WTO members achieve breakthrough, but the tough part is what happens next

It might seem churlish to draw attention to what was lacking, but the achievements that were rightly hailed are not the end of the story.

Anabel Gonzalez’s tweet superimposed on her photo of Room D

See also
The successful WTO Conference saw one big failure: agriculture | Have we just seen the funeral of the WTO ‘single undertaking’? | Our scorecards

By Peter Ungphakorn and Robert Wolfe
POSTED JUNE 30, 2022 | UPDATED JUNE 30, 2022

As a beautiful sun rose over the World Trade Organization’s lakeside headquarters in Geneva on June 17, 2022, exhausted delegates sealed a package of decisions and declarations that would give the beleaguered WTO new direction for the next couple of years.

Much has already been written about the achievement of the 12–17 June WTO Ministerial Conference, after it was extended by almost two days of sometimes chaotic round-the-clock bargaining.

Most of the analysis focuses on what was achieved, often with a sense of relief that the WTO was back on track, mixed with a warning that much still needs to be done.

Perhaps the biggest success was that a package was agreed by ministers, including an Outcome Document — which the previous ministerial conference failed to do.

Often missing is recognition of how hard it was to achieve this limited outcome.


THE ACHIEVEMENTS
In a nutshell:

Also missing: a closer look at what was not agreed or not clarified and why.

Two in particular stand out.

One is the binned draft on agriculture.

The other is the almost-empty statement on “WTO reform”, surely the biggest challenge the WTO faces.

It might seem churlish to draw attention to what was lacking.

But the achievements that were rightly hailed are not the end of the story. Work on most of them has only just begun.

The failures may also offer an indication of hazards that lie ahead, even for the outcomes that were produced.

Continue reading or jump to:
Consensus-building failure: agriculture | Too many blanks: reform | Reframing the agenda | Plurilaterals | Ukraine, Russia and Green Rooms | Find out more

As we consider what the conference did and did not produce — the cacophony of cans kicked down the road — we need to keep some key points in mind.

First, one Ministerial Conference does not define the WTO. Much of what the WTO does was already working well enough before the meeting. This is a point we have both stressed frequently but is too often overlooked in public discussion. See, for example this article on the routine work in the WTO, and this one.

It took months and years of effort in WTO councils and committees to get to the point where ministers could scrape the square brackets (indicating disputed parts) off the texts. And most of the organisation’s challenges today are as they were before ministers arrived. Even the successes require more work whose outcome is uncertain.

Second, as Robert wrote in his analysis of the “single undertaking” and the need for trade-offs, large “rounds” of negotiations are now impossible.

That means WTO members still have to work through how to deal with negotiations and agreements among only part of the membership — the “plurilaterals” and “joint-statement initiatives”. They have to enable the negotiations to be open and inclusive so that the agreements can be integrated into the multilateral framework.

That also requires new thinking on special treatment for developing countries.

Third, our scorecards show there are still big issues to be tackled that were not on the Ministerial Conference agenda:

  • least-developed-countries’ graduation
  • subsidies and countervailing measures
  • anti-dumping
  • market access for non-agricultural market products
  • trade in services
  • lowering barriers on environmental goods and services

And one major topic was not even on our scorecards: climate change


Ministers cannot return home to say ‘job done; over to the Geneva delegations’

All of this brings us back to another point we have made repeatedly. Ministers showed enough flexibility to produce the Geneva 2022 package. But what they have left does not release them from the onus to remain engaged.

They cannot return home to say “job done; over to the Geneva delegations”, not least because those delegations may be part of the problem. Had “Geneva” shown more flexibility and ambition during the preparations, ministers might have been able to go further.

That abdication certainly won’t work for agriculture, dispute settlement or plurilaterals. It won’t even work with unfinished business such as the stripped-down Article 5 of the Fisheries Subsidies Agreement. That was originally a page and a half on “subsidies contributing to overcapacity and overfishing”. It is now seven lines on “other subsidies”, mainly about taking “special care”.

If capitals are not to drop the ball, more frequent ministerial conferences might be a good idea. Perhaps the drift in Geneva in recent years was due to the long gap between ministers talking directly to each other.  

Consensus-building failure: agricultureBack to top

In agriculture, the text that was shredded seemed innocuous. It consisted entirely of plans for negotiations after the conference, with no commitments on what the results would look like.

Ministers cannot really claim that they — or their delegations in Geneva — didn’t have enough time. The present chair of the negotiations, Costa Rica’s ambassador Gloria Abraham Peralta, had drafted and redrafted the proposed ministerial text for almost two years, since she took over in July 2020. And still the differences were so big that the ministers gave up trying. The text was binned. (Details are here)

Optimists comfort themselves by saying members are still working under the negotiations’ original mandate (Article 20 of the 1994 Agriculture Agreement). But that doesn’t hide what is really absent in the talks: a willingness to move away from the uncompromising red lines that doomed the farm talks in the now defunct Doha Round negotiations.

Confusing messages from ministers don’t help. The worst was from India’s Piyush Goyal.

India’s position ever since 2014 has been that the status quo is unacceptable, particularly when price support is included in food security stockholding programmes.

