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After the 12th WTO Ministerial Conference, what next?

Written by Dirk Willem te Velde

The multilaterally negotiated outcomes of the 12th WTO Ministerial Conference (MC12), or “Geneva Package”, also discussed further here, should be used to create momentum towards the next Ministerial Conference (MC13) and beyond.

What have we learned from MC12?

World Trade Organization (WTO) members can still conclude trade deals.

The deal on fisheries subsidies was an obvious deal that had been in the waiting for many years, but members managed this deal only now, which is good news even if it can go further. It is also significant in the sense that it cuts across economic, social and environment spheres, and as is often the case, involves different interests amongst WTO members. The same conclusion applies to the moratorium on customs duties on electronic transmissions until the next MC. While this is perhaps not the ambitious liberalisation that the WTO system may have envisaged back in 1995, the WTO has avoided paralysis and regression, and continues to provide signals for trade policy around the world, including for regional or Free Trade Agreement (FTA) discussions. Of course, much still needs to be done, especially around taking more trade commitments in agriculture and services.

The WTO is a useful forum to hold discussions on issues that matter in people’s daily lives.

WTO members have engaged in active debates and can agree statements on topical issues that matter to everyone’s daily lives in an explicit way. There are different ways in which countries respond, with different economic interests, but the Declaration on the Emergency Response to Food Insecurity and Response to the COVID-19 Pandemic and Preparedness for Future Pandemics, including around the TRIPS waiver, suggests the WTO can engage in relevant discussions, including those that matter for the poorest countries. The debates shape more effective policy responses, including the need to address more pressing capacity issues as my colleague Maximiliano Mendez-Parra explains.

The WTO can engage in cross-cutting issues (trade and … ) that matter for long-term economic performance.

MC12 started exploring links between rules governing trade and the environment. There was attention to trade and the environment in the agreement on fisheries. And several WTO members (including EU, Kenya, Ecuador and New Zealand as co-leads) agreed to form a Coalition of Trade Ministers for Climate.

Issues for the immediate and long-term future

Some may have questioned whether the WTO still has an effective role in trade liberalisation or in setting and policing trade rules, but the above suggest that the WTO is still relevant, perhaps in more limited ways than expected, and should now focus more on fostering global trade policy debates until the environment is more appropriate for more ambitious trade rules. In this context, the WTO secretariat (including through its research and statistical services) should perhaps play a more active role now in fostering topical as well as structural debates amongst members around the following short term and long-term issues.

The role of trade in shocks

The world has faced many shocks in the recent years, and identifying appropriate roles for trade to help address the worst outcomes from shocks, and avoiding protectionism, remains crucial.

A new framework to support trade and development in the poorest and most vulnerable economies

Development is integral to trade provisions, but we also need a debate on what the future Aid for Trade framework for LDCs might look like. The Enhanced Integration Framework (EIF) and other support programmes such as TradeMark East Africa (TMEA), and others that support the African Continental Free Trade Area), are designed to help the poorest countries to make the most of trade rules. The upcoming Global Aid for Trade Review is perhaps a good opportunity to examine what is next for Aid for Trade (AfT). The WTO will also examine small economy proposals.

The role of trade rules in stimulating innovation

The debate on vaccines has re-opened the debate on how trade (e.g. through enhancing competition) and trade rules (e.g. around patents) can support innovation, trade and development. This debate on a long-standing issue requires further analysis.

Trade and climate policy

Much remains to be done and MC12 only touched the surface of these issues. ODI brought together negotiators from LDCs to align climate and trade policy. This is a complex debate which requires continuous engagement and support.

Dispute Settlement Mechanism (DSM) and WTO reform

What set the WTO apart from other multilateral discussion fora was an effective system to police the rules. But the failure to appoint judges rendered the DSM ineffective. This will not be easy to achieve, but it is worth it, as it makes the WTO a special forum. There will also need to be more attention to WTO reform.

Conclusions

MC12 may not have achieved multilateral trade liberalisation as traditionally envisaged, but it has kept the show on the road in the context of very challenging global developments. It can be leading the way into future discussions on trade rules that are relevant for our lives now and in the future. The effectiveness of MC12 depends on what we make of it in coming years and how we all work towards more, and not less, ambition.