Rebuilding trust among countries

WTO's success lies in collective work and all its negotiations must follow the fundamental principle of multilateralism

Trade ministers and senior officials meeting in New Delhi on March 19 and 20, defended the role of the World Trade Organisation (WTO) both as an arbiter of trade disputes as well as setting the rules of the road for the multilateral trading system. Officials also met to discuss possible next steps for negotiations at the global trade club in the wake of the Buenos Aires ministerial conference last year, which ended with no results. 

Representatives from around 50 WTO member countries participated in the event, of which 27 were trade ministers/vice ministers. The WTO Director-General Roberto Azevedo also presided over at the meeting. The gathering included presentation by Prime Minister Narendra Modi. While China’s vice-minister and South Africa’s minister participated in the meeting, neither the United States (US) nor the European Union (EU) was represented by their trade ministers. It was the new WTO ambassador, Dennis Shea, who represented the US while Australia and New Zealand also sent their ambassadors to participate at the event. Russia was represented by their chief trade negotiator Maxim Medvedkov.

Some participants were optimistic that the New Delhi meeting could contribute to rebuilding trust among the WTO members, particularly in the wake of the Buenos Aires conference failure. Commerce and Industry Minister Suresh Prabhu informed that “free and frank discussions” at the event had helped countries to clear the air following the Buenos Aires conference. Topics reportedly up for discussion in New Delhi included long-standing issues such as public stockholding for food security, as well as negotiations on disciplining harmful fisheries subsidies, among others. 

Many interventions had emphasised “the importance of achieving progress on the Doha issues, especially agriculture, fisheries subsidies, and domestic regulation in services, while seeking to address the differences on the basis of pragmatic and flexible options”. 

On agriculture, Prabhu’s remarks noted that some interventions had also identified as priority areas “issues related to reforms in domestic support, a permanent solution on public stockholding for food security purposes, cotton, and an agricultural special safeguard mechanism.”

Illustration: Binay Sinha

He also noted that several countries had highlighted the importance of concluding negotiations on fisheries subsidies by 2019 in order to help achieve the UN Sustainable Development Goal, which sets a 2020 deadline for scrapping subsidies to illegal, unreported, and unregulated fishing and for banning subsidies that contribute to overfishing and overcapacity. 

The statements also included declarations on e-commerce, investment facilitation, women’s economic empowerment, and micro, small, and medium-sized enterprises (MSMEs). The e-commerce and investment facilitation initiatives aim to lay the groundwork for future negotiations among interested members, while those on gender and MSMEs are not aimed at negotiations but instead focus on addressing knowledge gaps, sharing experiences and best practices, and fostering more in-depth and informed discussions on the issues involved. 

Prabhu noted that some other members felt that “all negotiations at the WTO must follow the fundamental principle of multilateralism and that any other approach represents a threat to the multilateral trading system”. 

The signatories to the e-commerce and investment facilitation meetings each held organisational meetings in Geneva, open to both those who signed the joint statements and to non-signatories alike. Separately, a workshop was held on gender-based analysis of trade on March 16 as part of the programme of work for implementing the Buenos Aires Declaration on Trade and Women’s Economic Empowerment. 

For his part, Azevedo welcomed the New Delhi meeting as an opportunity for a renewed discussion, while noting the “animosity” and disappointment that was present at the Buenos Aires ministerial meeting. “All members realise the seriousness of the situation, and the fact that we all together need to work to find a solution in all areas. The spirit that I detected today is one that recognises that the solution lies in collective work”, he said.

The mini-ministerial could be seen as building on talks in January, among a group of trade ministers on the margins of the World Economic Forum meeting in Davos, and ahead of an annual ministerial meeting in Paris next month within the context of the Organisation for Economic Co-operation and Development (OECD).  

Earlier, Azevedo also warned participants that members must take urgent action to ensure the global trade body’s dispute settlement mechanism continues to function normally, in the wake of Washington’s move last year to block the start of selection processes for filling vacancies on the WTO Appellate Body. 

That panel serves as the organisation’s highest trade court and currently has three spots vacant, out of seven total positions. Given that three Appellate Body members must sign off on any case, the court is at risk of being unable to function should the impasse continue into next year. A fourth position comes up for renewal in September. 

The Delhi meeting also came amid growing concerns that planned US tariffs on imported steel and aluminium could spark responsive measures from other countries.

Azevêdo said that the WTO did not take a stance on this particular issue as an institution. However, he did reiterate he was concerned that the US measures could lead to an escalation of retaliatory actions by other countries, while calling for members to resolve their differences using the WTO’s own mechanisms.

In his concluding remarks, Prabhu said that in many interventions “deep concern was expressed at the serious threat posed to the credibility of the WTO rules and some of its cardinal principles, such as non-discrimination, by the cycle of recent unilateral trade measures and proposed counter-measures”. 

The writer is author of World Trade Organisation: Implications for Selected Sectors of Indian Economy. He is also a retired Professor of International Trade. E-mail: vasu022@gmail.com