WTO Modernisation: Ministers Arrive in Ottawa for High-level Trade Talks
A meeting of over a dozen trade ministers is underway in Ottawa, Canada, this week, with participants set to weigh possible ideas for updating the WTO that they can then bring back to discussions with the rest of the global trade club.
The 24-25 October event began with an opening reception and dinner on Wednesday 24 October, with the event due to get fully underway on Thursday morning local time. Canada, as the event’s host, has described the meeting as involving a “small, representative group of WTO members committed to supporting and strengthening the multilateral trading system.”
“Canada played a key role in building the multilateral trading system of the last century, and we will not see it eroded,” said Jim Carr, Canadian Minister of International Trade Diversification, in a news release previewing the event.
He elaborated further in a video interview released by the Canadian government, saying that “we know that the WTO is not perfect, but we know it’s good and we seek to make it better. So we’ve invited these like-minded nations from all over the world to see if we can’t come up with a consensus for reform that we will then roll out to other members of the WTO.”
Expected attendees include ministers from Australia, Brazil, Chile, the European Union, Japan, Kenya, Mexico, New Zealand, Norway, Singapore, South Korea, and Switzerland. Senior officials and vice ministers from this group had met in September in Geneva, Switzerland, for preliminary discussions ahead of the Ottawa meet.
The provisional schedule for Thursday includes an opening session with introductory remarks, with the rest of the day split into segments on chosen themes. The first involves “improving efficiency and effectiveness of WTO monitoring and transparency functions,” while the second involves “safeguarding dispute settlement.” The third and last theme is “creating 21st century trade rules.”
The gathering will close with a session outlining what subsequent steps the group will take, opening up later to a press conference at the end of Thursday. The ministerial-level meeting comes at an especially challenging period for the global trade club, with the organisation’s Appellate Body now down to the minimum number of judges to rule on cases. The US has blocked the start of process to appoint new judges or renew existing judges’ terms, citing a series of systemic and procedural concerns, even as nearly 70 WTO members have repeatedly backed a proposal to launch the process for selecting new judges.
Additional, the use of unilateral trade measures by some major economies, particularly the US, has become increasingly common, despite warnings from international agencies that continued trade tensions, uncertainties, and trade-restrictive measures could have a dampening effect on trade growth and the health of the global economy. (See Bridges Weekly, 18 October 2018)
Canadian discussion paper
To date, informal documents on modernising the WTO have been circulated by Canada and the European Union. The EU Commission made its paper public in mid-September, days after G20 trade ministers met in Mar del Plata, Argentina, and backed a statement citing an “urgent need to discuss events in international trade and ways to improve the WTO to face current and future challenges.” (See Bridges Weekly, 20 September 2018)
Meanwhile, working groups that include WTO reform on their agenda have emerged in multiple configurations. For example, the subject is being discussed in a trilateral setting between the EU, Japan, and the US; bilaterally between China and the European Union; and now in the Canadian-led grouping.
The Canadian discussion paper is now a public document and lays out in detail a series of options for countries to consider, while referring to these options as being “illustrative,” rather than “exhaustive.” While calling for “creativity and flexibility,” the paper also notes that “the most realistic choice of instrument in the near term will likely need to be plurilateral in participation.”
Plurilaterals could either be open, in which those who choose to take on commitments extend those benefits across the WTO membership, or closed, where the benefits are extended only to those involved. Otherwise, pursuing accords as regional trade agreements could be an option.
The paper is broken down into themes, which align with the themes of the different ministerial-level discussion segments planned for Thursday. On the first theme, which focuses on improving the WTO’s monitoring function, the paper suggests that countries structure their work around developing better incentives for meeting the organisation’s notifications requirements, and potentially updating the same.
It also suggests making changes to how the organisation’s regular bodies function so that discussions in those forums can be “more timely and relevant” and bring together “multiple bodies and information from diverse sources.” That section continues to say that strengthening the WTO’s regular bodies could be a way to defuse trade tensions that might otherwise escalate into formal legal disputes.
On the second theme of dispute settlement, the paper again suggests finding ways to avoid bringing so many cases to the organisation’s dispute settlement branch for adjudication. “Aging trade rules, the increasing complexity of disputes, and an erosion of self-restraint combine to overburden the dispute settlement system,” the paper says.
It also says that the legal proceedings involved in WTO cases can be “made more flexible and adaptable to the diverse nature of disputes,” suggesting that this could be another way to relieve some of the strains that the system is currently facing.
Lastly, it suggests that countries consider “updating and ensuring appellate review,” structuring that discussion around two main areas: the first would examine “whether the Appellate Body has, through its clarifications of WTO provisions, added to the rights and obligations of WTO members,” and look at options for providing issue-specific guidance that could improve the process. The second would be focused on the Appellate Body’s “systemic and procedural practices.”
On the third and final theme on crafting trade rules fit for the current era, the paper notes that members will need to talk much more in depth on what their “priorities” should be, along with considering whether to go for multilateral, plurilateral, or regional trade agreements.
“While no WTO member should be expected to take on obligations to which it did not consent, likewise no member should expect to be able to prevent others from moving forward in various configurations in areas where they are willing to make greater commitments, which could vary from political statements to more ambitious binding agreements, e.g. plurilateral initiatives,” the paper says.
Additionally, the paper suggests that members consider using an approach similar to that used in the WTO’s Trade Facilitation Agreement (TFA) that accounts for countries’ differing capacities and needs. The WTO’s TFA allows developing countries to designate which obligations they can implement immediately, as opposed to which ones will require a transition period and/or assistance – an approach that the Canadian paper suggests could provide a “precedent and possible blueprint” for ensuring future agreements have a strong “development dimension,” with some tweaks.