This is a guest post by several people from the Research Chair on New Challenges of Economic Globalization, Laval University, Quebec City, Canada: Carla Gomez, Ph.D. Researcher; Antoine Comont, Ph.D. Researcher; Van Anh Ly, Ph.D., Deputy Director of the Research Chair on New Challenges of Economic Globalization; Richard Ouellet, Full Professor of International Law, Faculty of Law and Graduate School of International Studies; Holder of the Research Chair on New Challenges of Economic Globalization.
The 13th Ministerial Conference of the World Trade Organization (WTO) took place two weeks ago in Abu Dhabi and delivered timid results. Despite all the hard work of the Organization and its DG Ngozi Okongo-Iweala, Members failed to reach agreements on most of the topics on the agenda. As the AFP justly phrased in a press article dated 1st March 2024, there was a “failure on the major issues of fisheries and agriculture, and a half-hearted rescue of the electronic moratorium, plunging the organization into the unknown”. While the results of this conference are indeed less significant than the DG’s “cautious optimism” at the beginning of last week suggested, some advances remain noteworthy, and the side events organized in parallel with the negotiations testified to the growing interest both of civil society in the organization and of the organization in the new challenges of this century. As representatives of the Research Chair on New Challenges of Economic Globalization, we were in Abu Dhabi and attended the MC13 with the status of an NGO. We share here the fruits of our observations and reflections on the Conference.
Mixed results from the negotiations
Accession of two new Members – First, it is noteworthy that the organization welcomed two new Members at the start of the ministerial conference. The ministers approved the accession of the Comoros and Timor-Leste to the WTO.
New commitments on services domestic regulation – The importance of services in the globalization process having been recognized by the WTO and its Members, the latter were able to agree on new disciplines concerning services domestic regulation and the facilitation of its regulatory procedures. As the WTO noted in a news item dated 1st March 2024, this aims at making “the regulatory environment more conducive to business and can help particularly micro, small and medium-sized enterprises as well as women entrepreneur”, making it the first commitment in a WTO agreement to improve gender equality in trade-induced services procedures. The 72 Members supporting the new disciplines have consequently strengthened multilateral rules on trade in services.
Continuation of the moratorium on e-commerce – Members agreed to maintain the moratorium on e-commerce, despite the fact that not everyone wanted it, and agreed on a program of work on the issue. The Ministerial decision points out that Members commit to “re-invigorate the work under the Work Programme on Electronic Commerce” and “instruct the General Council to hold periodic reviews on the Work Programme”. It also refers to the continuation of current practice “of not imposing customs duties on electronic transmissions until the 14th Session of the Ministerial Conference or 31 March 2026, whichever is earlier”.
Ongoing work on the fisheries subsidies – The results might be disappointing regarding fisheries subsidies but there are some positive evolutions. At MC12, Members had made an Agreement on Fisheries Subsidies (Fish 1) to counter illegal fishing and related harmful subsidies. To enter into force, this agreement requires two-thirds of WTO Members to ratify it, requiring 110 Members’ approvals. By the end of MC13,71 WTO Members were willing to implement it. The WTO noted that “ten WTO Members - Brunei Darussalam, Chad, Malaysia, Norway, the Philippines, Rwanda, Saudi Arabia, South Africa, Togo, and Türkiye - deposited their instruments of acceptance of the Fisheries Agreement, […] putting the historic agreement for ocean sustainability on track for entry into force at a record pace”. And while “Fish 1” is underway, a second draft (Fish 2) was due to be concluded at MC13 on issues that could not be adopted in Fish 1 – mainly related to overfishing –, but no agreement was reached. Nevertheless, the DG noted that MC13 had led to a breakthrough in negotiations on the issue of fisheries subsidies and that the way had been paved for MC14 on that crucial issue for environment, the oceans and the lives of people dependent on marine resources.
Renewal of the moratorium on Trade-Related aspects of Intellectual Property Rights – At MC13, Members agreed not to initiate complaints under the TRIPS Agreement while the TRIPS Council further examines the “scope and modalities for complaints” as set out in the “TRIPS Non-Violation and Situation Complaints” Decision of 17 June 2022. There was no consensus on the question of renewing the TRIPS waiver adopted at MC12, although Members agreed on the importance of working on the issue.
