“A Rather Sober Experience”: Insights from the WTO's 13th Ministerial Conference

Issues like geopolitical gridlock and complex trade agendas hamper the World Trade Organization in fulfilling its mandate. What happened at the recent conference? And what role does the EU have to play in global trade governance? Leading expert Manfred Elsig, a professor at the University of Bern, answers some key questions.

What are the major outcomes from the WTO's 13th Ministerial Conference (MC13)?

The MC13 was a rather sober experience. Already going into the 13th Ministerial Conference, many anticipated that key issues would fail to move forward. Technical negotiations were seriously stuck in many areas: these included negotiations on reforming the WTO as an institution, reviving dispute settlements, continuing to work on topics like fishery subsidies, agriculture and investment facilitation, and prolonging the moratorium to avoid tariffs on e-commerce. In addition, India was very reluctant to work towards compromises and even went as far as to suggest that the WTO should no longer address environment and labour concerns. Their reluctance was coupled by that of the United States, which showed little interest in this year’s conference.

In the end, the MC13 members came to a mutual agreement to continue technical work on issues in Geneva while postponing all important decisions to the next ministerial meeting. The main highlight of this year’s conference was the accession of Timor-Este and Comoros to the WTO.

The WTO has recently faced increasing gridlock due to geopolitical struggles between its members. What does this mean for global trade and the legitimacy of the WTO writ large?

Without question, the geopolitical conflict between the US and China has somewhat paralyzed the organization. These tensions have also played into the US’ decision to block the appointment of WTO judges (known as Members of the Appellate Body) on the grounds that it felt some disputes involving China had been wrongly adjudicated. The US founded the GATT system and has traditionally acted as the main proponent – alongside the EU – for a functioning WTO. This stance is now seen as passé. For this reason, both the WTO’s authority and legitimacy is weakened due to a clear lack of leadership.

Still, the geopolitical struggle should not overshadow the fact that the WTO’s rule-making arm has under-performed for more than 20 years. Many factors keep the WTO from working effectively: Increasing demands, growth in membership, a weakening Secretariat, an ever-more complex trade agenda that touches on behind-the-border measures and climate change, and the continued reliance on consensus have all contributed to the grim prospects for new rules. Only a handful of small successes are visible (for example, on trade facilitation and fishery subsidies). When it comes to how to move forward, there is an increasingly shared view that only plurilateral agreements from a "coalition of the willing" can create much-needed new and updated rules for trade governance.

What role does the EU have to play – both inside and outside of the WTO – in reforming global trade governance?

Reforming the WTO in terms of institutional processes is currently very difficult. Nevertheless, the EU should be pro-active on this front. One place to start would be within the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a new “institution” of which the EU has been the principal architect. The MPIA currently offers an alternative to the appeal mechanism (the Appellate Body) that the US has blocked. Currently, the MPIA is a voluntary system in which more than 50 WTO members participate. However, the EU must continue to provide leadership both in extending the MPIA (and supporting its authority) and in reforming the original Appellate Body. One major stumbling block remains the United States, which currently has no intention of joining the MPIA or reviving the Appellate Body. But the fact remains: a functioning dispute settlement system – even one in which the US is not currently participating – is in the EU’s best interest and remains crucial for a functioning global order based on well-defined norms and laws.

By comparison, institutional reforms in the rule-making arm of the WTO are also unlikely. Still, it is important that the EU displays good leadership by using existing platforms to push new trade commitments that are important for the planet. Some of these pressing reforms include further limiting fishing subsidies, easing trade for environmental goods and services, creating clearer and more predictable rules for e-commerce, establishing norms to fight against the abuse of national security exemptions, and taming discriminatory and populist-driven subsidies.

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Manfred Elsig is Professor of International Relations, Deputy Managing Director and Director of Research of the World Trade Institute at the University of Bern.

This first appeared on the ENSURED website.

Photo by Meruyert Gonullu