Tomer Avital in the wake of the approval of the 2023-24 budget For the sake of the journalists and presenters…
Written by Diana Thebaud Nicholson // October 12, 2022 // Global economy, Trade & Tariffs // Comments Off on WTO 2012-2022
World Trade Organization (WTO)
WTO News on Wednesday-night.com
UNDERSTANDING THE WTO: BASICS
The GATT years: from Havana to Marrakesh
The WTO’s creation on 1 January 1995 marked the biggest reform of international trade since after the Second World War. It also brought to reality — in an updated form — the failed attempt in 1948 to create an International Trade Organization.
Much of the history of those 47 years was written in Geneva. But it also traces a journey that spanned the continents, from that hesitant start in 1948 in Havana (Cuba), via Annecy (France), Torquay (UK), Tokyo (Japan), Punta del Este (Uruguay), Montreal (Canada), Brussels (Belgium) and finally to Marrakesh (Morocco) in 1994. During that period, the trading system came under GATT, salvaged from the aborted attempt to create the ITO. GATT helped establish a strong and prosperous multilateral trading system that became more and more liberal through rounds of trade negotiations. But by the 1980s the system needed a thorough overhaul. This led to the Uruguay Round, and ultimately to the WTO.
How the World Trade Organization Became a Proxy Battleground
(Policy) The events of September 11, 2001 ushered in a new millennium with an emotional shock shared by humanity in real time. As the impact monopolized policy agendas for years, it overshadowed less spectacular transformations unleashed around the hinge of history of 2000, including the fourth industrial revolution, China’s rise and the disruption of global trade diplomacy. Policy Associate Editor Lisa Van Dusen explores the World Trade Organization’s bumpy ride since the Battle of Seattle.
Trade and Sustainability Discussions at WTO Approaching Next Milestone
Following a ministerial statement in 2021, TESSD participants, under the coordination of Canada and Costa Rica, have stepped up their work plan on trade and sustainability-related issues earlier this year.
(IISD) … TESSD participants, established four informal working groups, which cover trade-related climate measures, environmental goods and services, circular economy – circularity, and subsidies.
A high-level stocktaking event in December will likely lead to three outcomes: a summary document informed by the working groups’ efforts; a statement by the co-convenors; and a list of possible TESSD deliverables for MC13.
On October 4 and 5, the 74 members currently co-sponsoring the Trade and Environmental Sustainability Structured Discussions (TESSD) at the World Trade Organization (WTO) met to further their work and discuss preparations for a high-level stocktaking event in December. This gathering could give a useful signal of what this initiative will aim to achieve for the WTO’s Thirteenth Ministerial Conference (MC13).
Launched on 17 November 2020, the discussions on trade and environmental sustainability provide a forum for co-sponsoring members to consider where they can work together on issues that are at the nexus of trade, environment, and climate change, and eventually craft possible environmental sustainability “actions and deliverables.”
DG Okonjo-Iweala: “The world expects us to keep delivering”
(WTO) Speaking at an informal Heads of Delegation meeting on 7 July, WTO Director-General Ngozi Okonjo-Iweala welcomed the “Geneva package” concluded at the 12th Ministerial Conference (MC12) on 12-17 July but warned WTO members that they should not rest on their laurels. “We showed that we can deliver results for people across the globe,” she said. But “success begets expectations. Because of the unprecedented outcomes at MC12, the world expects us to keep delivering.”
Ngozi Okonjo-Iweala: The WTO Is Back
The agreements adopted at the World Trade Organization’s recent ministerial conference lay a foundation for members to rebuild trust, reach further deals, and advance much-needed institutional reforms to keep the global trade body fit for purpose. The goal must be to continue delivering results for people around the world.
(Project Syndicate) After nearly six days of negotiations at the WTO’s 12th Ministerial Conference – culminating in a marathon 48 hours of non-stop talks – ministers and senior officials from the body’s 164 member states adopted a historic package of agreements. The multilateral deals – of a scale and scope that the WTO has not achieved since the mid-1990s – will help people, businesses, and the planet.
WTO members secure unprecedented package of trade outcomes at MC12
Ministers agreed on a process for addressing longstanding calls for reform of the WTO. The MC12 outcome document commits members to work towards reform of the organization to improve all its functions through an open, transparent and inclusive process. The WTO’s General Council and its subsidiary bodies will conduct the work, review progress and consider decisions on reform to be submitted to the 13th Ministerial Conference. Ministers also committed to conducting discussions on addressing challenges and concerns with respect to the WTO’s dispute settlement system, with a view to having a fully and well-functioning system accessible to all members by 2024.
Outcome of the 2022 WTO ministerial conference: Is the glass half-empty or half-full?