Goyal repeated that in his formal statement to the Ministerial Conference.

And yet at the close he told Indian journalists he was happy that the agriculture text had been discarded — meaning continuing with the status quo — because India’s programmes for supporting farmers would be unaffected.

Strictly speaking he was right. India’s programmes have been shielded from legal challenge under the deal agreed in 2014. But satisfaction is not what India had been saying for the last eight years.

The nature of the deadlock and the incoherence in various statements do not bode well for the future of more difficult negotiations.

Keeping the energy going: ambassadors Pimchanok Pitfield (Thailand, left) and Dacio Castillo (Honduras, former General Council chair) conducting their version of a small group meeting during the round-the-clock closing days of the Ministerial Conference | Pimchanok Pitfield on Facebook
Too many blanks: reformBack to top

A number of commentators have welcomed the results on “WTO reform”, mainly because there is now an agreement to discuss it, and a deadline (“by 2024”) to make dispute settlement fully-functioning again.


‘WTO REFORM’
in Outcome Document:

“… We commit to work towards necessary reform of the WTO. While reaffirming the foundational principles of the WTO, we envision reforms to improve all its functions. The work shall be Member-driven, open, transparent, inclusive, and must address the interests of all Members, including development issues. The General Council and its subsidiary bodies will conduct the work, review progress, and consider decisions, as appropriate, to be submitted to the next Ministerial Conference.

“… We acknowledge the challenges and concerns with respect to the dispute settlement system including those related to the Appellate Body, recognize the importance and urgency of addressing those challenges and concerns, and commit to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024.”

But other than that, what the “Outcome Document” says is empty.

There is nothing on what “reform” will address.

Dispute settlement? Yes, except it’s vague on whether to keep or scrap appeals, to maintain or discard the present two-stage legal procedure. US Trade Representative Katherine Tai needs to start being clear on what the Biden Administration really wants.

Improving transparency and scrutiny of trade measures? Re-thinking how an increasingly diverse group of developing countries could be categorised? Re-thinking special treatment for them? Tackling problems in negotiations, including among groups-of-the-willing when other countries are not ready? Re-assessing the role of the Secretariat? Relaxing the consensus rule for decisions?

No. They have all been mentioned in the WTO, but not in the Outcome Document.

The slow progress up till now on a proposal on enhancing transparency and notification requirements, and the even slower progress on another proposal on strengthening the working practices in councils and committees, means movement on a topic as big as “WTO reform” is unlikely to be quick. We can expect months of debate even over which topics should be included on the agenda, let alone how to improve committees as deliberative bodies, including by better integration with the Secretariat’s research and analysis.

Some of it will happen anyway. Helpful references to improving transparency are in the texts on food insecurity and the WTO response to the pandemic. Enhanced transparency and a new committee to monitor commitments is one of the major achievements of the new Fisheries Subsidies Agreement.

Reframing the agendaBack to top

More difficult than fixing the WTO machine is reframing the agenda for renovating the rules. This would start with old rules that have not kept up with massive changes in what is traded, and by who, and covers a range of issues such as services, state-owned enterprises and more.

It also includes the many “development” issues that have been proposed under “WTO reform”, from reclassifying developing countries (for example China, India and other emerging economies) to rethinking the special treatment they receive. This is so sensitive politically that movement is unlikely anytime soon, although some countries are pressing hard on it from all sides.

There might just be an opportunity for trade-offs (“if you agree to special treatment for developing countries we might agree to talk about transparency”) but those are controversial political issues so the bargaining may be a long way off.

It all depends on how engaged people are in Geneva and in capitals, and how much flexibility they are willing to show.

Rules, schedules of commitments or both: How the present plurilateral agreements have been inserted into the WTO legal structure (Click the image to see it full size)
Rules, schedules of commitments or both: How the present plurilateral agreements have been inserted into the WTO legal structure (Click the image to see it full size)
PlurilateralsBack to top

Perhaps , the hardest and most difficult discussion includes procedures for conducting and concluding plurilateral talks (the joint-statement initiatives), involving controversially only part of the WTO’s membership.

This is seen as a way around the difficulty of securing consensus among 164 members without formally abandoning the consensus principle.

Sorting this out is becoming more urgent.

Some of the current talks could be concluded by the time of the next Ministerial Conference, which is pencilled in for late 2023. Some of those plurilateral deals may need to be annexed formally to the current WTO agreements, and that requires consensus among the whole membership to allow participants to discriminate against non-participants.

If the participants apply their agreement equally to the rest of the membership (most-favoured-nation, MFN — meaning non-participants are free riders) then any associated rules can simply be included in the schedules (or lists) of commitments on allowing market access.

But a plurilateral agreement can discriminate against non-participants in the rules and the market-opening commitments or both.

The Government Procurement Agreement does that. Both the rules and the commitments are inserted under Annex 4. The plurilateral talks on electronic commerce, might be heading that way, although participants have not said yet what kind of commitments they will make.

The problem is persistent opposition from a minority of countries, particularly India and South Africa. That has to be sorted out if this really is the way ahead for WTO negotiations.

