Current, Future Trade Deals in Focus at Paris Ministerial Gathering

9 June 2016

Making progress in current and future trade negotiations was touted as a valuable way for increasing productivity and generating inclusive growth, according to a joint ministerial communiqué issued following the annual forum of the Organisation for Economic Co-operation and Development (OECD) in Paris, France.

The 1-2 June gathering came in tandem with new economic figures from the Paris-based organisation, which support findings from other international agencies that indicate a continuation of the low economic growth seen in recent years.

“We see the world economy stuck in a low-growth trap,” said OECD Secretary-General Angel Gurría in announcing the latest statistics. “Global growth is projected to continue to limp along at around three percent this year, and to pick up only modestly in 2017.”

World real trade growth, meanwhile, is predicted to reach 2.1 percent this year, under the OECD’s new estimates – below the 2.6 percent seen in 2015 – and should then reach 3.2 percent in 2017.

The OECD chief also warned that potential growth improvements could still suffer, due to risks ranging from a UK exit of the European Union to the potential financial difficulties being seen in some emerging economies.

Given this context, ministers in Paris devoted much of their communiqué to the potential policy steps that could help address the myriad challenges facing the global economy, including with regard to trade and investment.

“We recognise the need to boost trade and investment to both foster productivity, and inclusive and sustainable growth,” said ministers in their closing communiqué.

Other topics for discussion included adopting new social and education policies; working to take advantage of current digitalisation and innovation trends; and helping support the implementation of the Paris climate agreement, the UN 2030 Agenda for Sustainable Development, and the Addis Ababa Action Agenda on financing for development.

ITA, EGA, TFA

The final OECD communiqué also called for progress in various trade deals – both plurilateral and multilateral – while noting the importance these would have for the global economy.

These included the implementation of the expanded Information Technology Agreement (ITA-II) and the entry into force of a multilateral pact aimed at easing customs procedures and red tape at the border, known as the WTO’s Trade Facilitation Agreement  (TFA).

Ministers also called for progress in ongoing trade negotiations, including talks among 17 WTO members for a tariff-liberalising deal on a list of environmental goods. Specifically, they urged for negotiators to conclude this Environmental Goods Agreement (EGA) by the September G-20 Summit, being hosted this year by China.

The Paris gathering also gave ministers and senior officials from some EGA participants the chance to meet on the sidelines, bringing together officials from Australia, Canada, the European Union, Japan, Korea, New Zealand, and the United States.

“[The group] committed to intensify their work together and with other EGA partners to successfully conclude the negotiations, and to find common ground on an EGA that will improve environmental protection, promote economic growth, and create green jobs, through an increase in global trade in environmental goods,” said a statement released following the talks. The next EGA round is scheduled for later this month. (See Bridges Weekly, 28 April 2016)

Outcomes for MC11?

Ministers in Paris also addressed the prospects for agreed outcomes at the WTO’s next ministerial conference, slated for the end of 2017.

“Following the Nairobi Ministerial Conference, there remains a strong commitment to advance negotiations on pending Doha issues,” said ministers in Paris. “We agree that a range of issues of importance to today’s global economy, that are currently subject of trade rulemaking in regional trade agreements, are highly relevant issues for consideration in the WTO.”

In the months since last December’s ministerial meeting in the Kenyan capital, trade talks in Geneva have been relatively quiet, as members evaluate how to proceed.

Various WTO members have begun pushing for an outcome on agricultural domestic support for the 2017 ministerial, along with discussing areas that could be addressed in future negotiations at either the plurilateral and/or the multilateral level. (See Bridges Weekly, 12 May 2016 and 4 May 2016)

Trade sources note that these talks are still in the very early stages, as members gauge ambition and interest in different possible areas for future negotiations as well as how to approach these.

“The period of reflection was valuable and many good ideas have been explored and tested. But we must now move to the next stage where governments make concrete proposals on what they would like to see in terms of outcomes at the 11th Ministerial Conference and beyond,” said WTO Director-General Roberto Azevêdo following the Paris discussions.

However, the WTO chief warned, regular political engagement at the ministerial level will be key for achieving any agreed outcomes going forward. 

TISA deal this year?

The OECD ministerial communiqué also calls for the conclusion of talks for a Trade in Services Agreement (TISA) “possibly the end of 2016,” confirming related statements made publicly and privately by various officials involved in the services liberalisation initiative.

Furthermore, the Paris gathering included a meeting on the margins of ministers from countries participating in the TISA talks. The group currently counts 23 participants, with the 28-nation EU as one, which together make up 70 percent of global services trade.

"Today's meeting shows that we may not be far from reaching an agreement on TISA by the end of this year,” said EU Trade Commissioner Cecilia Malmström in a statement following the TISA ministers’ meeting, which she chaired.

While noting improvements in the recently exchanged revised offers, she urged participants to demonstrate “more ambition” going forward.

“The EU is ready to go an additional mile but everyone needs to join if we want to achieve an agreement able to shape the global economy of the 21st century,” she said.

The ministerial meet coincided with a nine-day TISA negotiating round, held in Geneva, Switzerland, and also hosted by the European Union. The chairmanship of the TISA talks rotates between the EU, Australia, and the United States.

The round, held from 26 May to 3 June, included significant discussions on the revised market access offers, according to trade sources familiar with the talks, with all parties except one able to submit theirs earlier this month.

Sources say that while different participants have their own assessments regarding the improvements made in these offers, compared to their earlier iterations, they have generally signed off on various common criteria for how to evaluate them.

These criteria include ensuring that the final TISA deal meets, at a minimum, the commitments already inherent in the WTO’s General Agreement on Trade in Services (GATS); making good quality commitments and improving sectoral coverage in various areas, such as maritime, education, audiovisual, energy, environment, financial and professional services, career services, and health and wellbeing; and providing commitments that at least match their “best FTA.”

They also involve removing some of the party space reservations; improving the level of commitments under Mode 4; delivering on “new services” and removing reservations in these; and improving transparency on sub-federal measures and whether there are limitations on these. 

Trade sources indicate that despite the advances in the revised offers, much work remains across the board for bringing these to the desired level of ambition, and that different views exist as to their quality. Negotiations also continue on the various different “annexes” for inclusion in a final TISA accord.

The next TISA round is slated for July, with another exchange of offers due in October.

ICTSD reporting.

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