(European Parliament Think Tank) From 12 to 17 June 2022, the World Trade Organization (WTO) held an extended 12th ministerial conference (MC12), after it had been postponed twice owing to the pandemic. Although the outcome of the MC12 was the result of hard-won compromises, it covers a wide range of key agenda items and may be said to provide new momentum for the WTO, which critics have often portrayed as moribund. The WTO has proved its centrality for crafting multilateral solutions for global challenges, notably against the backdrop of rising geopolitical tensions. EN (PDF – 558 KB)
Globalization’s gut check: World Trade Organization gathering offers a test of free trade system
(Politico) The future of globalization faces a major test as the World Trade Organization kicks off its first big decision-making meeting in five years in Geneva on Sunday. The immediate issues on the table involve Covid-19 vaccine patents, environmentally harmful fishing subsidies and global food security concerns heightened by Russia’s war in Ukraine. But the bigger question looming over the gathering is whether the WTO can still forge international cooperation at a time when multiple crises and increasing frictions between the United States and China are upending the world order.
If the global organization can’t reach a consensus on some of the low-hanging fruit on its agenda, there is little hope it can help tackle the world’s biggest challenges.
WTO-World Bank publication stresses key role of trade in responding to health crises
Trade plays a critical role in ensuring access to medical goods and services during global health crises such as the COVID-19 pandemic. This is one of the key findings from a new WTO-World Bank publication launched by the WTO Director-General, Dr Ngozi Okonjo-Iweala, and the World Bank Managing Director Mari Pangestu at an online event on 3 June. In her opening remarks, DG Okonjo-Iweala underlined the need for greater international cooperation to improve global health security.
Trade Therapy: Stronger Trade Systems for Better Health
The report studies how trade in medical goods and services in many ways contributed to global health security during the crisis by getting critical supplies to places where they were needed most.
How the WTO Changed China The Mixed Legacy of Economic Engagement
(Foreign Affairs March/April) WTO membership, the new consensus goes, has allowed China access to the American and other global economies without forcing it to truly change its behavior, with disastrous consequences for workers and wages around the world.
… But rather than judge China’s WTO entry in the categorical terms of success or failure, a more productive way forward would be to understand the ways in which WTO membership did lead to positive change within China—and when and why that positive change started to slow and then reverse. Joining the WTO had a stronger liberalizing effect in some parts of the Chinese state than in others, and that liberalization was more forceful at some points in time than at others. At least for a few years, China’s accession to the trade body bolstered Chinese reformists and helped authorities push through necessary changes, in the process showing that multilateral institutions can boost domestic reform in China.
‘Law of the jungle’: World Trade Organization appeals court shut down by U.S.
Global commerce will lose its ultimate umpire Tuesday, leaving countries unable to reach a final resolution of disputes at the World Trade Organization and instead facing what critics call “the law of the jungle.”
The United States, under a president who favours a go-it-alone approach to economics and diplomacy, appears to prefer it that way.
The terms of two of the last three judges on the WTO’s appellate body end Tuesday. Their departure will deprive the de facto Supreme Court of world trade of its ability to issue rulings.
Among the disputes left in limbo are seven cases that have been brought against Trump’s decision last year to declare foreign steel and aluminum a threat to U.S. national security and to hit them with import taxes
China, EU lambast United States for miring WTO in crisis
(Reuters) – The United States came under fire from China and the European Union on Monday, accused by both major trading partners of taking protectionist measures and bringing the World Trade Organization (WTO) to its knees.
Japan, Switzerland and Canada also criticised Washington, but U.S. trade ambassador Dennis Shea charged that China’s “unfair competitive practices” were harming foreign companies and workers in violation of WTO rules, and he vowed to lead reform efforts at the watchdog.
President Donald Trump’s administration says the WTO is dysfunctional because it has failed to hold China to account for not opening up its economy as envisaged when Beijing joined in 2001.
To force reform at the WTO, Trump’s team has refused to allow new appointments to the Appellate Body, the world’s top trade court, a process which requires consensus among member states. As a result, the court is running out of judges, and will be unable to issue binding rulings in disputes.
G20 agreement backs ‘rules-based’ order but bows to Trump on trade reforms
Communique emerges from all-night talks
US national security adviser John Bolton takes hardline stance
(The Guardian) World leaders have signed off on an agreement which reaffirms a basic commitment by the world’s biggest economies to multilateral trade and a “rules-based international order”, but bows to US demands for urgent reform of the World Trade Organisation (WTO).
Agreement on a joint communique was by no means guaranteed at the beginning of the summit, when US negotiators took hardline positions, rejecting any mention of multilateralism, the “rules-based order” or the role of the International Monetary Fund (IMF) as a global safety net.
Failure to agree would have called into question the survival of the G20 as a forum for maintaining global economic stability, and could have accelerated the slide towards protectionism.
France’s president, Emmanuel Macron, declared a victory for restoring international institutions at a moment when “multilateralism is going through a real crisis”. European unity on basic principles had helped save the summit, he said.