Ongoing discussions on the dispute settlement reform – The dispute settlement mechanisms issue might be WTO’s long-lasting deadlock. At a time when the United States is still blocking the renewal of WTO appellate body’s members in the dispute settlement mechanism - rendering the mechanism partially inoperative since 2019 - the situation seems to be stalling. No compromise has been reached. It should be remembered that the objective of having a functional DSB in 2024 was set at the MC12 in Geneva in 2022. Even though we are only at the start of 2024, the imminent approach of the US elections is making the way out of the crisis more complex by the day. The USTR and the current administration will have less and less leeway to put an end to a crisis endorsed by Donald Trump, who happens to be the only Republican in the presidential race... Of course, alternative solutions have been proposed by some Members, who are now turning to the plurilateral arbitration route of the MPIA to settle their disputes at the appeal stage; the others appealing into the void. However, Members are not abandoning the mechanism while not agreeing on solutions: some disputes are still referred to WTO panels, and Members have committed to continuing negotiations to reach a mutually satisfactory solution “by 2024” and restore a “fully and well-functioning dispute settlement system accessible to all Members”. A Special Meeting of the General Council document has been circulated on that subject on 16 February 2024 stating that “the dispute settlement system is a vitally important element of the WTO system, and its reform is a top priority for Members”. The annex of this document is taken from the report made by Marco Molina of Guatemala, Facilitator for the dispute settlement negotiations. This text is the basis for the current negotiations, reviewing the first instance procedure and covering everything but the appeal phase. As it is stated in the document, it is considered that the “discussions on appeal or review mechanism are not intended to single-handedly resolve all the interests and concerns identified by Members”. Thus, even though the reform of the appeal phase remains a big concern, “Members should continue reviewing each chapter, ensuring that all their interests and concerns are addressed”. It therefore appears that the entire dispute settlement mechanism is subject to potential reform. To be more specific, the annex especially sets out “alternative dispute resolution procedures and arbitration” with recourse to good offices or mediation, goes back on panel proceedings with defined time limits, specifies the rules on compliance and sets out “guidelines for adjudicators”, including elements on treaty interpretation. For the appeal phase (as well as for the entry into force and transitional provisions), it states that the work is in progress.
Lack of convergence on agricultural issues – The agricultural question was the subject of intense discussions at MC13. As we mentioned in an earlier post here on 21st February 2024, negotiations on agriculture were a priority for a vast majority of WTO Members and in a way a prerequisite for smooth negotiations in general. Despite the importance attached to the agricultural issue, no consensus was reached. There were deep disagreements around the issue of public stockholding (PSH) to ensure food security. Many Indian NGOs representing Indian farmers have made their voices heard on the critical aspect of their current situation. There was, however, a draft text on agriculture dated February 16 which proposed two solutions regarding the PSH issue at point 28: the adoption of a “permanent solution” or the continuation and the intensification of negotiations on that matter while extending PSH “to all developing country Members”. Substantive outcomes on other issues related to agriculture have generally been postponed to MC14. In a Statement on the reform of the multilateral rules on agricultural trade dated February 27, 14 Members were already insisting on the work yet to be done up to MC14 on agricultural issues. Despite these meagre results, the DG noted that while MC12 had failed to obtain a text, and although there are many challenges including disagreements and postponements, there was one at MC13 that is paving the way for further work to be done.
Ongoing discussions around the Investment Facilitation for Development Agreement – 123 WTO Members have agreed on a IFD Agreement. A joint Ministerial Declaration was circulated on February 25 and revised on February 29 in which some Members “welcome and encourage all WTO Members to support and consider joining the IFD Agreement and, in this context, we will further intensify our outreach efforts with the entire WTO Membership”. The Members thus arrived in Abu Dhabi with a firm text, essentially driven by developing countries. All that was needed was to formally adopt the agreement, and India opposed the consensus, even though it regularly intends to act as the voice of the global South. It is regrettable to arrive with a turnkey agreement and leave with nothing. This is even more unfortunate given that the agreement is a plurilateral one, and therefore membership is optional.
About the central question of development – Development has been a major issue of MC13. In the Ministerial Declaration, it has been stated that Members “reiterate the centrality of the development dimension in the work of the WTO” and “recognise that the full integration of developing Members, including least-developed countries (LDCs)”. In the Ministerial Declaration, it has been stated that Members “recognise the particular vulnerability and special needs of LDCs” and thus “underscore that their interests should be given due priority for them to secure meaningful integration into the multilateral trading system”. In a Declaration on the precise, effective, and operational implementation of the special and differential treatment provisions of the SPS Agreement, Members highlighted the need to improve or make more precise some aspects of the current S&DT regime by instructing “officials to continue to work” on related issues. Members thus focus on this issue both in their statements and in the work objectives set for MC14. In the Ministerial Declaration, they also stressed the importance of “women’s economic empowerment and women’s participation in trade” as well as “the important role that Micro, Small and Medium-sized Enterprises (MSMEs) play in economic growth, sustainable development, and poverty reduction in all WTO Members”. Despite this, there is still a lot of development work to be done. In a G90 Ministerial Declaration, the G90 Members expressed the view that while work had been done regarding S&DT and developing countries, it is still “regrettable that [G90’s] longstanding requests have not received the same attention as other negotiating areas and that the discussions towards proposed outcomes on these critical issues are not directly aligned with our requests over the last twenty years”.
