WTO News: “WTO can be changed by culture change rather than rules”
“We must redouble our efforts to raise awareness of the importance of the WTO and the role of freer and fairer trade in improving the standard of living of ordinary men and women,” said Pradeep Mehta, Secretary General of CUTS International, a leading public policy body. from India. He was making opening remarks during a webinar organized by CUTS to discuss the future of the WTO.
The programme, entitled “The future of the WTO or the WTO of the future?” and the second in a series following the just-concluded 12th WTO Ministerial Conference (MC12), saw a number of high-profile speakers address the way forward for WTO reform and how MC12 was a stepping stone to a future-ready WTO. It was moderated by Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission of India.
González acknowledged three factors that were instrumental in the success of MC12: the perseverance and role of WTO Director-General Ngozi Okonjo-Iweala in leading from the front, the pragmatism shown by ministers of trade and a general willingness to compromise. She observed that some “common sense, achievable and forward-looking principles” were the need of the hour, which could guide WTO reform work in the future. Above all, she noted that a “fully functioning global trading system needs a fully functioning dispute settlement system.”
Anabel warned that
a one-size-fits-all approach to all WTO negotiations risked pushing negotiating activity outside the institution. She acknowledged the value of consensus decision-making, but also said it was difficult to achieve and may not be suitable for all trade-related issues.
Tim Yeend, Associate Secretary, Department of Foreign Affairs and Trade, Australia, observed that plurilateral agreements (agreements involving less than all WTO Members) are an integral part of the multilateral system, especially when they are concluded inclusively. Such agreements provide an easier environment for finding negotiated solutions and ultimately serve to foster long-term multilateral consensus. Australia has been a strong supporter of plurilateral Joint Statement Initiatives (JSI) at the WTO, particularly on issues such as e-commerce.
He also noted the need for creative approaches to WTO dispute settlement, including the Multi-Party Interim Appeal Arbitration (MPIA) arrangement which is currently in force and counts Australia among its participating members. The MPIA was conceptualized as an interim procedure until such time as the WTO Appellate Body remains unable to rule on the appeals.
Regarding agriculture, he observed that it was still difficult to make progress on inheritance issues and that it was time to go beyond the clichés.
Simon Evenett, Professor of International Trade, University of St. Gallen, Switzerland, stressed the need to ensure that the momentum of MC12 does not falter, as happened after the Ministerial Conference of Bali in 2013. On the Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver for Covid-19 related patents, Simon raised questions about the extent to which this was a meaningful way forward .
He also pointed out that trade stalemates at the WTO were not only the result of events in Geneva, but were also spillovers from domestic trade frictions in countries. It is therefore necessary to strengthen support for trade multilateralism in the country, which would then generate favorable winds in Geneva.
Victor do Prado, senior researcher at the Brazilian Center for International Relations, noted that at every ministerial conference there is a set of imponderables. He acknowledged that MC12 was a very important and welcome stepping stone, but also said that the real test was what the WTO could achieve at the next MC13. Victor addressed various pressing issues related to WTO reform, including transparency, plurilateral agreements and dispute settlement.
Stephen Olson, senior fellow at the Hinrich Foundation, said we need to adjust expectations about what the WTO can and cannot accomplish. In his view, many of the results of MC12 were just “talk talk deals.” While acknowledging the crucial role of the WTO, he lamented that it could no longer act as an arbiter of world trade because its rules were outdated.
Hamid Mamdouh, senior counsel at King & Spalding LLP, highlighted the increasingly complex nature of trade policy issues, especially those involving regulatory issues such as digital trade. He pointed out that today there is a “trust deficit” in the business world vis-à-vis the functioning of the WTO, which also needs to be addressed when discussing WTO reform.
Above all, Hamid stressed the need for a return to fundamentals, stressing that the greatest success of the WTO has not been in terms of liberalizing trade or opening up markets, but in guaranteeing the predictability and stability through a rules-based system.
Summarizing the discussion, Ahluwalia felt that MC12, while not an outstanding success, was not a failure. By succeeding in some areas and keeping the ball rolling in others, the WTO remains relevant. He also observed that decision-making by consensus had resultant failures to arrive at decisions, suggesting a review of the rule.
In his opening remarks earlier, Ahluwalia mentioned the central role of the United States as a “benign hegemon” in maintaining confidence in the global trading system. He observed that as the relative economic strength of the United States eroded over time, an equally benign hegemonic grouping did not take its place, which was a factor in reduced confidence in economic globalization in its together.