… The compromise language keeps the basic principles on which most of the leaders in Buenos Aires insisted, in return for acknowledgment of problems in the international trading system and a commitment to address them. In particular they pledged to reform the WTO, which sets the rules for global trade and provides a forum for resolving disputes. The leaders agreed to make significant progress on reform before the next G20, in Osaka next June.
(Mother Jones) Two days of difficult negotiations at the G20 came to a close on Saturday with a nonbinding six-page statement that attempts to defuse the brewing trade war between the United States and China, by committing, vaguely, to reforming the World Trade Organization. “We recognize the contribution that the multilateral trading system has made,” the statement read. “The system is currently falling short of its objectives and there is room for improvement. We therefore support the necessary reform of the WTO to improve its functioning. We will review progress at our next Summit.”
Global trade reform must include China, U.S., Jim Carr says after hosting WTO meeting
(CBC) “We are setting the framework for a more constructive momentum around real measures for reform,” Carr said at the closing press conference. “Starting small has allowed us to address problems head-on and quickly develop proposals.
“That said, we recognize that we are in the process of setting the table for a larger effort, broadening to all members, and that effort must include the United States and China.”
Carr also said the work would have to expand eventually to include all 164 members who currently subscribe to WTO rules.
Only 12 other WTO members joined Canada for this first gathering: Australia, Brazil, Chile, the European Union, Japan, Kenya, Mexico, New Zealand, Norway, Singapore, South Korea and Switzerland.
The group was intentionally diverse, with representatives from different geographic regions and from states at different stages of economic development and integration.
Nevertheless, they all “share the value and belief that the rules-based international order is worth preserving, and the best way to preserve it is to reform it,” Carr said earlier in the day.
Roberto Azevêdo, director-general of the WTO, said that the idea behind the meeting was to start small and find common ground that could be sold to the wider membership.
Senior American officials are skeptical of the value of the multilateral rules-based trading system and are pursuing “America first” policies that allow the U.S. to use its economic clout as leverage in negotiations. The WTO, by contrast, was designed to address the concerns of smaller economies and less-developed countries.
In particular, the U.S. objects to China’s status in the WTO. It argues that it shouldn’t be treated like a market economy, since the state effectively controls its industries. American officials want any WTO reform process to focus on clamping down on China’s unfair trade practices — but it’s not clear that was the main focus of the Ottawa talks.
Australia is stepping up to lead in vital reforms to the WTO
By Senator Simon Birmingham, Australia’s Minister for Trade, Tourism and Investment.
In an ideal world, each of us provides the goods or services that we can most efficiently produce, with this exchange between peoples, nations and economies bringing benefits for all. In addition to keeping costs down, trade minimises the risk of scarcity and promotes opportunity for countries to share benefits such as technology development and product diversification. … A maze of rules help us to trade in ways that make it worth businesses – from sole traders working from home, to major corporations – taking the risks of selling overseas. These World Trade Organisation (WTO) rules have also been a key element in the steady reduction over recent decades in barriers to trade. However, these rules are under strain and in need of modernisation.
The strains and pressures bearing upon the WTO are complex. Its rules are not perfect and there are genuine concerns that not everyone plays by either the spirit or the letter of them. Excessive use of subsidies, unfair advantages provided to state-owned enterprises, the unilateral application of higher tariffs, a lack of transparent reporting, a failure to keep rules up to date with modern business practice, and deliberate undermining of dispute-resolution mechanisms are all real threats to the system.
We will urge demonstration that the WTO is fit for the future by engaging willing nations to start negotiating new rules relevant to e-commerce. Just as Australia has been a global leader for the reduction of agricultural subsidies and tariffs through the Cairns Group of nations, we recognise the future importance of electronic and digital trade. The pursuit by some nations of new restrictions around how and where data can flow or be stored are examples of future threats that the WTO can help to head off.
Trump’s Threat to Leave the WTO Could Be a Saving Grace
The president’s argument is spurring the first efforts to address what major members concede is a need for change.
(Bloomberg) …the biggest long-term impact of the U.S.-China cage match may be felt not in Washington or Beijing, but in Geneva, home to the World Trade Organization.
Trump has long argued that the WTO, the traffic cop for the world’s trading nations, has favored China unfairly ever since the Asian giant joined the body in 2001. And his bombastic rhetoric that global trade’s rules of the road have allowed policymakers in Beijing to run roughshod over U.S. businesses is as much a gripe with the WTO as it is with China’s government.
If the WTO doesn’t “shape up,” Trump told Bloomberg in an Aug. 30 interview, the U.S. will pull out. His administration has also provoked a more immediate crisis by blocking the appointment of judges to the institution’s appellate body, slowly strangling world trade’s supreme court.
Despite all the criticism that Trump misunderstands trade’s role in global prosperity, the U.S. assault on the WTO has also prompted the first earnest efforts to address what the European Union, Japan, and other major members concede is a need for change.
