The WTO is getting ready for the 12th Ministerial Conference
The World Trading System is back on the agenda. Trade ministers from around the world met in Geneva, Switzerland, in July, to review the progress in fisheries negotiations in preparation for the 12th trade Ministers Conference (MC12) that will take place in December this year. The July preparatory meeting was critical because trade ministers are anxious to deliver outcomes that are more tangible after the disappointing conference held in Argentina in December 2017. The Geneva ministerial meeting will be the first to be held since Dr Ngozi Okonjo-Iweala became the first African and woman to lead the World Trade Organisation (WTO).
Her priorities are to contribute to a meaningful resolution of the Covid-19 pandemic, concluding the Fisheries Subsidies negotiations, the reform of the Dispute Settlement System, including the restoration of the Appellate Body, as well as, tangible outcomes on Agriculture. She has also expressed a desire to enhance dialogue and review the work on e-Commerce; Investment Facilitation; Services Domestic Regulation; Micro, Small and Medium-sized Enterprises (MSMEs); Women in Trade as well as Trade and Environment.
Amongst the many challenges that she faces are expectations that she will articulate a unifying vision on the major issues that have previously proved to be divisive. This will not be made easier by the lack of transparency associated with small group meetings, which often leads to the exclusion of other countries from the discussions that are binding on all WTO members. In the past, failure to achieve balanced and equitable negotiating outcomes has been cited as evidence of the inherent deficiencies of the Multilateral Trade System.
Significantly, the MC12 will take place against an unusual trade context stemming from the devastating Covid-19 global pandemic, which has eroded socio-economic development gains and undermined progress on poverty reduction indicators. It will also be held at a time when the WTO is faced with a real crisis of confidence. A key pillar of the WTO, the Dispute Settlement System that has provided certainty and robustness in the multilateral trading regime, has been under severe threat. Delivering concrete negotiated results in these aspects of work is critical for the WTO’s credibility.
In the agriculture talks, the key priority is the elimination of harmful domestic subsidies provided to farmers in developed countries. Provision of domestic subsidies by developed countries distort trade and restricts access to global markets for agricultural products from developing countries. Additionally, these subsidies generate large surpluses that are eventually dumped in developing country markets at reduced prices. There is also pressure on the WTO to resolve issues related to the continuation of subsidies for food security referred to as public stockholding (PSH), exemption of World Food Programme purchases from export restrictions, and improved notices by the patrons of export restrictions.
In the fisheries negotiations, the main issue is the prohibition of certain forms of fisheries subsidies that contribute to overcapacity and overfishing. Moreover, there is a need to eliminate subsidies that contribute to illegal, unreported, and unregulated fishing, as well as to discourage new subsidies to the fisheries sector. There are sharply differing positions among the WTO members on these thorny issues. For example, some countries have demanded comprehensive cuts in subsidies granted by governments to distant-water fishing fleets, while others have sought preferential treatment for small-scale and artisanal fishing in any trade deal that is concluded.
A framework on trade and health, designed to facilitate universal access to Covid-19 vaccines, has been introduced. This is aimed at equipping countries to handle future health crises better. To combat the Covid-19 pandemic, developing countries have proposed a waiver by developed countries of specific rights and obligations afforded by the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement. If implemented, the waiver will allow developing countries to manufacture vaccines and thus reduce their dependency on suppliers from developed countries. Although the United States has in principle supported a TRIPS waiver, the European Union has tabled a counter proposal containing provisions that are different from the proposal tabled by developing countries.
Significant progress has been made on a number of WTO member-led initiatives, which includes Domestic Regulation for Trade in Services; Micro, Small, Medium Enterprises; Investment Facilitation as well as E-Commerce. These are known as joint initiatives. The proponents of joint initiatives have expressed confidence in delivering on a package of agreements and decisions at MC12. It remains to be seen, however, how the outcomes of the joint initiatives will be incorporated into the WTO legal framework in accordance with the provisions of the Agreement that established the WTO.
The MC12 will also be expected to address the longstanding issue of Special and Differential Treatment for developing countries within the WTO, which is crucial to redressing the trade imbalances skewed in favour of developed countries in WTO Agreements. Delivering concrete results on all these issues is critical for the WTO’s credibility and relevance.
There are niggling questions that WTO members need to answer. Are the envisaged results in the trade negotiations sufficient to restore confidence to the WTO? Has sufficient progress been made to produce meaningful outcomes at MC12? More importantly, will these outcomes convince sceptics that the WTO is still relevant and responsive to these challenging times? Finally, will the packages delivered ensure that the multilateral trading system contributes to ‘building back better’ after the COVID pandemic devastation?
The MC12 cannot be a business-as-usual ministerial meeting. Decisions taken will have long-term implications for the future of the Multilateral Trading System. The stakes are high and the MC12 cannot afford to flounder.
* The authors are writing in their personal capacity
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