Tradespotting: WTO Ministerial Conference - stasis or progress?
Chris Maitland, Policy Director at Audley, former diplomat, and trade negotiator, gives a flavour of what to expect at this week’s WTO meeting in Abu Dhabi.
Trade ministers and trade diplomats from across the globe are landing in Abu Dhabi this week to attend the world’s biggest trade talk fest: the thirteenth World Trade Organisation Ministerial Conference (MC13), which runs from 26–29 February. The Conference, typically held every two years, is the peak decision-making forum in the WTO in setting global trade rules.
Expectations for progress in the lead up to MC13 have been modest. For all its significance, when it comes to setting trade rules, the Conference has a track record with as many fits and starts as my first car – a 1978 Mazda 323 with a manual choke. Some commentators are already looking ahead with foreboding to the summit in Abu Dhabi.
National attentions are being pulled elsewhere, particularly by elections and regional conflicts. Two key players critical to progress at this round – the US and India – both have elections this year. In both, championing free trade at the WTO is not seen as a vote winner. But events like the Houthi stranglehold on Red Sea shipping lanes and farmers protests are a reminder to leaders that tackling trade issues should not be a secondary concern. Shipping costs are closely linked to price inflation and protesting farmers are fueled by trade red tape.
So what is expected to be discussed at MC13 and what does it all mean for businesses, citizens and those of us outside the international trade bubble?
Free IP on Covid tests?
The conference will deliberate on whether to extend free access to the intellectual property for Covid19 tests and therapeutics. In 2022, WTO members agreed to waive their IP on Covid vaccinations, to enable nations to vaccinate their populations at speed and stem the spread of the pandemic. Discussion at MC13 will focus on whether to extend this waiver to cover Covid diagnostics and therapeutics as well. Nations that invented the technology – such as the US – are being lobbied by their pharmaceutical industry against an extension. Developing countries are calling for an extension of the waiver citing affordability and access to healthcare for their populations.
Cutting investment red tape
Up for grabs is the chance to lock in rules cutting red tape on foreign investment. A sub-group of WTO members have agreed between them rules that would remove regulations hampering foreign investment. They now seek to lock that agreement into the wider WTO legal architecture at MC13. Getting the Investment Facilitation Agreement across the line with all 164 WTO members would be a boost for the credibility of the organisation and evidence it can continue to produce meaningful outcomes.
Taxing Netflix?
Whether to slap import duties on digital goods is up for discussion. To date WTO countries have agreed not to place border taxes on any digital goods such as software and streaming films. But that could change with some countries such as India and South Africa calling for this agreement to be dropped, opening the way for border taxes on e-commerce to be applied. Adding such duties will generate limited capital for customs agencies but will harm small- and medium-sized businesses (especially in developing countries) by restricting their access to productivity-generating products like software and digital media like international journals.
Fishy business
Trade ministers are also set to discuss whether to lock in further rules to address overfishing of the world’s oceans. At the last Ministerial Conference in 2022 held in Geneva, WTO members adopted rules addressing illegal fishing and agreed to ban subsidies for those fishing overfished stocks. There is a reasonable chance that members can find a way to agree part two of these efforts in Abu Dhabi and produce a deal to address overfishing and overcapacity, which would help towards meeting UN Sustainable Development Goals.
Inside baseball – fixing itself
A final major aim of the conference in Abu Dhabi will be for the WTO to fix itself; that is, mend its own dispute settlement system. Until 2019, the WTO had a dispute settlement body that was seen as the organisation’s shining light. It became a respected forum for resolving trade disputes and its decisions were broadly upheld by member countries. However, since December 2019, the appellate body has been in limbo since the US blocked the appointment of new judges under the Trump presidency, something President Biden has been reluctant to unlock. The US has called for reform to the body and curbing what it sees as judicial overreach. Many commentators think reform will be unlikely given that 2024 is an election year in the US. Biden is unenthusiastic about global trade agreements and Trump has proven to be anti-WTO.
In sum
Host and Chair of MC13 Dr Thani bin Ahmed Al Zeyoudi, the United Arab Emirates' Minister of State for Foreign Trade, is trying to remain upbeat while also managing expectations. “In the present international context with considerable challenges and uncertainty, it is crucial to welcome the ministers at MC with some positive news,” he said. “We need to show them that, yes indeed, reaching agreements on trade issues is possible today.” But unless the major players like the US and India agree to unlock progress, it is likely the MC13 will remain an unlucky number.
By Chris Maitland, Policy Director at Audley.