That the efforts to save the WTO are taking place in the shadow of an escalating trade war between China and the U.S. is lost on no one. Neither are the possible consequences, nor the reality that the WTO’s 164 members have over the past two decades amassed a reputation for failing to tackle anything difficult.
But efforts to save it are under way. In September, Canada and the EU published separate blueprints for reforming the three pillars of the WTO’s work—negotiation, dispute settlement, and monitoring—and embarking on an update of global trading rules. Canada in late October will host a meeting of like-minded WTO members in Ottawa that will exclude the U.S. and China. EU officials are fanning out to Beijing, Washington, and other capitals to build support for reform.
The discussions are about more than arcane procedures. In their papers, the EU and Canada argue for an update to global trading rules that have gone largely untouched since the organization was founded in the 1990s. Both also propose a growing use of “plurilateral,” sector-specific negotiations. Those allow smaller groups of members to circumvent the usual requirement for unanimity, thus eliminating the practical veto power that even a small WTO member can wield.
U.S. not invited to save-the-WTO summit in Ottawa
(Canadian Press) Canada has not included the United States in an upcoming meeting aimed at saving the international trading system because it doesn’t share the views of the 13 invited countries, says the new Canadian trade minister.
Canada will host senior ministers from 13 “like-minded” countries for a two-day discussion in Ottawa later this month to brainstorm ways to reform the World Trade Organization, said Jim Carr, Canada’s newly appointed international trade diversification minister.
Carr said the group of countries he’s convened ultimately wants to persuade Washington of the continued usefulness of the WTO, but for now the best way forward is without the U.S. in the room.
The WTO is one of a long list of international organizations and agreements derided by U.S. President Donald Trump and his protectionist administration. Trump’s top economic adviser, Larry Kudlow, has at times branded the WTO as ineffective and simply “broken. In the case of the WTO, the U.S. has moved beyond hostile rhetoric and blocked the appointments of new judges to its dispute settlement body, which is threatening to paralyse the organization and prevent it from making decisions.
Canada is inviting Australia, Brazil, Chile, the European Union, Japan, Kenya, South Korea, Mexico, New Zealand, Norway, Singapore and Switzerland to two days of talks on the WTO starting Oct. 24 in Ottawa.
The Global Trade System Could Break Down
By Anne O. Krueger
Because the World Trade Organization tends to operate beneath the surface of the global rules-based trading system, it is easy for people to forget the indispensable role that it plays. But now that the Trump administration is waging a quiet war on the institution, the international community must stop taking it for granted.
(Project Syndicate) Ten years after the failure of Lehman Brothers, we know that multilateral action was crucial in preventing the so-called Great Recession from becoming even worse than it was. Back then, it was the global financial system that was tottering. Today, it is the global trade system that is in jeopardy.
Over the past 70 years, multilateralism has served the world well. Much to its credit, the United States eschewed retribution and reparations after World War II. Instead, it led the way in establishing the three major economic institutions – the International Monetary Fund, the World Bank, and the World Trade Organization (formerly the General Agreement on Tariffs and Trade, or GATT) – that form the basis of the international economic order that is still in place today.
Each of these institutions has made a significant contribution to global economic growth, but none more so than the WTO. Owing to the expansion of an open multilateral trading system under the GATT/WTO, trade since WWII has grown 1.5 times faster than global GDP.
Canada Floats Alliance to Buffer WTO From U.S. Protectionism
By Bryce Baschuk
(Bloomberg) Canadian trade officials, who spent August working on a draft of the reform proposal called “Strengthening and Modernizing the WTO,” are seeking to forge an alliance of like-minded countries to “restore confidence in the multilateral trading system and discourage protectionist measures and countermeasures,” according to a copy of the draft obtained by Bloomberg.
A group of senior-level trade officials will gather in Geneva on Sept. 20 to discuss the Canadian reform proposal and prepare the groundwork for ministerial talks scheduled to take place in Ottawa from Oct. 24 to Oct. 25.
A U.S. withdrawal from the WTO potentially would be far more significant for the global economy than even Trump’s growing trade war with China, undermining the post-World War II system that the U.S. helped build.
“This is a crucial moment in the way that the international community thinks about trade and the trading system,” WTO Director-General Roberto Azevedo said in speech Tuesday. “The outcome of this debate could shape the system for a generation.”
WTO members secure “historic” Nairobi Package for Africa and the world
(WTO) The Nairobi Package contains a series of six Ministerial Decisions on agriculture, cotton and issues related to least-developed countries. These include a commitment to abolish export subsidies for farm exports, which Director-General Roberto Azevêdo hailed as the “most significant outcome on agriculture” in the organization’s 20-year history.
The other agricultural decisions cover public stockholding for food security purposes, a special safeguard mechanism for developing countries, and measures related to cotton. Decisions were also made regarding preferential treatment for least developed countries (LDCs) in the area of services and the criteria for determining whether exports from LDCs may benefit from trade preferences.
