Good news and bad news from the scrapped WTO Ministerial Conference

WTO members have more time to deal with issues that they might, at a pinch, agree on, but momentum could be lost too

Fingers crossed: ambassadors in Geneva and ministers in capitals should grasp the opportunity | Andrea Piacquadio, Pexels

New dates
On February 23, 2022, WTO members meeting as the General Council
agreed to reschedule the Ministerial Conference for the week of June 13

By Peter Ungphakorn and Robert Wolfe

What was lost by postponing the World Trade Organization’s 12th Ministerial Conference? Procedurally, not much. What happens next depends on whether WTO members make the best of the opportunity.

Before the conference was scheduled to start, we argued that the solutions to the impasse in the WTO must come from the capitals of the WTO’s 164 members before anything significant can be done at the WTO’s Geneva headquarters — in effect: “reform in capitals before reforming the WTO in Geneva”.

We still think that, but at least momentum has been created in some governments. The danger is that this opportunity will be lost.

Continue reading or jump to:
The good | The bad | The chasm | The real cost | Where next?

See also curtain-raiser: The WTO is regularly in crisis, but this time could be different

WTO organisation chart
The General Council can act on behalf of the Ministerial Conference. Click the image to see it full size, or follow the link to see the WTO’s original version

The goodBack to top

The delay doesn’t matter much, procedurally. The WTO General Council has full powers to act on behalf of the Ministerial Conference. The ministers can later rubber-stamp what their officials in Geneva have agreed. If they are ready to agree.

The sad truth is, it never seemed likely that ministers could agree on anything of substance. WTO members evaded an embarrassing failure because the meeting could not be held as scheduled, November 30–December 3, 2021. Instead, it has been postponed indefinitely (the official description) or abandoned until another is convened, depending on what happens.

The challenge now is to keep up the pressure

Also good, the Ministerial Conference already had an effect, even without taking place. It focused minds and produced a lot of work in the weeks and months leading up to its scheduled start, even if hard work did not always mean progress. That’s one of the benefits of regularly scheduled ministerials.

The challenge now is to keep up the pressure.

One deal was promised, to streamline domestic regulation of services among only part of the membership, a “plurilateral” negotiation among a critical mass of the willing. The participants went ahead and announced their agreement anyway, on December 2.

The rest of the agenda was difficult if not impossible.

Ministers might have ironed out their differences on a couple of statements. But the deadlocks seemed intractable with only four days to go, when the meeting was scrapped.

The badBack to top

Take the proposed main statement from the meeting. WTO members couldn’t even agree on what to call the document. For now it’s a draft “outcome document”.

“WTO reform” was possibly the single most important outcome sought from the Ministerial Conference, even if the best to be expected was agreement on future work, rather than actual decisions that would reform the WTO.

In square brackets are “dispute settlement function, negotiating function, and monitoring and deliberating function”

The only agreed wording in the draft is on the need for reform, and that members “commit to work towards” it.

The rest of the section on reform is a tangle of options pulling in multiple directions, including entire alternative paragraphs.

In square brackets — meaning some members object to these words — are “dispute settlement function, negotiating function, and monitoring and deliberating function”.

Is there any doubt that they are the three areas of WTO work that need most attention? And that they are important for “development”? At least a subsequent paragraph — apparently acceptable to all — would call for urgent discussions on dispute settlement, but apparently for some countries, not as part of “WTO reform”.

The many disputed points in the draft reflect deeper underlying differences and distrust among the members.

Some, such as India and a few allies (but by no means all developing countries) consider the biggest need for reform to be “development”. For them, that means greater exemptions (“policy space”) from the disciplines of the WTO agreements.

India and its allies also apparently object to the way the response to the pandemic is being drafted by New Zealand ambassador David Walker. Walker is acting as a “friend of the chair”, in this case of Honduras ambassador Dacio Castillo, the current General Council chair.

It’s unclear whether those members have raised the issue in public, but the objections have found their way into a letter from non-governmental organisations and seem to be in the draft statement.

And yet it is commonplace in the WTO to use senior ambassadors or other delegates as “friends of the chair” to coordinate with members on one big task.

Chasm: members are far apart on how best to negotiate | Roberto Nickson, Pexels
Chasm: members are far apart on how best to negotiate | Roberto Nickson, Pexels
The chasmBack to top

One of the implications of all of this is to deepen the controversy over how new rules are negotiated. The WTO could disappear into this chasm if members are not careful.

Quite simply, consensus has been hard to find for years now, except in a handful of issues. To get around the consensus problem, members have started negotiating in smaller groups “of the willing”, which they see as the only way for now to reform the negotiating function.

If a way is not found to allow plurilateral negotiations under the WTO umbrella, countries interested in new rules will simply go elsewhere

In practice, this is overwhelmingly a majority view among the membership. At the time of writing, the number of members participating in the five main “plurilateral” talks ranges from 68 (domestic regulation in services) to 115 (gender issues); with 149 (91%) participating in at least one subject and only 15 (9%) not participating in any.

