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World Trade Organisation Faces Moment of Reckoning

World Trade Organisation Faces Moment of Reckoning

Posted on Wednesday, December 23, 2015

Patrick Low, Fellow of Asia Global Institute, says the stakes are high for the WTO as it kicks off its 10th Ministerial Talks in Nairobi.

The World Trade Organisation will hold the 10th ministerial conference of its 20-year existence next week . It is a crucial meeting. The WTO has spent the past decade and a half trying to finish what it started in 2001 - the launch of the Doha Round of Multilateral Trade Negotiations.

The Doha Round was a comprehensive package. A breathtakingly ambitious - or simply unrealistic - deadline of a little over three years was set for the negotiations.

It was heavy on trade liberalization in agriculture, manufactured goods and services. It had multiple provisions on development - enough for the entire package to be referred to by some as the Doha development agenda. The package also included mandates on improving rules in certain areas and on trade facilitation, which aimed to reduce red tape at the border.

Perhaps the most forward-looking parts of the agenda were the mandates on investment, competition policy, government procurement, e-commerce, trade, debt and finance, and trade and technology transfer.

If these mandates had survived and prospered, it could have been said that the WTO was gearing up for the 21st century and not just busying itself with a 20th century agenda. But all the issues were either dropped or came to nothing.

Even with its lighter load, Doha Round results have been truly elusive. Very little has emerged. The most notable result was a 2013 agreement on trade facilitation. The only outcome for most of the rest has been a declaration of intent to keep trying.

The relative demise of the WTO's negotiating function, and an apparent waning of commitment to the institution, have been accompanied by shifting power relationships that have added complexity and awakened geopolitics. In addition, a rising penchant for preferentialism in trade relationships is both a cause and an effect of a floundering WTO. Growing uncertainty at many levels has lessened the allure of a global embrace and fed creeping protectionism.

As member governments prepare to converge on Nairobi, a few modest negotiating results are likely to be announced. They will be a far cry from the splendor of a comprehensive Doha Round deal. If the tactics adopted in past WTO ministerial conferences were feasible, governments would acknowledge their continuing efforts but recognise that they had not produced the desired results.

They would kick the can down the road and reaffirm their intention to continue their efforts to bring the Doha Round of negotiations to a successful end. But that habitual postponement is going to be much harder, if not impossible, in Nairobi. A number of WTO members, the United States and European Union among them, are unwilling to sign off on "business as usual".

They claim that a reaffirmation of the intention to complete the Doha Round is a recipe for indefinite inaction. They say it is time to move on as no way forward is possible under existing negotiating structures. The intention may not be to discard unresolved issues of limited interest to the proponents. It could be to seek out a fresh approach to them.

The other side, which comprises a majority, insists that post-Nairobi negotiations must stick firmly to the Doha Round agenda and mandates, and be based on any progress made so far. This approach seeks to protect whatever strategic negotiating advantages have been acquired under the Doha rubric.

It may also reflect mistrust of those wishing to discard the trappings of Doha. They fear a de facto discontinuation of good faith negotiations on the underlying issues. Some may even hope that insisting on maintaining the Doha agenda to the letter will ensure that nothing happens.

The core task in Nairobi is to finesse these differences and find a way to dig the institution out of its logjam. The meeting also needs to secure agreement that new issues of increasing relevance to the world economy can be taken up without everything else being finished first.

We shall know very soon whether the Nairobi meeting rises to the occasion.

This article first appeared in the South China Morning Post on December 9, 2015 as World Trade Organisation faces moment of reckoning in Nairobi.

The views expressed in this article are the author's own and do not necessarily reflect Asia Global Institute's editorial policy.

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