“Two years ago in Bali we did something that the WTO had never done before — we delivered major, multilaterally-negotiated outcomes,” DG Azevêdo declared. “This week, here in Nairobi, we saw those same qualities at work. And today, once again, we delivered.”
The WTO’s Tenth Ministerial Conference was held in Nairobi, Kenya, from 15 to 19 December 2015, the first such meeting hosted by an African nation. The Conference was chaired by Kenya’s Cabinet Secretary for Foreign Affairs and International Trade, Amina Mohamed.
WTO members concluded their Tenth Ministerial Conference in Nairobi on 19 December by securing an historic agreement on a series of trade initiatives. The “Nairobi Package” pays fitting tribute to the Conference host, Kenya, by delivering commitments that will benefit in particular the organization’s poorest members.
World Trade Organization strikes ‘historic’ farming subsidy deal
Countries in the World Trade Organization (WTO) have agreed to abolish subsidies on farming exports.
Developed countries agreed to stop the subsidies immediately and developing nations must follow by the end of 2018.
The WTO, which represents 162 countries, called it “the most significant outcome on agriculture” since the body’s foundation in 1995.
But longstanding talks on other trade barriers were left unresolved at the end of the summit in Kenya.
Removing agriculture export subsidies is intended to help farmers in poorer countries to compete more fairly.
The World Trade Organization tries to remain relevant. Attendees in Nairobi are expected to conclude the largely stalled Doha round of talks, aimed at making globalization work better for developing nations. If the negotiations fail, the WTO’s relevance will suffer.
WTO strikes ‘landmark’ IT trade deal
The World Trade Organisation (WTO) has struck a “landmark” deal to cut tariffs on $1.3 trn (£838bn) worth of technology products.
The deal will update the 18-year-old IT Agreement and add 200 products to the zero tariff list.
It is expected to give a boost to producers of goods ranging from video games to medical equipment.
The WTO says the sum is equal to global trade in iron, steel, textiles and clothing combined.
“Today’s agreement is a landmark,” said WTO Director-General Roberto Azevedo.
“Eliminating tariffs on trade of this magnitude will have a huge impact,” he continued.
“It will support lower prices – including in many other sectors that use IT products as inputs – it will create jobs and it will help to boost GDP growth around the world.”
The final technical details will be worked out until December.
Global trade talks can be revived, says WTO head
As the World Trade Organisation (WTO) marks its 20th year in existence, the global body is at a tipping point. The so called Doha round of global trade negotiations has been deadlocked since 2008, just as an increasing number of regional and bilateral trade deals are making progress.
Now the countdown has begun to try to get Doha restarted and the head of the WTO says he is confident that, finally, a deal can be done.
After 19 years of trying, the World Trade Organization delivers a world trade deal.
The 160-member body agreed to overhaul global customs procedures. Mundane as that sounds, some economists say it could result in $1 trillion in new economic activity and 21 million new jobs.
WTO deal paves way for implementing pact
Ending months of deadlock, the World Trade Organisation has agreed to implement the first global trade reform agreement in its 19-year-history.
The deal means the 160-member global trade body can begin putting into action a landmark deal reached in Bali in late 2013 to overhaul global customs procedures.
Economists have estimated the measures could help create $US1.0 trillion ($A1.08 trillion) in economic activity and 21 million jobs worldwide.
“We are back on track!” an ebullient WTO Director-General Roberto Azevedo told reporters.
“We have renewed the commitment to the multilateral system,” he added.
The member states adopted two texts presented on Monday: the Trade Facilitation Agreement (TFA) protocol, aimed at streamlining global customs procedures, and one on the management of food stockpiles.
Less is More: Reforming the WTO
By Brett House
(OpenCanada) Simpler, smaller, narrower and softer: the agenda for the WTO laid out above is all of these things and it might, to some, seem a rather defeatist line. But it’s also a case in which less is almost certainly more: more prioritization in the Organization’s work program, more focus in its negotiations, more nimbleness in its decision-making, and more engagement with complementary venues that can support the WTO’s work. Far from a scaling back, this four-point agenda represents a strategy to enhance the centrality of the WTO in the pursuit of greater openness between countries. Sticking to a conservative “hard-core” course of business as usual would be clearly inimical to the long-term health of the Organization. In a diverse, multi-polar world, we need a range of different ways to get free trade “eggs” into our collective liberalization basket. Some will be hard boiled, some will be soft boiled, but either way, they’ll produce gains for the global economy.
