The World Trade Organisation’s 14th Ministerial Conference (MC14) will take place from March 26 to 29 at Yaoundé, Cameroon. The meeting comes at a time when the WTO is facing questions over its functioning, including the slow pace of negotiations and discussions, an almost defunct dispute settlement mechanism and even its existence amidst the rise of protectionist trade and trade policies.
There have been calls for reforms of the WTO, which is also a key agenda of the upcoming MC14, with a plenary session on March 26 to discuss issues around reforms and dispute settlement. Ahead of the conference, the office of the US Trade Representative came out with a second report, following a previous one in December, calling for reforms at the WTO, a stance that has also been supported by the European Union.
What is the WTO?
The WTO was set up on January 1, 1995, with the objective of building a rule-based global trading order. Unlike the General Agreement on Tariffs and Trade (GATT) that preceded the WTO and covered only trade in goods, the WTO was to cover trade in goods, services, as well as intellectual property and provided new rules and a forum for settlement of trade-related disputes between countries.
Today, the WTO has 166 members and accounts for 98% of world trade. Headquartered in Geneva, decisions at the WTO are taken by consensus. The WTO’s top-most decision-making body is the Ministerial Conference, which meets every two years. There’s no doubt that the WTO has done considerable work in expanding global trade. While the MC is seen to give equal voice to all members, it has also proved to be contentious and often considered to be the reason for the slow pace of decision-making by the WTO.
What has the US report called for?
On the eve of MC14, the US issued a report outlining its views on several key issues for WTO reform, building on its earlier report of December 15. “The WTO needs to change if it intends to have any relevance as the international trading system transitions to focus on reciprocity and balance. The United States, with this report, continues to lead on concrete proposals to promote member-driven reform discussions,” said USTR Jamieson Greer. The US has called for a more flexible pathway to incorporate plurilateral agreements into the WTO architecture and a rethink of the unconditional Most Favoured Nation principle.
It has also called for a level playing field and greater transparency from members by notifying them of their trade measures. The US has underlined the need to modernise the eligibility for Special and Differential Treatment to ensure that the benefits of S&DT are reserved for Members with the greatest difficulty integrating into the trading system. Both the US and the EU believe developing countries like India and China no longer require these benefits.
“Members need to embark on a frank conversation on the link between MFN and reciprocity,” it underlined. The US has further called for a review of the role of the WTO Secretariat, noting that ‘for well over a decade, the Secretariat has been moving away from its member-driven moorings to pursue its own agenda’. Some developed countries, including the EU, have called for a more flexible approach and reforms to the WTO, while others, like the Least Developed Countries Group, the African Group, the African, Caribbean and Pacific Group, China and Paraguay have their own points of view.
What is India’s stance on WTO reforms?
India remains watchful of the discussions, and government sources have indicated that reforms of the WTO must ensure that the level playing field is maintained and the interests of the Global South are given equal treatment and parity. It has also warned against diluting consensus-based decision-making that could impact development priorities under MFN and S&DT principles. “India and countries like South Africa defend consensus as the foundation of a fair multilateral system. They argue it ensures equal voice for developing countries and prevents dominance by major economies,” said a report by Global Trade and Research Initiative.
Are WTO reforms on the agenda at MC14?
Yes, reforms of the WTO are on the agenda and preparatory work for it has been going on for some time as the global trade body tries to remain relevant amidst the turbulent trade and economic developments across the world. WTO Director-General Ngozi Okonjo-Iweala has said MC14 will be consequential for the organisation. “It is what I call a ‘Turning Point Ministerial’, one in which we can show that the organisation is up to the job of taking criticism seriously and using this to reposition itself,” she said in March, when WTO members met to review preparations and the agenda for the meet. At MC14, ministers will be asked to endorse the work plan to frame the scope for reform efforts based on a report by the reform facilitator, Petter Ølberg of Norway.
A recent report by RIS underlined that the MC14 will serve as a “litmus test for the future of the WTO”. The three issues that strike most directly at the WTO’s institutional foundations, namely the reform of the organisation’s decision-making framework, the restoration of a functioning dispute settlement system, and the question of how Joint Statement Initiatives are governed and integrated, will together determine the direction the WTO takes in the years ahead.
