20 years on, still no WTO deal to curb overfishing

July 15th had been circled in red on the calendars of many trade watchers for months. The hope, if not expectation, had been for WTO trade ministers – convened for a virtual meeting - to finally reach agreement to curb subsidies to the fishing industry. These subsidies have contributed greatly to a dangerous depletion in global fish stocks and pose a significant environmental hazard. The negotiations have taken on an out-sized importance as a litmus test for both the WTO’s relevance as well as the effectiveness of the new Director General, Dr. Ngozi Okonjo-Iweala.

Here are the key takeaways:

• Failure to reach a deal is a disappointment, but not an unexpected one.
• On the surface, an agreement to limit environmentally damaging fishing subsidies should be non-controversial and relatively easy to conclude.
• The fact that it has proven to be unachievable illustrates just how deeply dysfunctional the WTO has become. It is reasonable to question whether the full WTO membership is capable of agreeing on anything. Negotiators reportedly had a lengthy struggle simply to agree on the definition of “fish”.
• Successfully reaching agreement would have injected at least some positive momentum into the WTO and provided a counterpoint to the hardening perception that the WTO is essentially dead in the water.
• Failure to reach an agreement unfortunately fuels the more pessimistic assessments of the WTO’s relevance.
• For years, the focal point for trade liberalization efforts has been shifting away from the WTO and towards bilateral or plurilateral agreements, as confidence in the global trade body ebbs. This latest development will simply fortify that trend.

What does this say about the WTO Director General?

• WTO Director General Okonjo-Iweala deserves high marks for her energy and efforts. Failure to get the ball across the goal line is not a negative reflection on her. It is an indication of the very limited power vested in the DG position. The DG can cajole, encourage, and act as an honest broker, but that’s about it. Such exhortations are unlikely to change the cost-benefit calculations for individual WTO members.

What does this say about the WTO as an institution?

• Failure to reach agreement on fisheries subsidies is a symptom of a broader malaise effecting the WTO. Members are more inclined to pursue narrow self-interests rather than thinking in terms of mutual benefit and a common cooperative endeavor, both in terms of trade and the environment.
• There is a large and growing rift between the perspectives of developed and developing members. Developing members are more insistent on asserting the need for special and differential treatment, which often translates into permission to continue practices that would otherwise be prohibited. Developed members are less willing to submit to new disciplines to achieve global goals when a sizable portion of the membership is given a free pass. The result is gridlock.
• This rift is exacerbated by members which self-designate themselves as “developing” long after they have graduated to developed world status.

What does this mean moving forward?

• Negotiations will continue and agreement in the future is still possible, so this is not the end of the story. But the longer it takes to reach what should have been a slam-dunk agreement, the lower the pay-off will be in terms of credibility and momentum building.
• The statements delivered by the ministers have drawn into somewhat sharper relief where the sticking points lie. Whether or not that gets us closer to an agreement remains to be seen.
• These negotiations have dragged on for 20 years, blowing through numerous “deadlines” and raising obvious questions. Are open ended negotiations lacking in concrete deadlines the best way to proceed? Would actual deadlines focus attention and force negotiators to move to “end game” positions more quickly?
• Time is running out for the WTO to demonstrate that it can play a meaningful role. Unfortunately, there are no quick or apparent fixes for WTO dysfunction. We are approaching the point where the WTO, at least in terms of its function as a negotiating forum, could be beyond salvation.
• The future of the WTO lies in the hands of its 164 members. For those members who still believe the WTO is worth saving, the question is: what are you waiting for?

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