A version of this piece was published by the Salzburg Global Seminar on May 22, 2014.(See below)
Brett House: “We need hard and soft approaches to trade liberalization”
Salzburg Global Fellow advocates for not putting all the trade eggs in the WTO basket
The Salzburg Global Seminar session New Dynamics in Global Trade Architecture: The WTO, G20 and Regional Trade Agreements met on the heels of the provisional end in December of negotiations under the 9th Ministerial Conference of the World Trade Organization (WTO) at Bali. The understandings on trade facilitation reached at Bali have breathed a new sense of possibility into the WTO’s multilateral trade negotiation processes. They also underscore that the WTO’s legalistic, comprehensive and consensus-driven procedures need to be supplemented by softer approaches that, while not legally binding nor fully inclusive, can help crystallize political support and stimulate concerted action for freer international trade.
While Bali undoubtedly marked a fresh achievement and carries substantial positive demonstration effects for the multilateral system, considered views on the long-term import of the Bali discussions are mixed. For some, Bali marks the beginning of a feasible path to rescue the WTO’s 12-year Doha Development Agenda (DDA) negotiating round from a longstanding stupor. It is a tangible step that shows the system works and that the DDA can be brought to a conclusion, perhaps in piece-meal steps.
For others, Bali is a new indicator of just how impaired the WTO’s fully inclusive, consensus-based negotiating processes have become. It’s no exaggeration to say that finding common ground on trade facilitation is almost the least that WTO Members could have done to qualify Bali as a success. Trade facilitation is not one of the DDA’s core issues, but it is amongst the more easily accessible of low-hanging policy fruits. In fact, many aspects of the Bali package had already been implemented unilaterally by WTO Members (WTO 2013). Some aspects of trade facilitation aren’t even narrowly about trade: they’re more akin to international development assistance and capacity building.
Not much life left in the WTO
The World Trade Organization is turning 20. But with the chasm between its industrial and developing member states, it won’t survive much longer after this anniversary, says DW’s Rolf Wenkel.
(Deutsche Welle (DW)) It took almost 20 years to reach an acceptable conclusion via last year’s famous Bali compromise. Without going into too much detail: According to most experts, developing nations benefit the least from the new agreements. And that’s why it’s not hard to predict that the Doha Round will probably have been the WTO’s last.
That’s because agreements in the negotiation rounds and in the WTO’s organizational structure can only be reached by a unanimous vote, just like in all the other UN organizations. This used to make sense; it was supposed to put pressure on the participants to agree, to reach a compromise. But now the unanimity rule has become a boomerang: There is always a member that will refuse everything; a nation that will block all action in the WTO.
To add a bit of melodrama to the proceedings, it’s possible the desperate efforts in Bali heralded the WTO’s final hour. But there may be life in the old dog yet. Developing nations – and the 640 employees in Geneva – can only hope so.
American trade policy
How to make the world $600 billion poorer
Barack Obama’s unwillingness to fight for free trade is an expensive mistake
(The Economist) IN JULY 2008 Barack Obama, then a candidate for the presidency, declared before an adoring crowd in Berlin that “true partnership and true progress [require] constant work and sustained sacrifice.” So it is with free trade. If not championed by leaders who understand its broad benefits, it will constantly be eroded by narrow economic nationalism. Mr Obama now appears to be surrendering to protectionists within his own party. If he cannot drag Democrats back to their senses, the world will lose its best opportunity in two decades for a burst of liberalisation. It will also be a signal that America is giving up its role as defender of an open global economy in the same way that Mr Obama has retreated in foreign policy.
Mr Obama did little to promote free trade during his first term, but has seemed bolder in his second. He launched America into ambitious new deals with large Pacific economies and the European Union, breathing new life into global trade talks. Momentum built up; the “constant work and sacrifice” paid dividends. Members of the World Trade Organisation agreed on a package of trade reforms in December—the first truly multilateral deal in the organisation’s 20-year history. Diplomats credit the White House’s new resolve for helping to bring stubborn parties to the table. Progress suddenly seemed possible in other areas, such as liberalising trade in services and information technology, and reducing barriers to the exchange of “environmental goods and services”, which would make it cheaper to curb carbon emissions.
The hitch is that Congress must approve trade agreements. Previous presidents had the advantage of “fast-track” trade promotion authority, which let them present deals to Congress for a simple yes or no vote. Without it, lawmakers can wreck carefully negotiated deals with toxic amendments. No country would engage in serious talks with America under such circumstances. Fast-track is therefore essential—and elusive. Congress last granted it in 2002; it expired in 2007. The Obama administration blithely asserted that Congress would renew it, but many lawmakers, primarily Democrats, have signed letters opposing it. Harry Reid, the Senate majority leader, has all but ruled out a vote this year. And on February 14th Joe Biden, the vice-president, told a gathering of Democratic leaders that he understood their opposition. The White House appears to have given up with scarcely a fight. A fast-track vote before November’s mid-term elections seems unlikely (see article).
Major trade powers pledge free trade in green goods
(Planet Ark) The world’s biggest trading powers pledged on Friday to work toward a global agreement on free trade in environmental goods, but they gave no timeline for talks intended to support the fight against climate change.