The completed plurilateral deal on domestic regulation in services captures almost all the main traders in services (China, EU, US and more) — but not India.

India and South Africa object to such deals, citing numerous provisions in the 1994 agreement that created the WTO. They say negotiating in smaller groups violates the multilateral nature of the WTO, even though the services deal is set up in a way that would allow them to obtain the benefits while contributing nothing.

Their objections are reflected in the square-bracketed text on negotiations in the draft statement for the Ministerial Conference.

If a way is not found to allow plurilateral negotiations under the WTO umbrella, countries interested in new rules will simply go elsewhere, which will further undermine the multilateral basis of the WTO.

The concern of India and South Africa spills over into the differences about how WTO reform should even be discussed. That paragraph of the draft statement is festooned with square brackets. The EU has proposed a working group on WTO reform. India and its allies counter that the talks must take place in the General Council. So the debate gets bogged down in the question of what type of committee, rather than what reform should look like.

(India and South Africa also have a reservation marked on a paragraph on gender and trade.)

The real costBack to top

Another way of answering the question of what was lost is to lament the missed opportunity to narrow the gap between Geneva delegations and capitals. Those gaps can be a significant problem, as one of us (Robert Wolfe) found in joint-research with Bernard Hoekman.

It is also important for ministers to understand the full panoply of views of other members, which they get better in person. All of us learn more from conversations with our peers than in briefings from our subordinates.

Would having ministers discuss the agenda items among themselves have helped? We don’t know. Sometimes ministers can be persuaded to be flexible. Sometimes their positions harden because it makes them look strong to the voters or other constituencies back home.

… the missed opportunity to narrow the gap between Geneva delegations and capitals

Ministers can also add impetus to issues. Something like: “I am tired of hearing about fisheries subsidies rather than my real priorities. I don’t care what you have to fudge.” We can’t know if that would have worked.

At a pinch, maybe the ministers might have persuaded each other to unblock one or two difficult issues on fisheries subsidies— meaning yielding ground on all sides — but there are considerably more than one or two difficult issues here.

There might have been agreement on future work — the “cacophony of cans being kicked down the road” — or some declaration of good intent, or, by some miracle, an agreed statement on the WTO’s response to the pandemic.

We do know that a deal on agriculture was out of the question, except possibly an agreement to exempt the World Food Programme from export restrictions, but even that was blocked.

The intellectual property proposal is much more complicated than simply whether to accept or reject “a waiver”. The redrafted proposed text makes no attempt to compromise, taking extreme positions on a range of subjects.

And because members were deadlocked on the waiver, this spilt over into deadlock over David Walker’s separate document on the WTO’s response to the pandemic.

Maybe on issues like the Walker draft, ministers could have acted like practical politicians and compromised, boosting the WTO’s image.  

Which brings us back to our original point about needing to move in and between capitals. Even if members agree to discuss reform, or any of the other issues in the General Council, maybe ministers are needed to prick the Geneva bubble in order to address the real issues where compromise is needed.

Where next?Back to top

The Ministerial Conference co-chair from Kazakhstan and deputies from Australia, Barbados and Uganda proposed holding the postponed meeting in the first week of March 2022.

Trade sources say members were divided on this, when they met in the informal General Council on December 2, 2021. This is not surprising since no one knows what the epidemiological situation and travel restrictions will be by then.

WTO Director-General Ngozi Okonjo-Iweala was clearly worried about losing momentum. She urged the Geneva delegations to keep working. Two topics topped her list: the WTO’s response to pandemics and curbing harmful fisheries subsidies. She said these should be done by the end of February 2022 for ministers to endorse later.

“Seven billion people are waiting for us on TRIPS [intellectual property] and pandemic response. And 260 million people are waiting for us on fisheries subsidies,” she told the informal meeting.

She added that Geneva representatives should seek to prepare clean texts, or at most texts with one outstanding issue to be resolved, for ministers. This would permit them to finalize or bless an outcome even if they have to do so remotely.

Are ambassadors capable of getting that close to agreement on their own, when they were not in November? And even if they do, will ministers be able to find the necessary compromises on Zoom? Fingers crossed.

Robert Wolfe is Professor Emeritus of Policy Studies, Queen’s University, Kingston, Ontario. He has written extensively on WTO reform issues. Follow him on Twitter: @BobWolfeSPS.

February 24, 2022 — adding dates of rescheduled Ministerial Conference

Image credits:
Fingers crossed | Andrea Piacquadio, Pexels licence
WTO organigram | Peter Ungphakorn CC BY-SA 4.0
Chasm | Roberto Nickson, Pexels licence

Author: Peter Ungphakorn

I used to work at the WTO Secretariat (1996–2015), and am now an occasional freelance journalist, focusing mainly on international trade rules, agreements and institutions. (Previously, analysis for AgraEurope.) Trade β Blog is for trialling ideas on trade and any other subject, hence “β”. You can respond by using the contact form on the blog or tweeting @CoppetainPU

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