Trade Officials Weigh Impact of New Initiatives in Post-Buenos Aires Era
Trade officials from intergovernmental organisations and various missions weighed in on Wednesday 28 February regarding the WTO’s future in light of the various multi-country initiatives that emerged at the organisation’s ministerial conference last December. They also weighed what these could mean for the global trade system, and where multilateral approaches are still preferable.
The meeting took place at the Graduate Institute in Geneva and featured WTO ambassadors or deputy heads of mission, Belgium’s deputy prime minister, the heads of the World Trade Organization (WTO) and the International Trade Centre (ITC), and the deputy head of the UN Conference on Trade and Development (UNCTAD). It also comes just a few months after the WTO’s Eleventh Ministerial Conference wrapped up in Buenos Aires, Argentina.
At the ministerial, WTO members were unable to endorse substantive negotiated outcomes, agreeing only on a decision to continue talks on disciplining harmful fisheries subsidies and separate decisions involving the renewal of long-standing moratoriums on duties on electronic transactions and on non-violation and situation complaints under the organisation’s intellectual property rules. (See Bridges Daily Update, 14 December 2017)
However, in Buenos Aires various coalitions of countries put forward joint ministerial statements on advancing discussions regarding e-commerce, investment facilitation, and micro, small, and medium-sized enterprises (MSMEs), along with a declaration on gender. These initiatives do not encompass the full WTO membership and only some statements have referred explicitly to the prospect of future negotiations. Those statements on MSMEs and gender, for example, are not aiming for eventual negotiations.
What these new initiatives mean for the global trade club, for participants, and for countries that are not currently taking part, remain open questions in Geneva circles and are expected to feature prominently in trade debates going forward.
Given the results of the Buenos Aires conference, WTO Director-General Roberto Azevêdo called for flexibility in this “new normal,” noting that there were ways to be flexible both on the plurilateral front or at the multilateral level. Examples of the former include, for instance, most-favoured nation (MFN) plurilaterals where the benefits are extended to everyone but the commitments taken on only by parties, as opposed to plurilaterals whose benefits and commitments are limited to parties.
Regarding the latter, he flagged the structure of the WTO’s Trade Facilitation Agreement (TFA), which allows developing countries to notify which commitments may require transition periods and/or technical assistance and capacity-building before they can be implemented.
The new, multi-country initiatives which emerged from the Buenos Aires conference, he said, appear to have been in response “to the risk of paralysis brought about by objections to any conversation on issues not already covered by the Doha Work Programme,” referring to the multilateral negotiating round that was launched at the WTO in 2001 and has not been concluded.
He also said these new initiatives should be housed in WTO and should be open and transparent, where everyone and anyone has chance to shape the conversation “if they so desire,” and thus allow for participation to be as open as possible.
“If we drive these conversations away from the WTO, the danger is that they will not be open to all. And they most likely will come back to the WTO later on. When they do, those who were not included in the discussions will have missed the opportunity to make their contributions and shape the outcomes,” he said.
“So my preference would always be for any effort to be fully open and transparent, where anyone and everyone has a chance to shape the conversations if they so desire,” the WTO chief continued.
“In my view, the future is not plurilaterals. The future is flexibility. Now, plurilateral initiatives may be part of it. But I have set out that there are different ways to achieve flexibility in multilateral agreements as well… Flexibility will not lead to fragmentation,” he said.
Questions of participation, dispute settlement
Questions of participation and whether the new initiatives would have adverse impacts on non-participants were also raised by panellists, with various speakers noting the importance of transparency, as well as the approach to the subject matter involved, along with the potential value of a most-favoured nation approach.
“I have no objection to likeminded members discussing new issues” said Chinese ambassador to the WTO Xiangchen Zhang. He added, however, that “only when the multilateral trading system is strong and robust will the plurilateral approach play a positive and supplementary role.”
“For the likeminded members, they should not exert pressure on other members who are not ready to participate,” the Chinese official added, urging instead that members not involved in these initiatives should be welcome to participate when they chose.
He noted also that the reason behind some members not joining yet is that they have an interest in safeguarding their policy space or lack the capacity to get involved, so there would need to be a targeted solution that would support their participation.
Another issue raised by panellists was whether any negotiated outcomes from these new initiatives should be subject to the WTO’s dispute settlement rules.
“For such a plurilateral system to work, the rules that will be agreed upon in this context have to be enforceable through the dispute settlement system of the WTO. They have to be enforceable and we have to make sure that the rules we agreed to are applied in a way which do not lead to deviation with the multilateral rules of the WTO,” said EU ambassador to the WTO Marc Vanheukelen.
Chris Wilson, the deputy chief of the US mission to the WTO, noted that there are several questions that remain to be addressed with these new initiatives. These include, for example, what are and should be the limits of most-favoured nation application, along with how much to tie these to the WTO’s dispute settlement mechanisms.
“It’s our perspective, though, that we don’t need to get ourselves tied totally into knots on these questions at this stage,” he said.
Multilateral approach to fisheries, agriculture
Multiple ambassadors at Wednesday’s meeting also indicated that while plurilateral approaches may work in some areas, other subjects would still require multilateral solutions.
Both the EU and the US referred to disciplining harmful fisheries subsides and addressing domestic agricultural support and other farm trade topics in this context.
“Of course we should keep plugging away at multilateralism where a multilateral approach is required,” said Wilson, while clarifying that fish and agriculture are not the only areas that may qualify for this.
The US official also noted that while plurilaterals may hold promise for future WTO negotiations, the “structural process will not, in our view, necessarily overcome some of what we see as very fundamental obstacles to negotiating successfully in the WTO.”
Under the previous Obama administration, the US had been one of a group of “likeminded partners” which had pledged to examine whether a plurilateral approach to the fisheries subsidies issue was possible, while also working on the multilateral track. (See Bridges Weekly, 22 September 2016)
Vanheukelen also said that fish and agriculture are “clearly multilateral subjects” and WTO will have to keep working on that track.
Eloi Laourou, Benin’s ambassador to the WTO, called for maintaining efforts to reach multilateral deals on fisheries subsidies and domestic support, and that global talks should continue “so that nobody will be left behind,” referring to the UN Sustainable Development Goals (SDGs) in that context.
He also added that Benin wants to see results in the multilateral trading system because it cannot immediately be at ease in plurilaterals, citing capacity constraints and the implementation of some past plurilaterals.
Laourou also said that while members should continue promoting the multilateral trading system, this would not prevent those who are interested in pursuing plurilaterals from doing so.
The coming month is slated to be a busy one for the WTO calendar, with an informal meeting of delegation heads under the organisation’s Trade Negotiations Committee (TNC) and a formal General Council meeting planned for next week.
Also coming up is a mini-ministerial in New Delhi, organised by India. Invitations have gone out to a few dozen countries or groups, including both major advanced economies such as the EU, US, Australia, China, and New Zealand, as well as smaller developing nations across different regions. Multiple sources said, however, that the final list of attendees was not yet clear, as countries weigh whether to go and who to send.