The United States, European Union, China, Japan and several other developed economies said in a joint statement that the agreement would take effect once there is participation by a critical mass of members of the World Trade Organization.
That gets around the WTO’s requirement for unanimity on trade deals. The initiative is in line with new WTO chief Roberto Azevedo’s drive to break a decade-old deadlock in world trade negotiations by first tackling the most promising areas for agreement.
Last month, the WTO reached its first trade reform agreement at talks in Bali, potentially adding hundreds of billions of dollars to the global economy.
The WTO estimates that the global market in green goods, technologies and services – ranging from solar panels to wind turbines and water recycling plants – at some $1.4 trillion.
World Trade Report 2013
Fast-changing nature of world trade poses new policy challenges, report says
The future of world trade, and the global trading system, will be shaped by a range of economic, political and social factors, including technological innovation, shifts in production and consumption patterns, and demographic change, according to the 2013 World Trade Report published by the WTO on 18 July 2013. Director-General Pascal Lamy said: “One element clearly stands out in the Report, and that is the importance of trade for development”. (18 July 2013)
WTO reaches ‘historic’ trade deal in Bali
Agreement approved by ministers seeks to lower trade barriers but critics fear hit to job
The deal falls far short of WTO’s vision of dismantling global trade barriers through the 12-year-old Doha Round of talks, but it is seen as an important step in that direction. … The pact includes commitments to facilitate trade by simplifying customs procedures.
The Washington-based Peterson Institute for International Economics estimated in a report this year the customs measures could create $1 trillion in economic activity and 21 million jobs if properly implemented (PDF).
WTO officials have conceded, however, that uncertainty surrounds how effectively the measures will be implemented, especially in less developed countries.
WTO agreement condemned as deal for corporations, not world’s poor
First global trade deal in 20 years to boost world commerce ‘favours big business at the expense of developing countries’
(The Guardian) At the heart of the agreement were measures to ease barriers to trade by reducing import duties, simplifying customs procedures and making those procedures more transparent to end years of corruption at ports and border controls.
Tense negotiations in recent weeks ahead of the meeting followed 20 years of bitter disputes as developing countries attempted to protect their fledgling agricultural and industrial sectors while allowing them access to markets in the rich west. …
But the World Development Movement (WDM) warned it was “an agreement for transnational corporations, not the world’s poor”.
Nick Dearden, director of the WDM, said: “On the positive side, developing countries have forced concessions on to the pro-corporate agenda of the US and EU. However, those concessions are only the minimum necessary to get through what remains a deal for corporations, not for the world’s poor.
“Here in Bali, social movements, trade unions and campaign groups have supported the efforts of developing countries to get a deal which moves the agenda away from a pro-corporate charter and towards something that asserts the rights and needs of the majority of the world’s population,” he said.
“The aggressive stance of the US and EU means that we have moved only a little, and shows again that the WTO can never be a forum for creating a just and equal global economic system.”
Bali talks to decide fate of WTO
(Reuters) – Crisis is the natural state of world trade negotiations. But this week will be different. Ministers meeting in the Indonesian resort of Bali from Tuesday until Friday will decide the fate of the World Trade Organization, with two possible outcomes: a global trade agreement, the first since the WTO was created in 1995, or a failure that kills off the Doha round of trade talks and casts the WTO into obsolescence.
The 159 WTO members have pushed the crisis to the brink by failing to finalize the text of a deal in Geneva, leaving a Swiss cheese of a draft after marathon talks that WTO Director-General Roberto Azevedo finally halted at 7 a.m. last Monday. Azevedo had repeatedly said the text must be settled in Geneva and there could be no negotiations in Bali. Ministers indulging in political point-scoring and rhetorical grandstanding are thought unlikely to succeed where their Geneva-based trade negotiators have failed. …
Supporters say the deal would be felt globally, with most impact in the poorest countries, since it would set standards for handling the cross-border shipment of goods, making customs authorities help instead of hindering business. Estimates of the value to the world economy vary, with some as high as $1 trillion. Experts say it would be much more important than abolishing import tariffs globally, since bureaucracy and opaque rules are a bigger brake on trade.
Bayu Krisnamurthi, Indonesia’s deputy trade minister, said last Wednesday that there were only four issues to be settled. Negotiators say Argentina and Cuba are among those with issues outstanding, but that the key stumbling block is India.
Joseph E. Stiglitz: The Free-Trade Charade (Project Syndicate) Though nothing has come of the World Trade Organization’s Doha Development Round of global trade negotiations since they were launched almost a dozen years ago, another round of talks is in the works. But this time the negotiations will not be held on a global, multilateral basis; rather, two huge regional agreements – one transpacific, and the other transatlantic – are to be negotiated. Are the coming talks likely to be more successful?
