Trade chiefs say WTO no longer sustainable, pledge reforms3 min read . Updated: 26 Oct 2018, 10:23 PM IST
The US gave tacit approval to the meeting but stayed away. China, India, S. Africa, Indonesia were not invited
Under the slogan of addressing “trade tensions" and rising “protectionism", 13 trade ministers took the first steps in Ottawa, Canada, on Thursday toward the launch of a new round of trade negotiations saying the current situation facing the World Trade Organization is no longer sustainable.
Without mentioning what they intend to do with the unfinished Doha trade negotiations that are still alive, the 13 trade ministers said they will “move forward urgently on transparency, dispute settlement and developing 21st century trade rules," according to the communique issued after two days of deliberations in Ottawa.
The 13 trade ministers from the European Union, Japan, Canada, Norway, Switzerland, Australia, New Zealand, Singapore, South Korea, Kenya, Brazil, Mexico and Chile—along with the WTO director-general Roberto Azevêdo—finalized a one-and-a-half page communique that include a hotchpotch of unspecified multilateral as well as plurilateral issues.
The US gave tacit approval to the meeting but stayed away. China, India, South Africa and Indonesia were not invited. India has already opposed attempts to launch a new round of trade negotiations without addressing the unfinished Doha agenda.
The communique says the 13-member coalition will act as a “catalyst" ostensibly for launching plurilateral negotiations in five areas—electronic commerce, investment facilitation, disciplines for micro, small, and medium enterprises, domestic regulation for services, and trade and gender. Though it did not mention that the negotiations will be launched at the WTO’s 12th ministerial meeting in Astana in June, 2020, it is already common knowledge that the 13 countries will go all out for the launch of new negotiations, said a South American trade envoy, who asked not to be identified.
The group will also simultaneously prepare the groundwork for the launch of negotiations by using the multilateral route in issues that would involve “flexible and open negotiating approaches" for “the market distortions caused by [industrial] subsidies] and other instruments" to create a level playing field. But the group did not indicate how the market-distortions will be determined.
Though the communique underscored the need to “unblock" the appointment of appellate body members to make the dispute settlement body effective, Canada’s trade minister Jim Carr who chaired the two-day meeting said “there should be [a] consideration for an alternative which would focus on mediation among disputants," according to the Washington Trade Daily of 26 October.
Effectively, the Canadian minister’s suggestion amounted to what the US trade representative ambassador Robert Lighthizer has insisted upon for the past two years. Lighthizer had said several times that Washington would prefer to go back to the GATT phase of negotiating the panel’s rulings as opposed to the current rule under which the appellate body’s decisions have to be implemented regardless of objections, said a trade envoy who asked not to be quoted.
The three main points of the communique cover the three functions—negotiation, dispute settlement and the WTO Secretariat—of the trade body. The underlying danger is that, by clubbing all three areas, work on two areas —preparing the ground for the launch of plurilateral negotiations and the transparency and monitoring role of the WTO—will suffer.
But work on dispute settlement reforms will be held hostage because the US is unlikely to move on filling the vacancies at the appellate body for unblocking the “systemic" crisis at the WTO, said trade envoys, who asked not to be quoted.
The Ottawa communique acknowledged that without an effective dispute settlement system that preserves the rights and obligations of WTO members, rules cannot be enforced. “Such a system is also essential in building confidence amongst members in the negotiating pillar," it insisted, emphasizing that “continued vacancies in the Appellate Body present a risk to the WTO system as a whole."
It wants to reinvigorate the negotiating function of the WTO by concluding negotiations on fisheries subsidies in 2019. Simultaneously, “rules must also be updated to reflect 21st century realities, such as the Sustainable Development Goals." The communique maintained that addressing modern economic and trade issues, and tackling pending and unfinished business is key to ensuring the relevance of the WTO. “This may require flexible and open negotiating approaches toward multilateral outcomes," it argued.
On “development", the Ottawa communique says it will “remain an integral part of our work," including exploring “how the development dimension, including special and differential treatment, can be best pursued in rule-making efforts". Finally, it wants to enhance the WTO Secretariat’s overall monitoring oversight.