Interests developed through side events: women, sustainability and technologies
Besides the negotiations, some side events took place and highlighted some of the core issues dealing with trade that are currently at stake.
The emphasis on environment – Many of the events that took place dealt with the issue of environment and trade. There was the Trade and Sustainability Hub organized by the International Institute for Sustainable Development (IISD) which welcomed the Coalition of Trade Ministers on Climate; the Dialogue on Plastics Pollution and Environmentally Sustainable Plastics Trade (DPP), the Trade and Environmental Sustainability Structured Discussion, the Fossil Fuel Subsidy Reform (FFSR) or the Trade and Environmental Sustainability Structured Discussion (TESSD) which also presented their environmental initiatives. As Jean-Marie Paugam outlined in a WTO blog post, “thirty years after the WTO's creation, new global environmental challenges of an unprecedented magnitude have intensified, with climate change, biodiversity losses and pollution topping the list” but the “WTO can be used further as a platform to foster trade cooperation for the environment, in a flexible manner, taking into account different members’ appetite, development needs, levels of ambition, and expectations for a just green transition”.
The growing consideration of women and trade – The question of the role of women’s better integration into trade relations was also highlighted through the various sides events that took place last week. Besides the mentions in the Ministerial Declaration about the importance of integrating women into trade, a WTO-ITS High-Level Event on Women and Trade was held and led to the launch of the Women Exporters in the Digital economy fund (WEIDE) on February 25. The IISD Trade and Sustainability Hub also addressed the issue of social sustainability, with some discussions focusing on the role of women into trade.
On the road to digitalization and technologies – Many discussions also emphasized the role of digitalization and the benefits that the digitalization of commerce could bring to the better integration of women and MSMEs within it. The TradeTech Forum, held by the World Economic Forum, also dealt with the question of digitalization and technologies. It made a parallel between the current evolution of world trade and the emergence of new technologies facilitating trade such as artificial intelligence or new ways to use technologies to facilitate trade.
What to expect now? Looking forward to MC14
Although the MC13 led to modest results, the conference testified to the continuing interest of Members in the smooth functioning of the organization, as they renewed their commitment to exchange views on issues that did not find solutions at MC13 and set out in the ministerial declaration to “a forward-looking, reform agenda for the organization”, the WTO noted. As the DG said: “We have worked hard this week. We have achieved some important things and we have not managed to complete others. Nevertheless, we moved those pieces of work in an important way. At the same time, we have delivered some milestone achievements for the WTO and laid the groundwork for more”.
A few consequent observations can be made. First, there seems to be an emerging divide between the fervent defenders of consensus and certain commentators insisting on the shortcomings of this decision-making method in a forum with 166 members. However, the multilateral functioning of the organization seems to be moving towards plurilateralism by default to achieve results. Most of these results were not achieved at MC13. In our assessment, the principle of consensus, a cornerstone of the WTO system, has become a hindrance to the organization’s progress on new initiatives. As noted by one of the authors of this post, Prof. Richard Ouellet, in the aforementioned AFP article, “if we can speak of a crisis, it’s because the consensus, which has been the cement of this organization, has turned into the mud in which it is bogged down”. The remedy may lie in a radical reform of the consensus principle in decision-making. Yet, is such a reform feasible? It poses a significant challenge for the WTO in today’s turbulent world of conflicting interests. Be that as it may, optimism is still the order of the day, since MC13 seemed, based on the documents circulated, to be a sort of primer for MC14 on certain issues. The future of the organization thus depends on the way things work out until and at MC14. Interestingly, however, it now seems doubtful that MC14 will take place in Yaoundé. The final Ministerial Declaration and the closing speech of the Chair of MC13 H.E. Dr. Thani bin Ahmed Al Zeyoudi were not too clear on this. One can imagine that the absence in Abu Dhabi of Cameroun’s Trade Minister, who was supposed to be the Vice Chair of MC13, raised some questions.
Until then, Members still “resolve to preserve and strengthen the ability of the multilateral trading system, with the WTO at its core, to provide meaningful impetus to respond to current trade challenges, take advantage of available opportunities, and ensure the WTO’s proper functioning”. As the DG noted in her closing speech, referring to Winston Churchill, “success is not final, failure is not fatal: it is the courage to continue that counts”.
