WTO Summit ends in deadlock; here is what it means

By: | Published: December 15, 2017 6:23 AM

The 11th ministerial conference of World Trade Organisation (WTO) ended in stalemate late on Wednesday as member-nations failed to set aside differences on issues ranging from the role of the trade body as a multilateral institution to public procurement programmes for food security.

World Trade Organisation, WTO, Trade body, Food securityThe 11th ministerial conference of World Trade Organisation (WTO) ended in stalemate late on Wednesday as member-nations failed to set aside differences on issues ranging from the role of the trade body as a multilateral institution to public procurement programmes for food security. (Image: IE)

The 11th ministerial conference of World Trade Organisation (WTO) ended in stalemate late on Wednesday as member-nations failed to set aside differences on issues ranging from the role of the trade body as a multilateral institution to public procurement programmes for food security, marking the closure of the biannual event without a joint declaration. While a failure to produce a joint statement has precedents (there were deadlocks in Seattle and Cancun), what sets the Buenos Aires ministerial apart was the stinging criticism by a key member — the US — of the rules-based, multilateral trading system that the WTO represents. The US refusal to pursue a permanent solution to the issue  of public procurement — as committed by it, along with  all others at the Nairobi ministerial in 2015 — also cast a pall over the sanctity of pledges made at the WTO.

The attempts by small groups of nations to secure work programmes or negotiating mandate on new issues like e-commerce, investment facilitation, micro, small and medium enterprises, and gender — spearheaded by the developed world — signals increasing efforts to secure “short-term plurilateral arrangements” within the multilateral WTO framework.  For India, the conference ended without much gain or loss. While its attempt to secure the lasting solution to the public stock holding issue was thwarted by the US, it successfully resisted pressure from various groups of nations to include new issues, such as e-commerce, investment facilitation, micro, small and medium enterprises, and gender in the WTO’s negotiating mandate without first concluding the Doha development agenda that is crucial to the interest of developing nations.

The only worthwhile agreement — a consensus on including a work programme on disciplines on fisheries subsidies with a view to arriving at a decision by the next ministerial in 2019 — at the latest ministerial was also in sync with India’s position. The non-negotiating mandate of an existing work programme on e-commerce will continue, as desired by India, among others, but no new issue on e-commerce was included in the agenda. “Due to divergences among members, and a few members not supporting acknowledgement and reiteration of key underlying principles guiding the WTO and various agreed mandates, ministers could not arrive at an agreed ministerial declaration,” the Indian government said in a statement. The impasse also meant there is now no deadline to achieve the lasting solution to the public stock holding issue.

Nevertheless, work on issues of India’s interest, including trimming of massive trade-distorting farm subsidies provided by the developed countries, the permanent solution to public stock holding and a special safeguard mechanism for developing countries will continue at the WTO.  Importantly, India’s procurement programmes are fully protected for perpetuity by a permanent peace clause secured in 2014. As such, India’s subsidy on rice and wheat procurement is much lower than the mandated ceiling of 10% of the value of production.  The deadlock at the ministerial also dashed hopes for any new agreement on e-commerce or reduction in farm and fishery subsidies. US trade representative Robert Lighthizer suggested that talks among smaller groups of “like-minded” WTO members would be a better approach. European Union trade commissioner Cecilia Malmstrom said in a conference that the ministerial exposed one of the WTO’s biggest deficiencies of having to seek unanimous consent of all the 164 members for an agreement.

She said the blame lay partly with the US but didn’t exonerate others of their role in blocking progress at the ministerial. WTO director-general Roberto Azevedo impressed upon members to do some “real soul searching” about the way forward. “Multilateralism doesn’t mean you get what you want; it means you get what is possible,” he said. “Progress was going to require a leap in members’ positions. Unfortunately, we didn’t see that.” He reminded members that the WTO system isn’t perfect but “it’s the best we got”.  Earlier this week, Lighthizer told the ministerial that the WTO was becoming a litigation-centred organisation, losing its essential focus on negotiation. He also questioned special and differential treatment to fast-growing and wealthy developing countries.

Azevedo said while the US move to block the appointment of judges to hear international disputes at the WTO were not part of the formal deliberations, many members in the ministerial voiced their concerns at the move that can potentially paralyse the body’s dispute settlement system in coming months with the terms of some of the judges coming to an end soon.

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