WTO still dithers while climate change, pandemic and trade war threaten the globe

Despite the pressing challenges facing the world, the WTO has produced precious little change
Before the postponement of the latest meeting, negotiators were making tentative noises about a possible agreement on fisheries subsidies and an e-commerce deal – the same areas as four years ago

David Dodwell

Published: 2:30am, 29 Nov 2021

Why you can trust SCMP

Over the past weekend, as the long-awaited World Trade Organization 12th ministerial meeting was set to open in Geneva, I imagined the following headline: “Ministerial ends with decisions on fish subsidies, e-commerce duties; ongoing work continues”.

I imagined countries’ confirming their commitment to cooperate on trade problems. I imagined an easing of the US-China tariff war and a boost in trade to help the global economy recover from the deepest recession in almost a century.

But there is a minor time-warp problem. This was the WTO news report’s headline for the ministerial meeting, but it was on December 13, 2017 – at the end of the 11th WTO ministerial in Buenos Aires, Argentina.

Soon afterwards, a study led by a team from King’s College London provided its summary: the meeting was “immediately celebrated and derided in equal measure”, it said.

From their point of view, “the meeting’s outcome was indeed significant. It consolidated the process of reconfiguring the WTO’s negotiating function; and enabled members to tackle more effectively a range of pressing economic and social issues as well as to navigate blockers and blockages in the negotiations”.

11:11

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Perhaps only in the corridors of the WTO headquarters on the shores of Lake Geneva could “reconfiguring a negotiating function” and “navigating blockers” be regarded as significant outcomes.

Our problem is that while the world has moved forward four years, the clock in Geneva seems to have stood still. All we have seen and heard since Buenos Aires – apart from increasingly rancorous trade conflicts and a rising preference for bilateral efforts to tackle disputes – is the clatter of cans being kicked down the road.

That noise was heard yet again last Friday as the WTO called an emergency meeting of its General Council to announce a postponement of the ministerial meeting. This followed a new outbreak of “a particularly transmissible strain of the Covid-19 virus”. Travel restrictions in Switzerland made it impossible for many trade ministers to join the meeting.

Since that celebratory WTO headline from Buenos Aires, we have seen a traumatic pandemic and a mounting crisis over the pace and harm of climate change. We have seen a deeply damaging trade conflict between the world’s two leading economies. And we have seen the premature resignation of Roberto Azevedo as director general of the WTO.

02:03

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Original plans for the latest ministerial meeting to be held in Nur-Sultan in Kazakhstan last June were torn up. A new WTO head, Ngozi Okonjo-Iweala of Nigeria, was appointed in February. She then set a new date for the meeting, moving it to Geneva because of pandemic travel restrictions.

Now the pandemic has struck again. “We see no alternative but to propose to postpone the ministerial conference,” said Okonjo-Iweala. She also said many delegations felt meeting virtually did not offer the kind of interaction necessary for holding complex negotiations on politically sensitive issues but that negotiations would continue and “delegations in Geneva should be fully empowered to close as many gaps as possible”.

Since her appointment, Okonjo-Iweala has been seeking new momentum on global trade liberalisation. The WTO is, on one hand, widely regarded as indispensable to the management of international trade issues but, on the other, its reputation hangs by a thread after more than a quarter of a century of painfully unproductive procrastination.

After the crash of the ambitious Doha Round of global trade negotiations, all it has delivered is a modest measure on facilitating trade at national borders. Since all that spinning of wheels in Buenos Aires, trade ambassadors in Geneva have worked single-mindedly to generate new momentum and recover a little credibility.

After 20 years, can the WTO finally end deeply damaging fishing subsidies?

Apart from rules to rein in harmful fish subsidies, which amount to an estimated US$20 billion a year and to regulate the rapid growth of international e-commerce – from virtually nothing in 2000 to an estimated US$4.3 trillion in 2020 – there is an urgent need to tackle the barriers to trade in medical equipment and the equitable distribution on vaccines in the battle against Covid-19. The WTO’s latest World Trade Report calls Covid-19 “a massive stress test of the world trading system”.

Climate-critical trade issues, such as establishing global rules for putting a realistic price on carbon dioxide emissions and eliminating fossil fuel subsidies, which the International Monetary Fund estimates to cost US$5.9 trillion a year, have also been added to the WTO’s urgent “to-do” list.

Other imperatives include restoring the WTO’s trade dispute settlement process, which was paralysed two years ago by former US president Donald Trump’s trade team; setting rules for competition with state-owned enterprises; and, agreeing what export restrictions can be allowed in keeping economies resilient in the face of pandemics and other natural disasters.

Work also needs to be done on the resilience of global and complex supply chains, recognised as making many economies both more vulnerable and more resilient.

While the climate crisis and the Covid-19 pandemic have sharpened focus and added urgency, the reality is that all these “to-do” list items have been clear for several years and have still not been resolved.

Before the postponement of the latest ministerial meeting, WTO negotiators were last week making tentative noises about a possible agreement on fisheries subsidies and an e-commerce deal. There was neither irony nor embarrassment over the fact that these were exactly the two areas attracting tentatively positive noises in Buenos Aires.

Yet again, we must watch the can being kicked down the road, and I feel reluctant to blame it entirely on the new strain of Covid-19. We seem to be doomed to live with interminable procrastination.

David Dodwell researches and writes about global, regional and Hong Kong challenges from a Hong Kong point of view

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