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What to expect from WTO MC13

Published 30 January 2024

The WTO’s 13th Ministerial Conference takes place in Abu Dhabi in late February. Without a clear agenda, MC13’s chance of success is low. With only three weeks to go, the agenda is still wide open. There is no shortage of critical topics.

The World Trade Organization (WTO) is preparing to hold its 13th Ministerial Conference (MC) next month in the United Arab Emirates. These gatherings of the WTO’s highest decision-making body bring together its 164 members and are meant to take place every other year. Every MC represents an important opportunity for trade ministers to take stock of progress within the organization and to chart a path for the future.

While the potential agenda for trade ministers to consider is wide, there are only three weeks left for wrapping up details. Given the increasing stress on the global trading system, MC13 might have presented a critical opportunity for engagement. However, the dysfunction of the WTO is likely to be reflected in a weak agenda, limited deliverables, and little clarity on the way forward.

The WTO, launched with fanfare in 1995, has three main objectives: to craft global trade rules, to provide transparency for existing rules, and to adjudicate disputes over members’ adherence to WTO rules and obligations.

Unfortunately, members have struggled to manage these three goals. Negotiations have been moving extraordinarily slowly for decades with limited progress on a handful of items. The dispute settlement mechanism ceased to function properly years ago and efforts to fix the Appellate Body have not met with much success. Thus, members are left with transparency as the only remaining objective.

Part of the problem, as an earlier Hinrich Foundation report noted, is that the membership has been unwieldy, with 164 members trying to achieve consensus outcomes on some challenging topics. Getting to yes on any issue has been fraught.

There isn’t even agreement on whether the past round of comprehensive talks to lower trade barriers and revise trade rules that started in 2001, called the Doha Development Agenda (DDA), is dead, moribund, or still ticking on. If it is dead, it may be possible to start again with a fresh set of ideas. If it is moribund, then members should be thinking about how to revive some or all the agenda and get things moving again. If the talks and the mandate are still in place, then it is important to make progress on some aspects of the original agenda.

Because the WTO would require consensus to make a decision on the state of the DDA, members have opted to simply move on with differing viewpoints on past efforts. But, unfortunately, the difficulties in reaching an agreement are not so easily swept under the carpet. A lack of consensus on the status of past negotiations is impeding current progress.

One of the biggest obstacles to moving ahead on a draft agenda for MC13 has been over what can be agreed upon, or "harvested" in trade jargon. These decisions rest, in part, on an understanding of what is possible in the wake of any partial agreement and what becomes more difficult.

Take one example that highlights the problem. The original DDA included agriculture as the first item for inclusion. The previous Uruguay negotiating round had successfully added agriculture as a separate topic to the multilateral agenda in a robust way. Because lowering trade barriers on agriculture is always highly sensitive to domestic pressures, government commitments in Uruguay were relatively modest. The round closed with an in-built commitment to put agriculture onto the agenda for the next round to consider ways to deepen and broaden coverage for members.

But in the decades since the DDA started in 2001, agriculture has continued to bedevil negotiators in Geneva. There is now just one agricultural issue on the agenda at MC13: public stockholding and subsidies. Getting this issue addressed, however, requires decisions by members on their future commitments on agricultural trade. If the potential list of agricultural items to be discussed continues to narrow, resolution of each individual issue, like public stockholding, becomes more important.

The WTO is operating now with a temporary "fix" of continuing discussions on the topic until a resolution can be found to the problem of what to do when developing countries purchase food stocks for food security purposes by using subsidies above an agreed limit. In practice, the problem currently applies to only one member, India, but the larger argument is about whether the issue can be settled on its own or must be part of a larger package for cutting all types of domestic farm support entitlements. In the end, while the topic was meant to be resolved at MC13, it currently appears that the temporary fix will be extended.

Public stockholding is not the only subsidy issue causing challenges to the MC13 agenda. Negotiators have been hard at work trying to nail down an issue that remains from a 2022 fishery subsidies agreement: the text is not yet in place to address subsidies which contribute to overcapacity in the global fishing industry and overfishing that should be banned. This issue, in turn, has complicated talks among groupings of members, including rules for smaller players, different treatment for developing countries, and the management of distant-water fishing subsidies.

Fishery talks have been underway for years, with an agreement (sans subsidies language) ready to come into force as soon as 110 members ratify it. Given that notifications of ratification remain at roughly half the required number about a month from the launch of the ministerial conference, it is not obvious whether delegates will be able to celebrate the ratification of a multilateral outcome at MC13.

Two items that will also not be announced at the meeting are decisions on possible reform of the dispute settlement mechanism or, indeed, any substantive outcomes related to the issues of WTO reform beyond something members are calling "reform by doing", such as improving the planning and communication around meetings. While ministers meeting in Abu Dhabi may discuss these topics informally, officials are not yet in a position to take decisions on either issue.

Part of the delay in tackling major reform is "sequencing." There are a couple of items that are teed up for approval at MC13. Members have agreed on a plan to help smaller economies integrate better into the global economy. A desire to get some issues successfully delivered as a pretense at progress means that larger topics are being postponed.

A potentially more challenging approval process is pending for two deals negotiated as plurilaterals, one on regulation of domestic services and another an agreement on investment facilitation. Both are ready to be announced at MC13, but the process could be imperiled by a larger discussion among ministers about the appropriateness of plurilateral deals.

These two plurilaterals are not even the most challenging ones for inclusion in MC13. Negotiators on the Joint Statement Initiative on E-Commerce are still pressing ahead with lining up a package that could be approved in Abu Dhabi. Thirteen items are currently "parked", or set aside, and might be bundled together for ministerial review. Talks are proceeding with mounting intensity to see if a solution can be found in time for presenting the text to the ministers.

There is also the controversial issue of what to do about the current customs moratorium on electronic transmissions, which needs to be renewed at MC13 or it will lapse. While this topic has flown largely under the radar, businesses are belatedly mobilizing in the face of growing concerns that the moratorium really will fall this year.

One bright spot on the MC13 agenda, however, will be the inclusion of two new members, Timor Leste and Comoros. In the face of a rather gloomy picture overall for the WTO, it is worth noting that governments are still working hard to become part of the multilateral trading system. The key reason is that, for all the difficulties of the current institution, it still provides an important measure of support and certainty for members.

Ministers are also scheduled to engage in dialogue over the issues of trade and the environment. The WTO helped host a "Trade Day" at the recent United Nations Climate Change Conference, or COP28, negotiations. To build on this momentum, WTO members are discussing potential ways to leverage the existing Trade and Environment work program to better fit sustainability issues for the future. Absent political decisions to outline the parameters of an acceptable agenda, negotiators in Geneva are not going to be able to get very far in addressing issues on their own.

MC13 will run from February 26-29. Past ministerials have sometimes come down to the wire, with decisions made at the final hour, including late into the night. Officials are working with a draft agenda and are busy confirming that most of the elements included for the meeting are ready for ministerial approval or that the range of issues for discussion at the event have been narrowed sufficiently to be resolved on site. Given the state of trade, it may be time to reconsider this approach — with a lack of consensus about the best pathways forward, it may be more appropriate to let ministers raise topics and start rolling up their sleeves, as they are preparing to do with trade and the environment, to figure out where the global trading system goes from here.

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Dr. Elms is Head of Trade Policy at the Hinrich Foundation in Singapore. Prior to joining the Foundation, she was the Executive Director and Founder of the Asian Trade Centre (ATC). She was also President of the Asia Business Trade Association (ABTA) and the Board Director of the Asian Trade Centre Foundation (ATCF).

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