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Talking Trade blog

Making 2015 a year to remember at the WTO

Published 15 July 2015

At the last General Council meeting of the year in December, the World Trade Organization (WTO)’s Director General reminded ambassadors that the institution had many deliverablesto achieve in 2015. Roberto Azevedo said , “We have important work to do and real deadlines to meet. So let’s make sure it’s a year to remember.”

With six months remaining, it is a good time to take stock of how far the WTO has come in meeting its own objectives for 2015.  Although miracles can happen, it is already looking increasingly likely that the multilateral trading system will stumble badly on its way to the finish line this year. 

One deadline to be met was the ratification of the Trade Facilitation Agreement (TFA) signed with such fanfare in Bali, Indonesia, in December 2013.  Originally, countries agreed on a deadline of July 31, 2015. 

But members recognized the difficulties in meeting this objective and moved the goalposts even before Azevedo gave his speech in December.  In fact, WTO members ensured that they would never miss the deadline for TFA ratification by removing the finish line entirely.   Now there is no date by which members must submit necessary paperwork to proceed with implementation.

This may have been a good way to deal with a deeply troubling situation.  For the agreement to come into force, 2/3 of the WTO membership must agree.  However, as the original deadline approaches, only 8 countries (Hong Kong, Singapore, United States, Mauritius, Malaysia, Japan, Australia and Botswana) of the necessary 108 have actually submitted their paperwork. 

But now the WTO remains on track for ratification of TFA—whenever sufficient members opt to participate, the agreement will move forward.  No more irritating deadlines to meet or miss.

A second deadline is looming for the organization at the end of this month.  By the end of July, a work plan is due.  This plan is meant to lay out the path forward for the institution to address elements of the Doha Agenda.  It will not get done on time.

This is, quite frankly, almost hard to write.  Members are going to miss a deadline to create a work plan to discuss a path forward on an agenda that was first proposed more than 15 years ago and was formally launched in 2001. 

Officials began discussions again on this workplan more than six months ago.  The comments of Ambassador John Adank are instructive.  At the beginning of the process, he said, “I think that for those who had forgotten the issues, and the positions of each other on those issues, that the meeting served a useful purpose, at least to bring us back to where we were, although I don’t think it’s really given us a clear indication of where we will go—that will need significant change from where we are now.”

Some members are likely to argue that the workplan deadline is quite fungible.  In the past, the WTO routinely missed its own targets for completing workplans and agendas needed for big meetings or ministerials.  Officials will likely argue now that they can keep adjusting the workplan “deadline” until right up to late November for the upcoming ministerial in December.

But anyone who works in a large company will recognize the problems with this argument—big meetings with staff flying in from around the world usually require more than just an agenda.  For a meaningful outcome, everyone needs to start early on preparing background materials, figuring out the context for discussions, matching up likely outcomes with their specific regional needs and requirements, identifying gaps that must be addressed, and so forth. 

The groundwork must also be laid for compromises and for agreements across the myriad groups with issues of concern.   This takes time and, in spite of more than a decade now spent on negotiations, if the agenda is going to be significantly revised, reaching consensus on a new or altered set of outcomes will need more than a few days or weeks.

Another “deadline” of sorts that will be missed are the revisions of the Information Technology Agreement (ITA2).  Unlike most WTO commitments, the ITA applies to only a subset of members.  The original ITA entered into force in 1997.  It lowered tariffs on listed technologies and telecommunications products. 

But this agreement also contained a fatal flaw.  The list of covered products was fixed and has not been changed in the years since it was first negotiated.  Particularly given the rapid pace of change in IT, a frozen list means that record players are included but not new items like mobile phones. 

Repeated attempts to negotiate an ITA2 have foundered.  Officials thought they had reached an acceptable compromise late last year when the United States and China finally worked out their differences.  However, the deal jammed again when South Korea, Taiwan and China were unable to agree on coverage for flat screen panels. 

Despite hopes that ITA2 would be finally completed in early 2015, no breakthrough has been announced.

Any institution with more than 160 members and a widely diverse membership will struggle to meet its objectives.  But the pattern of missed deadlines should be of increasing concern. 

One deadline that cannot be missed is the commitment to hold a ministerial in Nairobi, in December 2015.   The absence of a workplan to guide negotiations and a series of missed deadlines do not inspire confidence in a successful outcome.  

Let us hope that ministers do not gather in Kenya and pledge to make “2016 a year to remember.”

© 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. 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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