Photo of Wills on the phone during all an all night session
All-round praise: Santiago Wills’ handling of the fisheries subsidies agreement received acclaim | WTO
Ukraine, Russia and Green RoomsBack to top

Finally, did the process set up in Geneva help or hinder?

One of the complexities was the war in Ukraine with some countries refusing to participate in a dialogue that included Russia. This problem has been slowing down work for months.

On the opening day of the Ministerial Conference, about three dozen delegations from the US, EU and other WTO members are reported to have walked out of the room before the Russian economic minister spoke in the meeting’s first “thematic” session.

In her closing press conference Director-General Ngozi Okonjo-Iweala said using small groups of members for hard bargaining was needed in order to allow talking to continue without more boycotts over the Ukraine war.

It’s likely that small group negotiations were going to be needed anyway because breaking a deadlock in an open meeting of the full membership is almost impossible.

And that meant there were bound to be “Green Room” meetings involving 20–30 key players and representatives of coalitions.

Accounts differ on how the final package was produced. Consensus was achieved at a price, most notably the watered-down declaration on the response to the pandemic, the Fisheries Subsidies Agreement, and the binned text on the agriculture negotiations.

Opinions also differ on how effective Okonjo-Iweala was, but she must take credit for pushing hard to ensure that a compromise — and therefore consensus — could be found on the intellectual property waiver for COVID-19 vaccines.

One issue was indeed sorted out bilaterally. This was between the US and China on whether China would be ineligible to use the waiver on COVID-19 vaccine patents or whether a voluntary opt-out would be enough.

In the end the White House agreed on a voluntary but binding opt-out, the message reaching Geneva so late that the version of the final text gavelled through still did not include the bilateral resolution, and a replacement had to be issued immediately. (The fact that the US and China could sort out an issue bilaterally is a plus. Will it happen more often?)

If that sounds disorganised, then what happened on the final two days and nights seems to have been even more chaotic. That, plus a large dose of fatigue might have helped. There is also unconfirmed speculation around a random air traffic control problem at Geneva that prevented some ministers from leaving and allowed time for additional persuasion, for example between the EU and India.

Conflicting accounts from insiders suggest that even the meetings described as “Green Room” were a variety of configurations in a variety of places.

(Skip the photos)

Two photos: Delegates press against the podium in Room D; and a busy scened in the real Green Room
Endgame: the final days saw talks in a range of formats and locations | Mary Ng and Dacio Castillo on Twitter
Photo or Ministerial Conference delegates meeeting in Room D
Neither-nor: the meetings in Room D at the end were neither the full membership nor was anyone turned away | Dacio Castillo on Twitter
Photo: meeting of a group of ministers in the formal setting of the WTO library
Another ‘Green Room’? The WTO library hosted a meeting to set up a coalition of trade ministers on climate change | WTO/Matilda Setutsi Frimpong

Some insiders are full of praise for how the negotiations approached their conclusion on June 16, particularly a meeting in the WTO’s middle-sized Room D. This turned out to be larger than a Green Room. No one was turned away, insiders say, although the room is not big enough to hold all ministers and their delegations. Some insiders said delegates even negotiated in the corridors.

Some others say that Room D meeting did not really achieve much, and that the final touches were made in smaller groups. The phrase “Green Room” seemed to be transferrable between the real one (the director-general’s meeting room), larger but similarly invitation-only sessions in the more formal setting of the library, and sessions open to anyone interested in the bigger Room D.

Descriptions of how well the meetings were organised also vary. The one coordinator who seems to have received all-round praise was Santiago Wills, the Colombian ambassador who chairs the talks on fisheries subsidies.

Wills’ decision to strip down one key article in the agreement was an inspired move that allowed consensus to be reached, Okonjo-Iweala said.

Alice Tipping, a think tank analyst who has been working on fisheries subsidies for many years, and her colleague Tristan Irschlinger called the deal “a remarkable achievement” despite being watered down.

But in two senses, the fisheries subsidies agreement is not done. In various ways, it is a message for the whole package.

First, it contains unfinished business with the threat that it will self-destruct if that is not completed.

Second, it still has to be ratified by at least two thirds of the membership before it can take effect. And even then, it only takes effect in the ratifying countries.

Both are a reminder that WTO ministers, their officials in capitals and their delegations in Geneva cannot take their foot off the gas on this or any other subject.

Find out moreBack to top

Some other analysis of the results of the Ministerial Conference (some paywalled):

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

Updates: none so far

Image credits:
• Chaotic ending: Room D talks on e-commerce (main photo) | Anabel Gonzalez on Twitter
• All-round praise: Santiago Wills’ handling of the fisheries subsidies agreement received acclaim | WTO
• Endgame: the final days saw talks in a range of formats and locations | Mary Ng and Dacio Castillo on Twitter
• Neither-nor: the meetings in Room D at the end were neither the full membership nor was anyone turned away | Dacio Castillo on Twitter
• Another ‘Green Room’? The WTO library hosted a meeting to set up a coalition of trade ministers on climate change | WTO/Matilda Setutsi Frimpong

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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