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Debacle at WTO Ministerial

The world body loses its focus and becomes litigation-oriented.

Debacle at WTO Ministerial
In the lingo of multilateral trade negotiations the words collapse, stalemate, or lack of consensus are purported to convey the plain meaning that the system presiding over the dialogue among as many as 164 member nations of the World Trade Organization (WTO) is in disarray. It has been reduced to a mere talking shop sans action because a few influential members from both the developed and the emerging economies were obsessively interested in riding their own hobby-horses, refusing to budge on issues they deem basic to their national priority and development concerns, as the case may be.

The fundamental concept of give and take in negotiations has lost its sell-by date in these days of the ugly manifestation of protectionism and self-aggrandisement without due regard to weighing the obligations of others as basic decency demands. How else can one construe the closing observations of the WTO Chie Azevedo when he desperately stated that "if we are not improving the lives of the poorest or giving the smallest a chance to compete, we are not doing our jobs"! Even his enlightened appeal to self-interest for the survival of all, if not for their welfare, went on in deaf ears and in exasperation he pithily told the trade ministers and envoys point-blank thus: "It is not compatible to expect multilateralism to work and at the same time to expect to walk out with everything you wanted. This is a recipe for failure".
This is what exactly each member or a few powerful trade majors, including the United States, China, Brazil and India, persisted without attempting to find a common ground for compromise to clinch issues of gravitas that would lift the waning spirit of multilateralism, which is in a moribund state now. It is a sad but sardonic state of affairs in global trade negotiations that the world trade monitoring body, charged with evolving a rule-based trading arena to the common benefit of all, has had to end its three-day ministerial conclave in the Argentina capital in discord in the face of frontal U.S criticism of the group and vetoes from other member nations.
The grim reality was summed up by European Trade Commissioner Cecilia Malmstrom when she told a wrap-up news event that "We have not achieved any multilateral outcomes. The sad reality is that we did not even agree to stop subsidising illegal fishing". The disgruntlement was so deep-seated that it led some ministers, including U.S. Trade Representative Robert Lighthizer, to suggest that negotiations among smaller groups of "like-minded" WTO countries were a better approach going forward! In fact, the plenary began on December 10 with Lighthizer setting a somber tone in a stinging rebuke of the WTO, pointing out that it was impossible to negotiate new rules while many of the current rules were not being followed and that the WTO was losing its focus and becoming too litigation-focused.
Interestingly, a trade expert and Senior Fellow at the Peterson Institute for International Economics in Washington, Chad Bown, said the potential focus on plurilateral parleys between like-minded countries is a natural and positive outcome, if It turns out to bear fruit". Bown cited the 1996 WTO Information Technology Agreement (ITA), which began with just 29 countries lowering tariffs on information technology (IT) products, later got expanded to 82 countries covering 97 per cent of trade in the sector!
As if acting on a cue, on the last day of the Ministerial Conference, the WTO website declared the advent of three such groupings on e-commerce, investment facilitation and micro, small & medium Enterprises (MSME), It further noted that "each representing many WTO members and encompassing participants from developed, developing and least developed countries unveiled their plans to move forward with discussions in the three areas". A point to ponder is that India is obdurately opposed to inclusion of the new issues into the Doha Development Agenda before exhausting the extant remit of the development round to the entire satisfaction of the developing world, If one could recall at the first Singapore Ministerial too in 1996, India opposed stridently the inclusion of non-trade issues, such as investment, competition policy, government procurement and trade facilitation. But these issues had over the years got into the WTO parlance in one garb or another while the trade facilitation agreement had been part and parcel of the WTO in which India also ratified recently! One can oppose topics that one finds disagreeable but one's options get closed in multilateral forum when others join the bandwagon to reap potential benefits! This is the sheer commercial logic that one can ignore at one's own folly and exorbitant cost!
Be that as it may, as many as 71 WTO members would set off exploratory work towards future negotiations on trade-related aspects of electronic commerce with participation open to all WTO members. Together the group accounts for around 77 per cent of global trade. On investment facilitation, 70 WTO members, recognizing the link among investment, trade and development, unveiled plans to pursue structural discussions with the aim of developing a multilateral framework. The proponents of this group, accounting for around 73 per cent of trade and 66 per cent of inward foreign direct investment (FDI), would meet early next year to discuss how to organize outreach activities on this issue. On MSMEs, 87 WTO members, accounting for around 78 per cent of world exports, issued a joint statement declaring their intention to create multilaterally an informal working group on MSMEs at the WTO that would be open to all members. The discussions here would encompass constraints related to foreign trade operations that represent a significant burden for MSMEs interested in participating in global trade. So much for India's resistance and opposition to the new issues that in any way got pushed into discussion stage to start with!
In fairness, the WTO conceded that "no agreement was possible in a number of the substantive issues that were under discussions". One key area where no agreement was feasible was public stockholding for food security purpose, an issue dear to Indian trade negotiators but which drew a blank with the US steadfastly not yielding an inch on the concerns voiced by many a nation that are earlier called the Third World! The WTO was merely content with stating that ministers gave their commitment to continuing to move forward on the negotiations related to remaining relevant issues, including to advance work on the three pillars of agriculture (domestic support, market access and export competitiveness) as well a non-agricultural market access (industrial goods/tariffs), services, development, rules, trade and environment and trade-related intellectual property rights (TRIPS).
For the suave Suresh Prabhu, who took a contingent of Indian media as the guests of the Union Commerce Ministry to cover the ministerial proceedings, the moment of glory was confined to issuing a tepid statement couched in ponderous prose that during the Ministerial "India stood firm on its stance on the fundamental principles of WTO, including multilateralism, rule-based consensual decision-making, an independent and credible dispute resolution and appellate process, the centrality of development and special and differential treatment for all developing countries". It is time India reconsidered expending its energy, efforts, and resources in the waning multilateralism but instead tie up with 'like-minded' groups to wrest the best of benefits as the majority of WTO members have so patently demonstrated by subscribing to the three new issues.
(The views are strictly personal.)

G. Srinivasan

G. Srinivasan

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