Rise of plurilateralism

The just concluded ministerial conference of the World Trade Organisation (WTO) has at least one important outcome. It is the push for plurilateral trade negotiations. While multilateral trade negotiation could not produce any deal in Buenos Aires, around half of the member countries have agreed to move ahead with plurilateral approach in near future on at least three new issues.

Trade ministers and policymakers of 164 member countries of the WTO gathered in the Argentine capital city on December 10-13 this year to strike a minimum deal on multilateral trade rules. But there was a clear signal that they have to come back without any substantive outcome.  Finally, that happened as they failed to reach any consensus on any issue.

India, one of the leading developing countries, vehemently opposed the new issues. The country's top demand was making a permanent waiver of restriction on subsiding public procurement and stockholding of foods. But the US opposed any such waiver in the WTO.  India couldn't make a permanent solution on food security which was mandated for this ministerial in four years back in Bali. In retaliation, it blocked the possible deal on fisheries subsidies at MC11.

The ministerial conference, the highest decision making forum of the organisation, thus concluded without any deal. There is no ministerial declaration which, however, is not unique as in 1999 and 2003 there were also no ministerial declarations in the Seattle and Cancun conferences respectively.

Instead of any declaration, the conference ended with a formal statement from the conference chair which outlined the future course of action. But, it is non-binding in nature. Moreover, in the early morning of the scheduled concluding day, almost half of the member countries issued three separate statements on three new issues-- electronic commerce, investment facilitation and micro, small and medium enterprises (MSME).

By issuing the statements, these countries virtually expressed their willingness to initiate plurilateral negotiations on these issues. Plurilateral negotiations generally allow a good number of countries to start negotiation on an issue or topic not covered in the multilateral negotiations of the WTO.  Basically, member countries of the WTO interested in a particular issue may come closer to strike an agreement on setting trade rules. Once they agree, they have to notify it to the WTO for endorsement. The agreement remains open for other countries to join later.

There are a number of arguments in favour plurilateral negotiations.  It is easy to negotiate due to the lower number of stakeholders and so it takes less time. It is also helpful to concentrate on a particular issue without considering the fate of other issues. Some also argue that it is actually the building block of multilateral trade rules. Nevertheless, the structure and modalities of  plurilateral deal are not very simple as there are at least three forms of the agreements- Most Favoured Nation (MFN), conditional non-MFN and Regional Trade Agreements (RTAs). Moreover, it has to be the issue of either rule making or market access or both.  

The 16-year old Doha Round of negotiations initiated in 2001, has become a matter of disappointment for almost all of the member countries of the WTO. So far, very little has been achieved to set any multilateral trade rules due to sharp division among the poor and rich countries. That's why, a good number of countries called for alternative routes for negotiation. Some countries even favoured abandoning the Doha talks and starting a fresh round of negotiation. But a large number of developing countries pressed for continuation of Doha Round. On the other hand, rich countries preferred negotiation on new issues like e-commerce.

Against the backdrop, the 11th ministerial conference (MC11) of the WTO took place. Countries interested to start talks on formulating global rules for e-commerce and investment facilitation found that the all the members of the organisation are not in a position to join such talks. Rather, some of the members strongly opposed the issues. That's why, interested parties joined hands and issued separate statements to start talks on the issues. If they want to move ahead keeping other members of the WTO, they have to do it under plurilateral arrangement.

In fact, two years back at the Nairobi ministerial, 54 WTO members formally announced the conclusion of the Information Technology Agreement (ITA), which is a plurilateral agreement, by striking a deal. Thus endorsing the plurilateral agreement in the ministerial conference is not a new thing.

The formal inception of the WTO in 1995 contained four plurilateral agreements. These are: Agreement on Trade in Civil Aircraft, Agreement on Government Procurement (revised in 2014), International Dairy Agreement (terminated in 1997) and International Bovine Meat Agreement (terminated in 1997). Again, 14 members of the WTO including the United States, European Union, Japan and China agreed to initiate a plurilateral deal on environmental goods in 2014. The Trade in Services Agreement (TISA), being negotiated by 23 members, is another plurilateral agreement now under negotiation.

In Buenos Aires, some 71 member countries jointly expressed their interest to 'initiate exploratory work towards future WTO negotiations on trade-related aspects of electronic commerce' keeping the participation open to all WTO members. Again, 70 member countries disclosed their plan to 'pursue structured discussions with the aim of developing a multilateral framework on investment facilitation.' Finally, 87 WTO members jointly declared their intention to create, multilaterally, an informal working group on MSMEs at the WTO that would also be open to all members.

These announcements have long-term implications for the WTO. Basically, developed countries tried to introduce these new issues in the multilateral negotiations. They, with support from some of the developing countries, also did the ground work long before the ministerial conference to initiate the plurilateral move as an alternative course. If the plurilateral negotiations finally take place on these issues, the WTO will have to accommodate the agreements finally.

Bangladesh, in line with the Least Developed Countries (LDCs) declared its position, and abstained from being a party to any the three plurilateral moves. This is a right decision at this moment as negotiations on the plurilateral platforms are generally unbalanced and loaded against the poor and smaller countries. But the country needs to be prepared for dealing with the challenge of  plurilateral approaches in the near future.   

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