Low expectations from the 12th WTO Ministerial Conference

The meet takes place under the shadow of global inflation, supply chain disruptions, lingering pandemic, slowing growth momentum, and the Russia-Ukraine war

The trade ministers of its member countries are meeting this week (June 12-15) in Geneva for the World Trade Organization’s (WTO’s) 12th Ministerial Conference (MC12), amid low expectations. The meet takes place under the shadow of global inflation, supply chain disruptions, lingering pandemic, slowing growth momentum, the Russia-Ukraine war, food crisis, backlash against globalisation and general distrust and deteriorating relations among some member countries.

The WTO was established in 1995 after eight years of negotiations at the Uruguay Round of the General Agreement on Trade and Tariffs (GATT). Its three main functions are to provide a forum for negotiations to reduce or eliminate tariff and non-tariff barriers to trade and other trade-distorting measures like subsidies, monitor the implementation of the trade agreements, and settle trade disputes among the member countries.

On trade in goods, the WTO members have concluded only the trade facilitation agreement. On most other issues, consensus has eluded the members, as they are at different stages of development and face different types of challenges, and so have very divergent views. The trade ministers have been meeting every two years (except that after 2018, meetings could not be held in 2020 and 2021 due to the Covid-19 pandemic). In these meetings, they have mainly reiterated their well-known positions on various issues. Given the impasse, many countries have opted for plurilateral agreements on some issues and regional/bilateral trade agreements with select countries.

Since 2016, the United States has taken many unilateral actions like raising tariffs on goods from China, Europe and many other countries under the pretext of security considerations provoking retaliatory actions. The dispute resolution system at the WTO has been rendered dysfunctional due to the failure of the United States to appoint enough judges to hear the appeals. Thanks to the unwillingness of its members to take the negotiations forward and strengthen the dispute-settlement mechanism, the WTO has been struggling for its relevance.

Against the backdrop of general apathy of its members, the WTO secretariat has, after due deliberations in its various negotiating groups, prepared three draft texts for consideration by the trade ministers at the MC12. These texts include draft ministerial decisions on agricultural trade reforms, on trade and food security, and on exemptions from export bans of food bought under the United Nations World Food Programme (WFP) for humanitarian purposes. These three texts are complementary and have to be considered together, as they reflect the difficulties members face in narrowing negotiating gaps on key issues.

The contentious issues at MC12 include stockholding limits under public procurement programmes for food security, rules for grain exports from official reserves, patent waivers during a pandemic, reducing subsidies in the fisheries sector, taxation of e-commerce, special and differential treatment for developing countries, unilateral financial sanctions, abrupt export restrictions, selective denial of the most-favoured nation (MFN) treatment to some countries, carbon tax, rules allowing some undeserving countries to enjoy a developing country status and so on.

The WTO is a member-driven organisation where nothing moves forward unless everyone agrees. So, the major trading powers like the United States, European Union and China should go beyond merely talking of strengthening the multilateral trading system. They need to work together taking into account the concerns of smaller trading countries and evolve workable solutions acceptable to all the WTO members.

email: tncrajagopalan@gmail.com