The 13th Ministerial Conference (MC13) of the World Trade Organisation (WTO) is taking place in Abu Dhabi, United Arab Emirates on 26 to 29 February 2024. With a good deal of actions and programmes still unaddressed, the meeting is faced with an uphill task to render the global trading system a smooth going in the near future.
Is there anything for the developing and least developed countries in the MC13? Speaking at the 6th South-South Dialogue on Least-Developed Countries (LDCs) and Development on September 28 in Lausanne, Switzerland, WTO Director-General Ngozi Okonjo-Iweala said that the upcoming 13th Ministerial Conference provides an opportunity for achieving trade outcomes in support of LDCs' development objectives. She encouraged members to continue to maintain a focus on LDC needs, including those in the process of graduating from LDC status.
DG Okonjo-Iweala stressed that LDCs' trade priorities form an integral part of broader trade and development discussions, including in the context of WTO reform. "We need to keep examining development-related matters across the spectrum of the WTO - from regular Committee work to trade negotiations to dispute settlement," she said. She also acknowledged ongoing efforts by development partners and others to ensure more effective trade support for LDCs.
Given the deliberations and decisions in the past ministerials, one has reasons to believe that the DG's statements are rather too academic to have any bearing on the outcome of the meeting. Analyst Ken Heydon has stated that the key issues facing the WTO now include addressing poor purchasing power of the poorest communities, gaining additional acceptance of the WTO Agreement on Fisheries subsidies and helping countries that lose support as they graduate from LDC status. Other issues include addressing the US conviction that the WTO Appellate Body is openly hostile to trade defence instruments, resolving the paradox of patents and meeting the twin goals of data security and data access in the promotion of digital trade.
The global trading system is already in a downward loop with several developed countries erecting new barriers through the provision of hundreds of billions of dollars in subsidies under "me-first" unilateral trade policies. That such policies would further fracture the multilateral trading system is well known, said several trade analysts/commentators in various media reports. To apparently appease the industrialised countries, attempts are allegedly underway to deliver results of their choices at MC13 while seemingly turning a deaf ear to the issues raised by the developing countries, said an analyst.
Global trade, in the days ahead, does not promise anything rosy. Growth in the volume of world merchandise trade fell from 2.7 per cent in 2022 to 1.7 per cent in 2023. The stakes are high. Failure to strengthen the trading system and the liberal order that underpins it will put three decades of growth and development made possible by globalisation at risk, and the ability to successfully deal with the next pandemic and the climate transition.
It is understandable that in view of the geopolitical changes taking place in recent times, the forthcoming WTO Ministerial is facing crucial challenges. Clearly, the liberal trading order is under siege as world trade becomes increasingly weaponised through targeted government interference. The evidence is clear - the stockpile of G20 trade restrictions has grown more than ten-fold since 2009. Additionally, the sanctions from the USA in the aftermath of the Russia-Ukraine war are also having a toll on poorer countries in their procurement of, among other things, petroleum and grains.
What the MC13 needs to focus should essentially be in freeing trade from being a war tool. The reason why trade, of all the things, has assumed such a shape may not be too far to discern. As Ken Heydon has mentioned, trade can be curtailed by sanction- as is evident in the case of Russia's aggression against Ukraine which has caused major collateral damage to international supplies. Second, to arm the global value chain for increasing self-reliance, particularly in semiconductor production. Third, to execute trade remedies in self-defence, as with the Trump and Biden administrations' penalty tariffs on imports of steel and aluminum. Fourth, to 'serve' science in the interests of the environment and public health, whether through restrictions on trade in key solar energy components or the US$122 billion export restrictions on COVID-19 treatment products.
While MC13 should be targeted to build on the promise of MC12, addressing the emerging challenges to trade weaponisation should form part of the core agenda of the meeting. If it fails to shed light on this, in an earnest and meaningful way, the global trade body stands to lose its credibility.
The MC13 must also deal with dispute settlement reform. Without full restoration of the WTO dispute mechanism, it will be extremely difficult to restrain the use of the trade weapon. It is believed that with just a modicum of flexibility, particularly from the United States and China, dispute settlement reform can be a feasible outcome at MC13. It is heartening to hear that the WTO DG has said the credibility of the WTO will depend much on whether it can deliver on the dispute settlement (DS) reform at MC13. However, she did not mention which way the DS reform should proceed.
Let's hope things do not turn too inauspicious for MC13 to deliver positively on the crucial issues.
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