With the approach of the World Trade Organization (WTO) Ministerial Conference in two weeks, conversations and actions aimed at shaping the agenda of WTO MC12 are underway. Originally scheduled for June of 2020 in Kazakhstan, this 12th Ministerial Conference (MC12) will now be held from November 30th to December 3rd, 2021, in Geneva, Switzerland.
The WTO Ministerial Conference is the organization’s highest decision-making organ. So, it is perhaps fitting that MC12 is being held in its headquarters to remind Ministers of the tremendous power the organization holds and the huge issues it faces. The WTO holds responsibility for ensuring that trade flows smoothly, predictably, and freely. Scarcity, high prices, blockages being experienced now by supply chain disruptions attest to the negative consequences of disrupted trade flows.
While the above issues are not the WTO’s fault, as MC12 nears the large chinks in the organization’s health and ability to perform its core functions are evident. How the MC12 agenda takes shape will indicate how willing the organization is to take on these issues.
WTO Ministerial Conferences have traditionally been synonymous with the launch or conclusion of negotiating rounds on new agreements containing the rules to govern trade. The existential threats of climate change and health pandemics are clamouring for attention. Discussion on whether changes to the WTO’s intellectual property regime are needed to assure equitable distribution of vaccines and therapeutics will most definitely be on the agenda.
Meanwhile, older issues remain unaddressed and unresolved. The 1995 Agreement on Agriculture was acknowledged even then to be incomplete. Absent implementable provisions to address the key concerns of developing countries, negotiations for an updated Agreement have lagged with devastating consequences for food security. Expectations of progress on this issue are mixed.
While there is some optimism that the 20-year-old negotiations on Fisheries Subsidies could be successfully concluded at MC12 there is as yet no final agreement on the text. The mandate handed down from the last Ministerial Conference was to secure an agreement on rules to eliminate subsidies for illegal and unregulated fishing and that contribute to overcapacity and overfishing. An agreement on Fisheries Subsidies would be only the second negotiation concluded on a multilateral basis, i.e., by all WTO members.
The remaining negotiations are taking place on a plurilateral basis, i.e., only among interested WTO members. It remains to be seen whether these talks can conclude at MC12 in agreements on Services Domestic Regulation, E-Commerce, and Investment Facilitation for Development. A larger question raised by the growing number of these plurilateral agreements is the extent to which they may be undermining the multilateral premise of the WTO.
Dispute Settlement Function
The operations of the WTO Appellate Body (AB) have been paralyzed, impairing this key function. Yes, disputes can still be heard by ad hoc panels whose reports must be approved by the Members – typically a pro forma step. Many countries, however, were sold on the benefits of joining the WTO because of the creation of the Appellate Body of qualified jurists who would hear appeals from the panel process, which can often be influenced by disparities in power and resources of the disputing parties.
WTO Deputy Director-General (DDG) Jean-Marie Paugam acknowledged the need to reopen dialogue with the United States, the instigator of this crisis, with a view to developing a work plan to reform the WTO Dispute Settlement process. Whether this dialogue can lead to successful outcomes during the MC12 remains to be seen.
Through another plurilateral arrangement, the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), some members have agreed to use the arbitration procedures of the WTO Dispute Settlement Understanding as an interim measure. Nevertheless, the dispute settlement functions of the WTO remain impaired. The MPIA also reinforces the way in which plurilateral agreements are increasingly being used to bypass the tortures of the WTO decision-making process.
DDG Paugam’s speech also touched on the need for reforms to the WTO architecture in general. It is an inescapable and unfortunate reality that some of the organization’s challenges arise from its structure. Decisions are made by consensus – any one member can stop progress. The “single undertaking” approach to trade negotiations – nothing is agreed until all is agreed. The term “developing country” is arrived at by self-definition – entitling China, Chile, and Cameroon to the same special and differential treatment exemptions.
Nor can one ignore the deep divide between the perceived interests of developed and developing countries. Groupings such as the Organization of African Caribbean Pacific States (OACPS), Least Developed Countries (LDCs), Small Island Developing States (SIDs), and Land-Locked Least Developed Countries (LLDCS) bring into MC12 a host of issues that may not even make it into the agenda, despite declarations encapsulating their visions for the organization. These we will explore in our next post.
Finally, we will all be watching Dr Ngozi Okonjo-Iweala as she assumes the very public role of shepherding a WTO Ministerial Conference, hopefully to success. At the same time, the dysfunction which left the organization leaderless for six months is an urgent reminder of the need for reform to be on the agenda of MC12.
I am a seasoned international trade and customs attorney, and policy adviser for various companies and governments with a demonstrated history of successfully developing and implementing sustainable and dynamic trade programs. I am experienced in creating partnerships with various business-support organizations to drive compliance and growth in the international market.