Trade reforms swept under the carpet as WTO meeting achieves little

Not much was expected of the thousands of trade officials gathered in the UAE for the ministerial conference, and they delivered just that
At a time when pressure for reform and the need for global cooperation are mounting, the WTO is still struggling to get out of its own way

David Dodwell

Published: 8:30pm, 10 Mar 2024

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Have you noticed the deafening silence on trade following last week’s long-awaited World Trade Organization ministerial conference (MC13) in Abu Dhabi? No, I thought not.

It seems the nearly 4,000 trade officials gathered together by UAE Trade Minister Thani bin Ahmed Al Zeyoudi failed to find agreement on anything of substance. Instead, they lifted the carpet and discretely brushed all hoped-for reforms under it. Nothing resembling global trade liberalisation in any form can be expected any time soon.

Given the fractious state of multilateral cooperation, with wars raging in Ukraine, Gaza and Sudan, tensions continuing to simmer between the United States and China, and an unprecedented concentration of national elections this year, expectations of exciting progress from MC13 were never high.

But the frustrating, mind-numbing banality of proceedings in Abu Dhabi seemed to surprise even the most enthusiastic trade policy wonks. One must question the millions of dollars spent on flying so many senior people so far to achieve so little.

Conceding that no material liberalisations were achieved, the World Trade Organization (WTO) did its best to put on a brave face, noting that trade ministers had “agreed to continue negotiations in all areas where convergence was elusive at MC13”.

Some might suggest it was an achievement in its own right to emerge from the meeting without significant backsliding. Others might celebrate that attendees even managed to agree on a meagre outcome document that succeeded in securing members’ explicit commitment to multilateralism.

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Keith Rockwell, the former head of communications for the WTO, summed it up like this: “Looming elections in India, the United States and Mexico, plus a new administration in Indonesia, severely restricted room for manoeuvre and crushed any inclination to compromise.”

Ahead of the gathering, there were modest hopes of an agreement to curb fisheries subsidies, an end to long-standing disagreements on subsidies for public stocks of rice, formalisation of a 25-year moratorium on tariffs for digital trade, and even commitments to rebuild the WTO’s critically important trade dispute settlement process. These had been euthanised by Robert Lighthizer, former US president Donald Trump’s trade representative.

Instead, despite a one-day extension of negotiations, trade ministers left empty-handed. Efforts by India, South Africa and Indonesia to end the e-commerce moratorium were only averted at the last minute when India’s Trade Minister Piyush Goyal agreed as a personal favour to his UAE host to allow the moratorium to stay in place for another two years.

While some might blame the US for undermining multilateral cooperation in the past eight years, it was India that played the petulant bad-guy role in Abu Dhabi. Once it became clear India could not win support to formalise the right to subsidise public rice holdings – seen inside India as an essential olive branch to the country’s farmers ahead of national elections – Goyal set about using the country’s veto powers to block progress on other issues.

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In particular, he blocked progress on efforts to end fisheries subsidies aimed at overfishing and overbuilding fishing vessels, even though Indian fishing communities are among the millions worldwide whose livelihoods are at stake because of overfishing and depletion of deep-sea fish stocks.

The WTO had deemed the four weeks ahead of MC13 as “Fish Month” in the hope of galvanising momentum. In the end, though, only 71 WTO members out of the 110 needed for ratification signed up to the agreement.

Perhaps least surprising was the collapse of progress on restoring the WTO’s dispute settlement process. In formal terms, the WTO is committed to begin the rebuilding process by the end of this year, but with the US presidential election in November, no one in Abu Dhabi saw any realistic possibility of meeting that deadline.

One unexpected setback was the unexplained sacking just ahead of the MC13 of Guatemala’s experienced and respected WTO ambassador Marco Molina by the country’s new president Bernardo Arévalo. Molina was a driving force for the dispute settlement agreement, and his dismissal is expected to slow progress.

Indian Commerce Minister Piyush Goyal speaks during the final hours of negotiations at the World Trade Organization gathering of ministers in Abu Dhabi on March 1. Photo: Reuters

Also simmering unresolved in Abu Dhabi was the rising conviction that the WTO needs to demolish its consensus rule that allows any single member to veto any proposal. There are now calls for the WTO to allow “plurilateral” agreements of the willing, but India in particular appears unwilling to relinquish its veto power.

At the conclusion of the meeting, trade policy expert Alan Wolff called for an end to “the tyranny of the non-participant veto”. Trade experts at the Washington-based Centre for Strategic and International Studies agreed, noting “the dysfunction inherent in recent WTO proceedings”, adding that, “The capacity of a single member to poison the system is becoming an untenable feature of the WTO.”

While no one is calling for the abolition of the WTO, the pressure for reform is clearly mounting. The problem is that dissolution of the WTO would do nothing to dispel the trade-related problems it exists to address – still less the growing pressure for more trade restrictions, higher tariffs, wider use of subsidies, using “national security” as grounds for protection, and how to deal with state-owned enterprises in international trade.

Multilateral cooperation remains indispensable, not just to manage international trade but to tackle climate change, future pandemics and the many other global challenges we face. Let’s hope there will be more to show from MC14 in Cameroon.

David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades