Discussions
The Report of the Panel on Defining the Future of Trade
Sean Woolfrey, tralac Researcher, discusses the report issued by the Panel on Defining the Future of Trade convened by WTO Director-General Pascal Lamy
On Wednesday 24 April 2013, the Panel on Defining the Future of Trade convened by World Trade Organization (WTO) Director-General Pascal Lamy released its report entitled The Future of Trade: The Challenges of Convergence. The Panel, which was established in April 2012 in order to “examine and analyse challenges to global trade opening in the 21st century”, was made up of 12 prominent non-state stakeholders representing a diverse collection of backgrounds, expertise and nationalities. In addition to holding a series of closed meetings between May 2012 and January 2013, the Panel consulted widely with various interested parties and stakeholders through meetings and online facilities. In the words of the Panel, the report is meant as a “call to action and a contribution to further reflection – action and reflection that we believe are essential to address our current stasis and the real risk this carries of imposing significant economic, social and political costs across the globe”.
The report itself covers a wide range of issues and is divided into three sections. The first places international trade into a broader context by detailing the contribution that trade has made to economic growth, development and prosperity across the globe, and by examining the role of trade and investment in the context of domestic challenges such as high unemployment, poverty, inequality and the need for sustainable development. The second section of the report examines a number of prominent “transformational factors” that have shaped international trade patterns in recent years and which will continue to do so in years to come. These include: technological advances and increasing globalisation; the rise to prominence of international value chains and the accompanying growth of global investment flows; geographical shifts in patterns of growth, trade and investment and the rise of emerging countries; the proliferation of preferential trade agreements and bilateral investment treaties; and the increased prominence of non-tariff measures as obstacles to trade.
Against this background, the third section of the report makes a number of recommendations pertaining to the principles of the multilateral trading system, the functioning of the WTO, specific issues linked to WTO provisions and other issues related to the WTO. On the multilateral trading system the report recommends continued exploration of the potential for convergence between preferential trade agreements and the multilateral system and between the underlying objectives of trade liberalisation and legitimate public policy issues. It also calls for a new approach to dealing with flexibilities for developing countries, greater observance of transparency obligations by WTO members and the maintenance of consensus decision-making – but with a requirement that members provide explanations if they veto the adoption of a decision.
With regard to the functioning of the WTO, the report calls for a stronger Secretariat, with greater expertise, that would be permitted to table proposals in order to facilitate deliberative processes by providing technical information and new ideas, but would not compromise the right of members to make final decisions. The report also suggests that the Secretariat should engage directly with non-governmental stakeholders. On issues linked to WTO provisions the report calls for the elimination of tariff peaks and tariff escalation, negotiations on export restrictions, a more concerted effort to address agricultural opening, the completion of trade facilitation negotiations and the reinvigoration of the WTO’s work programme on electronic commerce.
Finally, on other issue areas of relevance to the WTO and global trade in general, the report recommends efforts to address the absence of multilateral rules on investment, continued cooperation between the IMF and WTO on monetary and exchange rate issues, work towards a more “trade-supportive” international competition policy framework, convergence of labour standards, continued trade capacity building for poor countries through Aid for Trade programmes “anchored” in the WTO and the establishment of a forum to explore ways to ensure greater coherence between international policy regimes so as to “benefit from synergies among policies that often operate in isolation”.
While the report covers a wide range of trade-related issues and provides a useful and concise treatment of a number of the factors and challenges shaping the current global trade governance agenda, it does not really offer anything particularly groundbreaking in terms of analysis, or provide any detailed plans for addressing some of the more pressing challenges facing the WTO and its members. For instance, the report only addresses the Doha Round in passing, by noting that the issues on the Doha agenda will not simply disappear and by claiming that a lack of closure at the Round risks putting the health of the multilateral trading system itself at stake. The latter in particular is a somewhat contentious issue that probably deserved more detailed treatment in the report. Nevertheless, the report does raise a number of important points and suggestions, and will hopefully serve to promote significant engagement and reflection among member states and other stakeholders at a time when fresh ideas are urgently needed to ensure the continued health of the multilateral trading system and the continued relevance of the WTO in global trade governance.
Sources:
Panel on Defining the Future of Trade. 2013. The Future of Trade: The Challenges of Convergence. Geneva, WTO. Available online at: http://www.wto.org/english/thewto_e/dg_e/dft_panel_e/future_of_trade_report_e.pdf
World Trade Organization. 2013. Governments face four-pronged convergence challenge in trade – Lamy Panel. Available online at: http://www.wto.org/english/news_e/news13_e/dgpl_24apr13_e.htm