WTO: the Way Forward

Don’t count on a revival of the Doha Round

By Elizabeth Morgan

The General Council of the World Trade Organization (WTO) on Monday confirmed the first term appointment of Dr Ngozi Okonjo-Iweala of Nigeria as the new Director General starting on March 1. Her appointment has been widely welcomed as the first African and woman to hold this post.

From local presentations recently, there seems a view that the appointment of Dr. Okonjo-Iweala could signal a revival of the Doha Round, which would be welcomed by most developing countries. I don’t think we should count on that. I addressed the current status of the Doha Round and arising issues in several previous articles.

First, it should be recalled that many developing country Members reluctantly joined the consensus to launch the Doha Round in 2001. They did so having been promised that development would be at its core. That actually did not happen as envisaged. For us in the Caribbean, not much has come from the Working Group on Small Economies and from the proposals out of the Small Vulnerable Economies (SVEs) Group without a fully concluded Doha Round.

The developed Members wearied of the Round wanting faster liberalization of trade and the emerging economies, Brazil, China, India and some other Members, to make better market access offers. With this not forthcoming in the Round, they went to plurilateral negotiations. The Doha Round was effectively sidelined at the 2015 Nairobi Ministerial Conference (MC10). The major deliverable from the Round was the Agreement on Trade Facilitation from the 2013 Bali MC9. What is mainly left now is the effort to conclude an agreement on fisheries subsidies.

The US Trump Administration (2017-2020) ensured that very little happened at the WTO. It gutted the Appellate Body rendering the dispute settlement mechanism only partially functional. The focus was on China and thus on reforming the WTO to address the development status of members, having them graduated from Special and Differential Treatment, and on the operation of state trading enterprises questioning whether China is a market economy.

It is already evident that while President Biden has pledged to reengage at the multilateral level,  his position in  the WTO, which might be more civil, may not veer far from that of former President Trump. President Biden is already talking about a made in America policy. The Democrats were not known as free traders. President Biden may not favour a revived Doha Round as designed in 2001.

His nominee for the post of US Trade Representative, Katherine Tai, is known to have strong views on China. A clear sense of the US posture in the WTO may not be forthcoming until Ms. Tai is confirmed by the Senate which should be by the end of this month. The team will be completed when the new US Permanent Representative to the WTO is appointed.

Biden/Xi Jinping conversation

The relationship between the USA and China will remain central in US trade policy and thus in the WTO.

On February 10, President Biden spoke with President Xi Jinping for two (2) hours. This is viewed as unusual for these types of calls, but there is familiarity between Biden and Xi. It is reported that trade and economic issues were high on the agenda. The White House summary of the meeting states that President Biden underscored his fundamental concerns about Beijing’s coercive and unfair economic practices. The Presidents discussed the COVID-19 pandemic, shared challenges of global health security, climate change, and preventing weapons proliferation. Both sides seem to think that the conversation went well. Does this signal improved cooperation at the WTO?

Biden, it seems, wants to see China as a competitor and not an adversary, but intends to retain pressure on them over trade and technology violations. The Administration is assessing its position on China and wants to collaborate with its allies, the UK, EU, Canada and others of like mind.

WTO Reform

So, for the way forward at the WTO, recall that this is a member driven organization, and we have to see what line the US and others will take. COVID-19 is definitely a priority. The EU and others have proposals on reforming the dispute settlement mechanism and want to act on new issues, such as e-commerce. India wants to address food security and Brazil wants agricultural subsidies reduced. China has voiced its commitment to upholding the multilateral trading system. Last week, Okonjo-Iweala told Time in an interview that the world needs the WTO but the WTO needs extensive, serious reform. This indicates where her focus will be as Members commence preparations for MC12 assuming the date and venue are confirmed.

As a region and as members of the Organization of African, Caribbean and Pacific States, we, in the Caribbean, have to now reflect on the status of work at the WTO and what will serve our interests in these immediate circumstances.

Those of us outside of government have to endeavor to be up-to-date and to understand the current regional and international trade issues in order to make informed commentary. In the region, I continue to detect a wariness and also disinterest in addressing international trade policy issues although trade makes an essential contribution to our small, open economies. The continuing limited capacity in this field, at all levels, may be a contributing factor.

Submitted by Elizabeth Morgan, Specialist in International Trade Policy and International Politics

Source: CARICOM TODAY