Trade Cases

WTO Ministerial Ends Without Achieving Objectives

Written by Sandy Williams

The World Trade Organization finished its 11th ministerial conference on Wednesday without making significant progress on multilateral issues. Nearly 4,000 ministers, trade officials and delegates from the 164 members of the WTO attended the 11th ministerial conference, along with observers and the global press.

The meetings opened on Sunday with members chafing from criticism by the United States. Trump has called the WTO a “disaster,” and the administration has shown a clear preference to bilateral over multilateral trade deals.

Four Latin American presidents presented a joint declaration of support for the WTO, reaffirming the need for a multilateral trading system. Presidents from Argentina, Brazil, Paraguay and Uruguay signed the statement along with representatives from Colombia, Guyana, Mexico, Peru and Suriname.

“Trade has been a key source of growth and development,” Argentina’s President Macri declared. “However, we know that the benefits haven’t been shared by everybody, and that has given rise to challenges and a questioning of economic globalization.”

“It is our joint responsibility to rise to the challenges of the 21st century and ensure that they become opportunities for a more inclusive future,” he added.

WTO Director-General Roberto Azevêdo noted that global trading increased 26-fold in the last 70 years since the signing of the General Agreement on Tariffs and Trade. The system is not perfect, noted Azevêdo, but it is “the best we have” and provides “stability and certainty—especially in challenging times.”

“It is a rare example of effective, functioning, vibrant multilateralism — with all the hard work, difficulty and effort that this can sometimes entail,” said Azevêdo. “The system has helped to build prosperity around the world. It has helped to lift a billion people out of poverty in a generation. It has been tested — and it has held firm.”

U.S. Trade Representative Robert Lighthizer told WTO members on Monday that the “WTO is losing its essential focus and becoming a litigation-centered organization.” Members are using the WTO lawsuits to gain concessions rather than meeting at the negotiating table, he said.

The U.S. has blocked appointments to the appellate body until the WTO reforms its dispute settlement mechanism.

Lighthizer took issue regarding the way countries are deemed developed or developing, a designation that members self-declare and influences commitments that countries make to abide by WTO rules.

“We cannot sustain a situation in which new rules can only apply to a few and that others will be given a pass in the name of self-proclaimed development status,” Lighthizer said.

“There is something in our view, when five of the six richest countries in the world presently claim developing country status at the WTO,” he said. “Indeed, we should also be troubled that so many members appear to believe that they would be better off with exemptions from our rules.”

Lighthizer said transparency is critical in the WTO and old rules must be enforced before new ones are created.

“It is impossible to negotiate new rules when many of the current ones are not being followed,” Lighthizer said. “This is why the United States is leading the discussions in the need to correct the sad performance of many members in notification and transparency. Some members are intentionally circumventing these obligations, and addressing these lapses will remain a top U.S. priority.”

No final joint statement

A final ministerial declaration was stymied by a disagreement between the U.S. and India to include reference to the Doha Development Agenda. The Doha Agenda addressed the problems that developing countries face in implementing WTO agreements. The Nairobi Package was adopted at the WTO’s 10th ministerial conference and included special agricultural safeguard mechanisms for developing countries, public stockholding for food security purposes, as well as rules for least developed countries.

MC11 Chairwoman Susana Malcorra noted, “Differences in Doha has made it impossible to move forward on issues developing countries see as essential.” Neither an agreement for public stockholding for food security nor a work program for agriculture could be reached by members.

The group did agree to adopt an agreement on disciplines on fisheries subsidies by the 2019 ministerial meeting. An agreement was made to extend a moratorium on customs duties for e-commerce and continue negotiations on investment facilitation and domestic regulation in services.

“We have to recognize that this conference has laid bare, more clearly than ever, the deficiencies of the negotiating function of the WTO, and the fact that members are systematically being blocked from addressing pressing realities of global trade,” said European Trade Commissioner Cecilia Malmström. “Procedural excuses and vetoes from one member or another, and cynical hostage-taking, have led to the sobering result of today.”

She added, “All WTO Members have to face a simple fact: we failed to achieve all our objectives, and did not achieve any multilateral outcome.”

“MC11 will be remembered as the moment when the impasse at the WTO was broken,” said Lighthizer on Dec. 14. “Many members recognized that the WTO must pursue a fresh start in key areas so that like-minded WTO members and their constituents are not held back by the few members that are not ready to act.”

He continued, “The United States looks forward to working with those WTO members who are seeking free and fair trade through the implementation of WTO agreements and decisions as negotiated by members. We welcome the opportunity in 2018 to continue to discuss how we can improve the functioning of the WTO and to ensure that it achieves its objectives for the benefit of all members.”

Azevêdo said not every ministerial ends with a win.

“We can’t deliver at every ministerial. It’s not every time that ministers meet that they’re going to be able to strike deals of the magnitude of that we achieved in Bali and Nairobi,” he said. “But that doesn’t diminish the disappointment that we feel…. So, in taking this work forward, I think we need to do some soul searching.”

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