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Talking Trade blog

A new awakening? The WTO and star wars

Published 22 December 2015

Last week two beloved institutions attempted to hit the reset button.  Both institutions started strong, capturing a certain kind of magic that included hope and optimism.  Both appeared to have taken wrong turns in mid-life that left many feeling alienated or just uninterested.  The weekend represented a new “toss of the dice” to rekindle the agenda for the future. 

It is likely too soon to tell how successfully both institutions managed their reboot. The early measures showed one group dominating headlines and generating staggering sums of money.  The other barely rated a mention in leading newspapers and websites. 

The franchise hauling in revenue, of course, is Star Wars.  The launch of The New Awakening  generated more than $500 million in ticket sales in the opening weekend. 

By contrast, the World Trade Organization (WTO) held a ministerial last week in Nairobi, Kenya, that limped to a finish line after a delay.  The biggest story from the event was something that did not happen—the final ministerial statement did not reaffirm the importance of the Doha Development Agenda (DDA).

Early signs may ultimately be misleading, of course.  The new Star Wars picture may rapidly vanish from public view, particularly with a planned zillion more sequels in the pipeline.  The WTO might take advantage of opportunities created by quietly killing off a plot line that was advancing nowhere.

The parallels between the two were striking.  Without spoiling too much of the plot, consider:

The latest Star Wars movie was not so much a refresh of the original than a remake of the 1977 movie (with a dash of the next two films thrown in).  It begins with a teenager wearing what appears to be linen struggling to eke out an existence on a barren desert planet.  Into this situation, insert one squat, round droid that becomes attached to our teenage hero. 

This droid is—wait for it—carrying a vital set of plans that are critical to the survival of a ragtag resistance force.  But the evil Dark Side knows that the droid is present and destroys the village.  Our teenage hero shows off an impressive range of skills, narrowly escapes with the droid and the plans, and is thrust into a galactic battle to save humanity. 

How does our hero escape the village carnage?  In a beloved spacecraft that, despite the passage of time and a complete lack of use for decades, still manages to leap off the ground and outrun all the existing aircraft (which are, strangely, also using exactly the same models and technology as before).   It flies to planets that are either all green and lush with trees or all snowy white and angular. 

Without giving away the limited plot of the movie, the adversary is using EXACTLY the same primary weapon that our ragtag group of heroes have faced twice before with eerily similar weaknesses.

The WTO has been stuck in a similar time warp.  The Doha Development Agenda (DDA) was first outlined decades ago.  It was launched with much fanfare in November 2001 in Doha, Qatar. 

The DDA represented a new hope.  Following the success of the Uruguay Round negotiations, the new WTO institution had a mandate to pursue trade agreements that went beyond tariff cutting for goods.  The very methods used to reach agreement would be new, with regular consultations that included every member. 

But as years turned to decades, the DDA remained stagnant.  The negotiating methods proved difficult to manage as the number of members soared to over 160 and the diversity of membership increased. 

The agenda got stuck in amber.  Basically, every time the organization might have tried something new, it got sent back to a desert planet to scavenge for spare parts.  Some members argued that nothing new could be attempted without first fixing old issues.  Given that every member has an effective veto over the actions of the army, the entire machinery ground to a halt. 

Technology, time and attention moved on while officials argued over tariff cutting formulas for agricultural goods.  This is not to argue that tariff cuts or agriculture are not important, but it is a bit like relying on a 40 year old spacecraft to outrun new competitors. 

The battle lines in the WTO got ever more complicated, as members organized themselves in various and proliferating groupings.  Perhaps the WTO could have used a droid with a map, or even a fragment of a map, to keep the effort on track.  Unlike Star Wars, WTO members cannot count on a villain wearing helpful black cape and face mask made from a trashcan.  Members probably could not agree on what adversary they are even trying to fight. 

Since the Dark Side in Star Wars seems unable to create a new approach to weapons or spacecraft or immense battle weapons, the rebel alliance refought old battles.  Something similar happened in the WTO as officials spent endless hours circling exactly the same territory over and over again.  They could not advance any other element of the agenda until tariff discussions for agriculture were completely addressed. 

The WTO’s version of victory last week was not a satisfying massive implosion of a planet with an enveloping roar, but was instead the accession of Afghanistan and Liberia to the grouping.   A subset of 53 members reached agreement on an extension of product coverage for information technology products (ITA2). 

Also, members agreed to limit the use of export subsidies and credits for agriculture in non-legally binding ways.  This sounds like a major accomplishment, but actually likely applies to very few.  Members can still subsidize agriculture (and lots of other things), just not directly for the purpose of exporting agricultural goods to other WTO members.  

The most relevant paragraph and meaningful element of the final declaration from Nairobi reads:

30. We recognize that many Members reaffirm the Doha Development Agenda, and the Declarations and Decisions adopted at Doha and at the Ministerial Conferences held since then, and reaffirm their full commitment to conclude the DDA on that basis. Other Members do not reaffirm the Doha mandates, as they believe new approaches are necessary to achieve meaningful outcomes in multilateral negotiations. Members have different views on how to address the negotiations. We acknowledge the strong legal structure of this Organization.

This is not exactly a light saber thrust through the heart, but in diplomatic terms it shows that change is finally coming to the WTO.  What shape it will take is not yet clear, particularly as decisions still have to be taken by consensus.

If this were Hollywood, the WTO just set itself up for the next movie—will our rebel alliance manage to achieve compromise in the future?  Will the battle be rejoined a fourth time with the same type of evil master weapon?  Will the ragtag alliance simply fold, content to sit back and hear legal disputes based on violations of rules written back when Luke Skywalker was a younger man?  Will our heroes be outgunned by a newly organized Dark Side with cutting-edge technology? Or will the parties find new battlefields entirely?  Stay tuned.

© The Hinrich Foundation. See our website Terms and conditions for our copyright and reprint policy. All statements of fact and the views, conclusions and recommendations expressed in this publication are the sole responsibility of the author(s).

Dr. Deborah 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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