When the World Trade Organisation’s 13th biennial Ministerial Conference recently concluded, the reaction from business and other key trade stakeholders was one of relief.
The worst possible outcomes, that many feared, were avoided. But this relief was also tinged with anger and frustration that opportunities for lasting reforms on governance, e-commerce, fisheries subsidies had been lost – at least for now.
Perhaps the most welcome development from the meeting in Abu Dhabi, was the formal entry into force, between 53 of the WTO states (including the EU and UK), of the Joint Services Initiative on Domestic Regulation. This is a plurilateral measure with the potential to reduce red tape involved with services exports and save as much as 7% in terms of costs for exporting businesses globally. The measure will now form part of the rule book at the WTO for the countries involved, with another 18 states to complete ratification in due course.
The retention for another two years of the moratorium on customs duties for electronic transmission of goods and services was agreed late on, but hugely welcome. Research by the Organisation for Economic Co-operation and Development (OECD) shows that developing countries would have lost out the most in services trade had the moratorium been lifted.
But the good news came with a catch – there will be no more extensions beyond this current agreement. That means a deadline has now been set for a permanent solution which must be found by the conclusion of MC14 in Canada in 2026. And although further progress was made in discussions around digital trade and e-commerce facilitations, a multilateral agreement between WTO members looks some distance off.
Pharmaceutical and research industries were concerned that MC13 would result in stronger pressure to extend the agreement on Trade-Related Aspects of Intellectual Property Rights (known as TRIPS waivers) into other sectors. This would have further eroded protections around intellectual property, but did not come to pass.
On WTO governance, options were raised but did not achieve the necessary consensus. And while the US continues to hold to its decision to not appoint a member to the Appellate Panel, it remains mothballed. Discussions have continued among other states, including the EU, for a parallel mechanism to be established. This would deal with appeals and dispute resolution on a plurilateral basis for like-minded states, but there has yet to be any substantive outcome.
The final communique outlined an ambition for states to reach an agreed package of governance reforms by the end of 2024, but wth US elections just around the corner this is an unrealistic expectation.
Progress was also slow on issues such as reform of fisheries subsidies, essential for meeting sustainability challenges.
Nevertheless, the convening power of the WTO in bringing together the world’s trade ministers, and key officials, ensured key issues were kept in focus. This includes – how to ensure that micro, small and medium sized businesses can benefit strongly from the growth in digital trade, boosting female economic empowerment, and the asks from developing countries.
As storm clouds caused by geopolitical tensions and protectionism gather around global trade, it remains robust, particularly in services. For WTO members, including the two new members Comoros and Timor-Leste, there is still much to chew over in the two-year run up to MC14.