Do the weak and divided outcomes of the 11th WTO Ministerial Conference signal that the World Trade Organization (WTO) is becoming another example of failed multilateralism?
Launched in 1995 as the world’s rulemaking organization on international trade, the stated primary purpose of the WTO is “to open trade for the benefit of all”. It seeks to act as a forum for negotiating agreements aimed at reducing obstacles to international trade. Its multilateral platform purports to provide a “level playing field” for all of its members. The end goal is to contribute to the economic growth and development of all its members, rich and poor alike.
Ministerial Conferences, held every two years, are the WTO’s major decision-making organ. The 11th WTO Ministerial (MC11), held in Buenos Aires December 10-13, 2017, was noticeable for its lack of accomplishment. It began with a whimper and ended with the consensus to keep the status quo intact. This outcome signals the inability of the organization’s members to reach agreement on a myriad of issues awaiting its attention.
Ministerial Decisions
- Members agreed to negotiate an agreement on Fisheries Subsidies to establish rules that prohibit the subsidies that contribute to overcapacity, overfishing, and IUU-fishing. Members again re-committed to meeting existing notification obligations required by the Agreement on Subsidies and Countervailing Measures.
- On E-commerce, Members agreed to maintain the status quo of not imposing customs duties on electronic transmissions. To keep alive the hope of negotiating a new Agreement, a subset of 71 countries comprising 77% of global trade (including the United States) separately announced a new initiative to begin exploratory work toward future WTO negotiations on trade-related aspects of electronic commerce.
- Members agreed to continue the status quo on TRIPS by yet again extending the “temporary” moratorium on “non-violation” cases. “Non-violation“ is shorthand for the technical question of whether there can be legal grounds for complaint about loss of an expected right under the WTO’s intellectual property agreement, even when the agreement has not been violated.
- The Ministers kept the status quo with regards to the Work Programme on Small Economies. Small economies face particular challenges integrating into the global trading system. They lack economy of scale and/or adequate resources. The Work Programme group was tasked with analyzing in further detail the challenges and opportunities small economies face when linking into global value chains. The group is to make recommendations to the General Council to disseminate results among the negotiating groups.
New Initiatives
A subset of interested members announced two other initiatives. As with e-commerce, these initiatives suggest areas on which the meeting was unable to arrive at consensus of the Members:
- On investment facilitation for development, 70 WTO members, (excluding the U.S.) announced plans to pursue discussions towards developing a multilateral framework on investment facilitation. The group accounts for around 73 percent of trade and 66 percent of inward foreign direct investment (FDI).
- On Micro & Small to Medium Sized Enterprises (MSMEs), 87 WTO members (excluding the U.S.) announced plans to create an Informal Working Group on MSMEs to discuss obstacles in international trade that present a significant burden to MSMEs. The group accounts for around 78 percent of world exports.
Other Outcomes
- For the first time in its history, the WTO addressed the issue of women in trade. 118 Members (excluding the EU and the U.S.) endorsed the Buenos Aires Declaration on Women and Trade which outlined actions to help women reach their full potential in the world economy. Priority areas include increased access to trade financing and participation in public procurement markets.
- Another first was the business forum held in conjunction with the Ministerial. The International Chamber of Commerce presented to the Members the recommendations from the Buenos Aires Business Forum on the future direction of the world trade agenda. They included strengthening the role of the WTO in response to global challenges and establishing a new work programme on priority issues for business.
Certainly, the inclusion of a business forum and recognition of the important role of women can only be seen as pluses. However, Declarations and new initiatives that are endorsed by a fraction of the WTO members make it difficult to consider the 11th WTO Ministerial Conference a success.
– In Part II, we examine the institutional factors that explain the weak and divided outcomes from the MC11.