The Doha Round was torpedoed by the United States’ refusal to eliminate agricultural subsidies – a sine qua non for any true development round, given that 70% of those in the developing world depend on agriculture directly or indirectly. The US position was truly breathtaking, given that the WTO had already judged that America’s cotton subsidies – paid to fewer than 25,000 rich farmers – were illegal. America’s response was to bribe Brazil, which had brought the complaint, not to pursue the matter further, leaving in the lurch millions of poor cotton farmers in Sub-Saharan Africa and India, who suffer from depressed prices because of America’s largesse to its wealthy farmers. Given this recent history, it now seems clear that the negotiations to create a free-trade area between the US and Europe, and another between the US and much of the Pacific (except for China), are not about establishing a true free-trade system. Instead, the goal is a managed trade regime – managed, that is, to serve the special interests that have long dominated trade policy in the West.
The humble hero Containers have been more important for globalisation than freer trade
(The Economist) Over time all this reshaped global trade. Ports became bigger and their number smaller. More types of goods could be traded economically. Speed and reliability of shipping enabled just-in-time production, which in turn allowed firms to grow leaner and more responsive to markets as even distant suppliers could now provide wares quickly and on schedule. International supply chains also grew more intricate and inclusive. This helped accelerate industrialisation in emerging economies such as China, according to Richard Baldwin, an economist at the Graduate Institute of Geneva. Trade links enabled developing economies simply to join existing supply chains rather than build an entire industry from the ground up. But for those connections, the Chinese miracle might have been much less miraculous. Not only has the container been more important than past trade negotiations—its lessons ought also to focus minds at future talks. When governments meet at the WTO’s December conference in Bali they should make a special effort in what is called “trade facilitation”—efforts to boost efficiency at customs through regulatory harmonisation and better infrastructure. By some estimates, a 50% improvement in these areas could mean benefits as big as the elimination of all remaining tariffs. This would not be a glamorous outcome, but the big ones seldom are.
Taking Global Trade for Granted
With so many problems facing the WTO, it’s easy to overlook the organization’s sucesses
(OpenCanada.org) Trade barriers are historically low, trade rules are working, and world trade continues to expand. How to keep countries engaged in the WTO – and rally enthusiasm for freer global trade – when the job seems mostly done? The GATT, the WTO’s predecessor, was a response to the economic “failures” of the 1930s – roller-coaster exchange rates, beggar-thy-neighbour trade policies, hostile regional blocs – which did so much to fuel the outbreak of the Second World War. Together with the IMF and the World Bank, the multilateral trading system was based on the idea that a durable world peace could only be constructed on the foundations of an open, integrated, and prosperous world economy. The system has succeeded beyond its architects’ wildest imaginations. Whereas tariffs averaged a colossal 44 per cent after the war, choking international trade and balkanizing the world economy, today over half of all exports – from coal to computer chips – face no tariffs, while another third contend with “nuisance tariffs” of just 2 or 3 per cent.
WTO chief urged to reach out to small nations (Emerging Markets) The decision by a majority of the members of the World Trade Organization to oppose the United States and European Union and back Brazil’s Roberto Azevedo as its new director general shows the era of transatlantic stitch-up for key global jobs is over, experts said. The final leg of the five-month race for the job ended this week when Azevedo beat Herminio Blanco, the former Mexican trade minister who had received the support of Washington and Brussels. “Although Blanco is closer to any free trader’s heart, if he’d won with US and EU support it might have polarized the WTO membership,” said one trade expert who asked not be named. “The days of transatlantic stitch ups are over.”
Azevedo looks to resurrect WTO with patient diplomacy
(Reuters) – Roberto Azevedo, picked on Tuesday to head the World Trade Organization, is in every respect the quintessential Brazilian diplomat: a well-spoken, competent and smooth negotiator with a knack for wooing adversaries into his corner. A career diplomat with two decades of experience dealing with trade disputes, Azevedo will need those qualities more than ever to bridge the gap between developed and developing nations if he wants to reboot stalled global trade negotiations and breathe new life into the Geneva-based WTO. It is a huge task. With the global economy still struggling, protectionism is on the rise and faith in free trade – and the WTO itself – is running low in many countries.
The Next Head of the WTO? Choose Wisely.
It’s time to put someone from the BRICS in charge of the world’s leading trade body. (Foreign Policy) In a historic first, the next leader of the World Trade Organization will hail from Latin America. A field of nine candidates has now been winnowed down to two, one from Mexico and one from Brazil, meaning that, at a crucial moment in the history of the international trading system, the leader of the central organization for resolving global trade differences and shaping future agreements will come from the emerging part of the Western Hemisphere. … According to trade-community insiders in Washington and around the world with whom I have spoken over the past few days, Blanco is seen as the preferred candidate of the United States and much of what might be described as the traditional or old-school trade establishment. Azevedo, on the other hand, appears to have deeper support among the BRICs and among many of the other representatives of the emerging world.