For the first time in four years, trade ministers from 164 member economies of the World Trade Organization (WTO), representing 98% of global trade, will meet for the WTO’s 12th Ministerial (MC12) in Geneva – here’s what to expect.
What is the WTO Conference (MC12) – and why does it matter?
The WTO is an inter-governmental organization for negotiating trade agreements, settling trade disputes, monitoring trade policies and delivering technical assistance on trade to developing countries. The Ministerial Conference is the highest decision-making body of the WTO.
Taking place 30 November to 3 December 2021, MC12 will be chaired by Timur Suleimenov, the Kazakhstan President’s Envoy for International Trade.
Trade ministers generally meet at the Ministerial Conference every two years, but MC12 was postponed due to COVID-19. MC12 is also the first global gathering since the appointment of the new WTO Director-General Dr. Ngozi Okonjo-Iweala.
The pressure is on for governments to agree on outcomes. Trade and investment are strong drivers of economic growth and development and have important roles in the global recovery. Merchandise trade has now stabilized at pre-pandemic levels and services trade continues to recover, though global supply chains are logjammed. Trade also played an important role during the pandemic, supporting development, production and distribution of personal protective equipment, vaccines and therapeutics.
Yet governments are divided on how to update trade rules to ensure they are relevant to current challenges, from COVID-19 and digital commerce to climate change, food security and fair competition. These differences play out in negotiations happening in different tracks. Some are “multilateral”, meaning all members are involved, and others are “plurilateral”, meaning some countries move forward based on common interests.
While there is more likely to be success in the plurilateral arenas, some issues need multilateral consensus to deliver tangible progress. Many experts consider multilateral outcomes on trade and health, agriculture trade and harmful fisheries subsidies – the latter mandated by the Sustainable Development Goals – essential to demonstrate relevance and responsiveness, but consensus could prove elusive.
So, what will happen at the WTO Conference in December?
WTO members have been engaging in dialogue in preparation for MC12, and some negotiations will continue into the week. Here are a few issues to watch.
Vaccines and other critical supplies
Negotiations are ongoing for a trade policy response to the pandemic, potentially addressing vaccine distribution, export restrictions, trade facilitation and improved transparency in medical supply chains. Temporary intellectual property (IP) waivers have been debated. IP waivers fall under trade talks because the WTO has an agreement requiring countries to adopt and enforce these rules domestically.
Saving fish stocks
Around 34% of global fish stocks are overfished compared with 10% in 1974. Negotiations have been ongoing since 2001 to eliminate harmful fishing subsidies. A revised text is being discussed ahead of MC12, though challenges remain on different obligations for developed versus developing countries as well as exceptions for developing countries representing a minor share of global fish catch.
Countries have long debated agricultural trade rule reform. Developing countries are keen to see a permanent solution preventing challenges to government food purchase programs when these breach certain trade-distorting limits. Some countries are also pushing to reduce farming subsidies and some for new market access talks. Outcomes here may be limited, but a deal exempting World Food Program purchases from producer countries’ food export restrictions is expected.
A temporary prohibition on customs duties on electronic transmissions, so far always extended at Ministerial Conferences, is up for debate again. Supporters of the duties ban say that it will encourage digital commerce, while those against say governments are missing out on revenue and harming local digital services providers.
In a significant development, 65 WTO members, accounting of 90% of global services trade, have agreed to cut red tape in the way they regulate services. The Reference Paper on Services Domestic Regulation includes commitments to streamline licensing and qualification processes and technical standards affecting services trade. Its implementation could result in $140 billion in cost savings per year in G20 economies, with small businesses benefiting from an additional 2-3% cost reduction compared to large firms.
In another major move, three sustainable trade coalitions will be launched. In one on environmental sustainability, 53 WTO members – including the US, EU and China – pledge to identify concrete actions to boost sustainable trade and launch dedicated discussions on trade-related climate measures. Another initiative by 40-plus countries pledges to phase out fossil fuel subsidies, while nearly 60 countries will look at ways trade rules can tackle plastic pollution.
Negotiations on an agreement to facilitate investment for development began in September 2020 and now involve over 100 WTO members. These talks are looking at issues like streamlining the administrative procedures to make an investment in a country. A draft deal will be presented to participating ministers at MC12, who are expected to mandate conclusion of negotiations by the end of 2022.
Talks on digital trade continue among 86 WTO members, with text finalized on spam, e-signatures, e-contracts, consumer protection and open government data, as well as encouraging signs that countries will align on open internet access and paperless trading.
Helping small businesses
A draft declaration by 64 WTO Members looks to improve information collection, trade processes, access to finance and payments for micro, small and medium-sized enterprises (MSMEs). A new platform will be launched to provide MSMEs with trade-related information. The group has worked over the past four years to make it easier for small business to trade internationally.
Addressing gender inequalities
Another group of 89 WTO members will issue a joint declaration on improving gender-disaggregated data for better trade policymaking and ensuring gender-mainstreaming in the WTO’s development work. A two-year work program will follow MC12.
(Courtesy World Economic Forum)