Trade Ministers Look to WTO Next Steps at "Mini-Ministerial" in New Delhi
Trade ministers and senior officials meeting in New Delhi on 19-20 March defended the role of the WTO as both an arbiter of trade disputes as well as setting the rules of the road for the multilateral trading system. Officials also met to discuss possible next steps for negotiations at the global trade club in the wake of the Buenos Aires ministerial conference last year, which ended without agreed negotiated outcomes.
According to the Indian government, representatives from around 50 WTO members participated in this week’s event, of which 27 participated with ministers or vice ministers. Also on hand was WTO Director-General Roberto Azevêdo. The gathering included a presentation from Indian Prime Minister Narendra Modi on the second day.
While China’s vice-minister and South Africa’s minister participated in the meeting, neither the US nor the EU were represented at this level. The US was represented by its new WTO ambassador, Dennis Shea, while Australia and New Zealand also sent their ambassadors to participate at the event. Russia’s chief trade negotiator Maxim Medvedkov was also present.
Many WTO members had hoped that the trade body’s eleventh ministerial conference, held in Buenos Aires last December, would take decisions on select negotiating areas and identify a roadmap for future work in others. However, the meeting ended without reaching any substantive agreements at the multilateral level, including on how to move forward on ongoing negotiations on topics such as agriculture, fisheries, and services. (See Bridges Daily Update, 14 December 2017)
Some participants were optimistic that the New Delhi meeting could contribute to rebuilding trust among the WTO membership, particularly in the wake of the Buenos Aires conference.
Indian Commerce and Industry Minister Suresh Prabhu told a press conference on Tuesday that “free and frank discussions” at the event had helped countries begin to clear the air following the Buenos Aires conference.
“I am sure that this particular meeting will be another building block for building trust, confidence and bringing countries together,” Prabhu said. Topics reportedly up for discussion in New Delhi included long-standing issues such as public stockholding for food security, as well as negotiations on disciplining harmful fisheries subsidies, among others.
As the event’s host, Prabhu said he would be releasing a chair’s summary on his own responsibility summarising the discussions.
According to a copy seen by Bridges, the summary noted that many interventions had emphasised “the importance of achieving progress on the Doha issues, especially agriculture, fisheries subsidies, and domestic regulation in services, while seeking to address the differences on the basis of pragmatic and flexible options.”
On agriculture, Prabhu’s concluding remarks noted that some interventions had also identified as priority areas “issues related to reforms in domestic support, a permanent solution on public stockholding for food security purposes, cotton, and an agricultural special safeguard mechanism.”
He also noted that several countries had highlighted the importance of concluding negotiations on fisheries subsidies by 2019 in order to help achieve the UN Sustainable Development Goal 14.6, which sets a 2020 deadline for scrapping subsidies to illegal, unreported, and unregulated fishing (IUU) and for banning subsidies that contribute to overfishing and overcapacity.
The Indian minister’s summary also made reference to some of the joint initiatives among groups of WTO members that were announced at the Buenos Aires ministerial.
These include statements or declarations on electronic commerce, investment facilitation, women’s economic empowerment, and micro, small, and medium-sized enterprises (MSMEs). The e-commerce and investment facilitation initiatives aim to lay the groundwork for future negotiations among interested members, while those on gender and MSMEs are not aimed at negotiations but instead focus on addressing knowledge gaps, sharing experiences and best practices, and fostering more in-depth and informed discussions on the issues involved.
“In many interventions it was emphasised that open, transparent, and inclusive discussions within the joint initiatives by the proponents of issues such as electronic commerce, investment facilitation, gender, MSMEs, etc., would deepen the understanding of issues and benefit all members,” Prabhu said.
He noted however, that some other members felt that “all negotiations at the WTO must follow the fundamental principle of multilateralism and that any other approach represents a threat to the multilateral trading system.”
The signatories to the e-commerce and investment facilitation meetings each held organisational meetings last week in Geneva, open to both those who signed the joint statements and to non-signatories alike. Separately, a workshop was held on gender-based analysis of trade on Friday 16 March as part of the programme of work for implementing the Buenos Aires Declaration on Trade and Women’s Economic Empowerment.
Azevêdo: Members must “match words with deeds”
For his part, Azevêdo welcomed the New Delhi meeting as an opportunity for renewed discussion, while noting the “animosity” and disappointment that was present at the Buenos Aires ministerial. “All members realise the seriousness of the situation, and the fact that we all together need to work to find a solution in all areas,” he told reporters.
“The spirit that I detected today is one that recognises that the solution lies in collective work,” he told reporters. He added that while the “constructive conversation” that emerged towards the end of the Buenos Aires conference had come too late, it could be built on now.
“Just pledging support for the system is not enough. We need to match words with deeds,” he added later in the press conference.
After the event, the European Commission’s Denis Redonnet wrote on social media site Twitter that the meeting served as “a useful moment of engagement at a time of stress for the multilateral trading system.” Redonnet serves as the Director for WTO, Legal Affairs, and Trade in Goods at the European Commission’s Directorate-General on Trade.
Trade sources told Bridges that the mini-ministerial could be seen as building on talks in January among a group of trade ministers on the margins of the World Economic Forum meeting in Davos, and ahead of an annual ministerial meeting in Paris next month within the context of the Organisation for Economic Co-operation and Development (OECD). (See Bridges Weekly, 25 January 2018)
Earlier on Tuesday, Azevêdo also warned participants that members must take urgent action to ensure the global trade body’s dispute settlement mechanism continues to function normally, in the wake of Washington’s move last year to block the start of selection processes for filling vacancies on the WTO Appellate Body.
That panel serves as the organisation’s highest trade court and currently has three spots vacant, out of seven total positions. Given that three Appellate Body members must sign off on any case, the court is at risk of being unable to function should the impasse continue into next year. A fourth position comes up for renewal in September.
Trade tensions looming
The meeting in the Indian capital also came amid growing concerns that planned US tariffs on imported steel and aluminium could spark responsive measures from other countries. These new duties are due to take effect on Friday 23 March, having been confirmed by US President Donald Trump earlier this month. Additional details regarding the tariffs, such as country or product exclusions, are expected to emerge later this week. (See Bridges Weekly, 15 March 2018)
In his concluding remarks, Prabhu said that in many interventions “deep concern was expressed at the serious threat posed to the credibility of the WTO rules and some of its cardinal principles, such as non-discrimination, by the cycle of recent unilateral trade measures and proposed counter-measures.”
In New Delhi, Azevêdo said that the WTO did not take a stance on this particular issue as an institution. However, he did reiterate to reporters that he was concerned that the US measures could lead to an escalation of retaliatory actions by other countries, while calling for members to resolve their differences using the WTO’s own mechanisms.
“My hope is that this is what’s going to happen at some point, that they will talk about how to handle this using the multilateral framework, because I think that’s the only way that we can avoid a very disruptive and unpredictable scenario in global trade,” Azevêdo said.
Although the US has characterised the tariffs as necessary on national security grounds, and has conducted the investigation under a 1960s era law that specifically refers to national security, other countries have indicated they are sceptical of this claim and prefer to see the new duties as safeguard measures under WTO rules. A more detailed report on the final duties and responses from US trading partners will be available in next week’s Bridges. (See Bridges Weekly, 15 March 2018)