programme on e-commerce India said the services via Mode 1 amounted to $705 “will be reinvigorated, to achieve clarity billion in 2017 while total imports of on various issues, including the scope developing digitizable products were around $80 of the moratorium and its impact on billion. The paper also estimated the members’ policy space and revenues,” countries and LDCs potential losses from the moratorium India said. However, there has been little to be up to $10 billion per annum for progress in the discussions on the work are bearing the developing countries and $289 million programme. for advanced economies. These forgone India said that during the coming brunt of the impact revenues to developing countries are set to few months before MC12, members need exponentially increase with the increasing to engage constructively on various issues of the moratorium digitization of goods, including advances under the work programme. in 3D printing technologies. It is important to have “a clear by “extending At the GC meeting, South Africa understanding on the scope of the alluded to the narrative being advanced moratorium, to enable us to make an duty-free, quota- by the developed countries that such informed decision on extension or revenue losses can be evened out by otherwise of the moratorium in the free market internal taxes or compensated for by upcoming Ministerial Conference,” India dynamic gains. This narrative, it said, stated. access, largely for ignores the principal purpose of customs A reconsideration of the moratorium duties as an industrial policy tool that is critical for developing countries to the developed can and indeed should also be deployed preserve their “policy space to regulate to foster the development of local digital imports, generate revenue through countries.” economies. a simple and direct instrument such The WTO’s e-commerce work as customs duties and achieve digital programme is designed to adopt a industrialization,” India said. It said that the pandemic has comprehensive and holistic approach to It called on the proponents of the highlighted the enormous gap in access e-commerce to ensure equitable benefits moratorium to provide specific evidence to digital technologies, laying bare the for all, South Africa said, arguing that the of benefits, including with regard to problems of the digital divide both between reinvigoration of the work programme development of the digital economy. and within countries. Emphasizing the is critical to securing the development India said the developing countries critical role played by technology in dimension of the longstanding area of and LDCs are bearing the
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