“You could put the world's greatest matchmaker, arbitrator, and negotiator in charge of the WTO right now, but I don't think much would happen,” said former U.S. trade official from 2005 to 2013. Rufus Yersa, who served as Deputy Director-General of the WTO until then, said:
The failure of WTO members to deliver a meaningful outcome at the 13th Ministerial Conference further undermines the Geneva-based organization's ability to develop new global trade rules, allowing competing economies to It is possible to prevent the world from causing a rise in prices.
Christine McDaniel, a former Treasury secretary, said: “There are a number of things that could be detrimental to ministers in charge of global trade and economic growth.The problem is that enough WTO members are doing damage control and protecting “The question is whether we can rein in our political and populist tendencies.” , a former White House, Commerce Department, and USTR economist, currently works at the Mercatus Center, a free market think tank.
The United States, one of the main architects of the WTO system in the last century, is increasingly questioning the underlying structure of the WTO organization. Two decades after admitting China to the WTO, U.S. leaders of both parties have criticized the organization for doing little to align China's economic system with fair and open global trade. ing.
“The United States has been proud to have championed the international rules-based order and the multilateral trading system for decades,” U.S. Trade Representative Katherine Tai told the Center for Strategic and International Studies last fall. He said this in his lecture. “However, the functionality and fairness of this order are now in question.”
In his annual report on China's WTO compliance released on Friday, Tai said that despite being a WTO member for 22 years, “China still maintains a state-led, non-market approach to economics and trade. “We are hiring,” he said.
Former President Donald Trump, who repeatedly violated WTO norms during his time in office, is now threatening to impose 10% tariffs on all other countries if he retakes the White House, which violates WTO rules. , a measure likely to provoke retaliation. He also promised to cancel “permanent normal trade relations” with China and prepare for additional tariffs imposed on more than $300 billion worth of Chinese goods in 2018 and 2019.
President Trump's aggressive trade negotiations have made it difficult to reach a deal that could make the Biden administration appear weaker to blue-collar voters who feel that previous U.S. trade deals have been torched. This was evident at this week's Cabinet meeting.
“Why would people make deals with us now on important WTO issues when we don't even know if the next administration will accept the deal?” Yerza said.
Despite the controversial background, WTO Director-General Ngozi Okonjo-Iweala is furious at suggestions that the WTO is dead in the water. “I'm not the kind of person who works in a paralyzed or dying organization. There's so much to do that it's a waste to waste time on that,” she said in the run-up to the conference. “If I'm dying and paralyzed, I'm out. Simple.”
The following is a summary of the issues that will be at issue at the next Cabinet meeting.
Fishing subsidies: At its last ministerial meeting in June 2022, the WTO reached a partial agreement to curb subsidies that threaten the future of marine fish supplies.
This time they are aiming for a more comprehensive agreement that is expected to have a greater impact on preserving one of the world's most important food stocks.
Of all the issues at stake in Abu Dhabi, officials are most hopeful that the negotiations will get over the line. “It would be a tragedy if there was no agreement on fish at MC13,” said one Geneva-based diplomat.
For Okonjo-Iweala, the negotiations prove that the WTO remains important. “260 million people make a living from fishing, and our oceans are overfished. [The question for ministers in Abu Dhabi is] Can we protect our oceans, be part of a renewable blue economy and protect jobs? '' she said in an interview with POLITICO.
Digital trading: One of the biggest outcomes of the upcoming ministerial meeting may be to maintain the ban on levying customs duties on digital goods and other “electronic transmissions.”
The ban has been in place since 1998, but some member states, including India, South Africa and Indonesia, believe they are missing out on valuable customs revenue to streaming services, which have largely been replaced by DVDs and CDs. ing.
Proponents of the ban argue that the loss of revenue pales in comparison to the cost of letting the moratorium expire, which would impose tariffs on all types of data and transactions that cross borders on the internet. I am concerned that this may be imposed.
Business groups also argue that failure to renew the moratorium would be a major setback as it would be the first time the WTO has made a decision that would make trade difficult.
“The majority of our members want an extension, but there are a few members who think it is a problem because they think it will affect their income,” Okonjo-Iweala said. “Let's see what the negotiations reveal. We succeeded in extending the moratorium on e-commerce at the WTO's 12th Ministerial Conference in June 2022.”
Dispute resolution: The most significant US move at the WTO in recent years was passive in 2019. At the time, the Trump administration effectively killed off the WTO's powerful Appellate Body, which decides trade disputes between member countries, by blocking the appointment of new judges.
Trump officials accused the committee of being too restrictive in how the United States imposes tariffs on goods it deems unfairly priced or subsidized. Trump's chief trade negotiator, Robert Lighthizer, called this a “huge and tragic failure” in his recent book.
But most other members appear to want the higher committee reinstated so they can appeal decisions of lower committees that they believe are wrong.
While some progress may be made in Abu Dhabi, Biden administration officials have made it clear that they believe the real deadline for reaching an agreement to restore some judicial functions is the end of 2024, after the U.S. presidential election. ing.
Food security: As has become the norm at recent WTO ministerial meetings, India wants its anti-hunger programs to be permanently protected from challenges that they violate caps on trade-distorting agricultural subsidies.
India won a temporary peace deal in 2013, but major agricultural exporters, including the United States, have grown frustrated with the way India operates its food security program, especially for highly traded goods such as rice and wheat. .
India has threatened to block progress on all other issues at the next cabinet meeting unless an agreement is reached on public shareholding. This puts enormous pressure on India to meet India's demands or risk ministerial failure.
Exemption from COVID-19 treatment patents: WTO members may also face decisions on whether to waive intellectual property protection for COVID-19 treatments and diagnostics. That would pave the way for manufacturers in developing countries to produce generic versions of paxthrovid and other treatments, as well as test kits and other products.
But for some, COVID-19 feels like a thing of the past, and hopes for a deal are very low.
South Africa, India and other developing countries have sought this decision after securing exemptions for coronavirus vaccines in the MC13. The Biden administration has avoided taking a public position on the issue, which is fiercely opposed by the U.S. pharmaceutical industry and the broader business community, but supported by left-wing groups.
The WTO committee responsible for discussing intellectual property rights recently informed the WTO General Council that it was unable to reach agreement on the issue despite more than 18 months of discussion. This could put an end to efforts to extend the exemption, but pharmaceutical industry players believe the exemption will be approved by ministers at MC13 as part of a final horse-trading attempt to reach some kind of agreement. There are concerns that it may still be approved.
WTO accession: One bright spot on the conference's agenda is the entry of two new members into the WTO, Comoros and Timor-Leste. This is the first new member state since Liberia and Afghanistan joined in July 2016.
Since the two countries have a combined population of less than 2.5 million, membership would not mean much for global trade. Timor-Leste is the larger of the two countries, with an estimated population of approximately 1.3 million in 2021, while Comoros has a population of less than 900,000.
Twenty-two more countries are currently negotiating with the WTO, but Okonjo-Iweala refutes talk that the group is becoming irrelevant, citing other statistics. The number of applicants “speaks for itself in terms of how the organization and its people and country are viewed,” she says.