How to get the WTO back on track

Ambassador Amina Mohamed

The World Trade Organization is in need of repair and reform. For two decades its member governments have struggled to sustain its negotiating function. Despite some successes, such as reducing red tape at the border, eliminating agricultural export subsidies and cutting tariffs on information technology products, they remain deadlocked on key issues. The need is urgent to update WTO rules to respond to the changed global realities of today and the challenges of tomorrow.

The inability of the WTO membership to negotiate more effectively has undermined other aspects of its operations, in particular how governments settle trade disputes. Growing concern among some members over the way the dispute settlement system was working led to the freezing of its appeals mechanism. A particular problem is the perceived over-reach in legal findings, going beyond what governments have managed to negotiate. Many members consider a solution here to be among the most urgent, a sentiment with which I agree.

Another issue receiving considerable attention is the ongoing negotiations on fisheries subsidies. These seek to control subsidies that contribute to over-fishing and illegal, unreported and unregulated fishing. While controlling these excesses, negotiators also recognize the need to preserve livelihoods dependent on fishing in developing countries. These negotiations are not only about trade rules, but more significantly about preserving the health of our oceans and sustaining a threatened resource.

Another long-standing challenge for members has been to agree upon the appropriate balance of the WTO’s rights and obligations. This is a challenge among a highly diverse community of members with differing priorities and levels of development. This issue has dogged the multilateral trading system since its establishment and is in urgent need of resolution.

In more recent years, subsets of members have on occasion resorted to so-called plurilateral agreements. In general, there has been an expectation that plurilaterals will be open to all members. Such arrangements are welcomed by many, but not by all. Some are concerned that the benefits of such negotiations will be extended to all the WTO Membership, and others that they can be adopted without the need for a consensus decision.

The WTO’s weakened negotiating capacity has contributed to a slow response to technological advances. A recent response to this is an ongoing plurilateral negotiation on e-commerce and the digital economy. Awareness is also growing of the contribution that the WTO can make to broader global concerns such as sustainable development, gender issues and indeed the universal desire for peace.

While the WTO struggles to address these and many other challenges, additional stresses weigh upon it. The COVID-19 crisis has put new pressure on governments in terms of keeping their markets open and maintaining supply chains intact, despite the temptation to adopt new protectionist policies and embrace inward-looking solutions.
In the face of these daunting challenges, WTO members must step up and restore multilateralism as the cornerstone of their trade policies, or allow the institution to retreat into obscurity. Governments repeatedly affirm the importance of the multilateral trading system; they must now act to renew it.