Insights from the 13th WTO Ministerial Conference (MC13)

By Samuel Tetteh TEI

The World Trade Organization held its 13th Ministerial Conference (MC13) in Abu Dhabi (UAE) from 26 February to 2 March 2024. The Ministerial Conference saw 166 trade ministers and their respective delegations converging in Abu Dhabi to deliberate on several critical issues, ranging from food security and e?commerce to fisheries subsidies and reform of the WTO, as well as domestic regulations of services and investment facilitation.

Accessions

Ministers endorsed the accession of two new Members, Comoros and Timor-Leste. The first countries to join the WTO since Liberia and Afghanistan joined in July 2016. This brings the organization’s Membership to 166, representing 98% of world trade.

E-commerce

At MC13, Ministers decided to renew the e?commerce moratorium until MC14 or 31 March 2026. The e-commerce moratorium is an agreement that WTO Members made in 1998 not to impose custom duties on electronic transmissions. This, however, is not a permanent agreement. Ahead of MC13, there was a great deal of anxiety about whether or not WTO Members would extend the moratorium on the imposition of customs duties on cross-border electronic transmissions. The Ministerial Decision also instructs officials to re-invigorate their work programme on electronic commerce to develop their capabilities in the digital commerce sector. Given the extent of e-commerce trade, the decision to continue the moratorium on the imposition of customs duties is of critical importance for many businesses worldwide, both large and small.

Fisheries subsidies

In the run-up to MC13, a further agreement on fisheries subsidies seemed to have the most momentum toward an agreement.  At MC12, Members concluded an Agreement on Fisheries Subsidies (AFS). The AFS prohibits the granting or maintaining of subsidies to entities involved in (1) illegal, unreported and unregulated (IUU) fishing or (2) the fishing of overfished stocks.

The goal at MC13 was to ban subsidies for fishery-related shipbuilding, labor, and fuel, among other things. The major barrier to a deal was disagreement over the mechanism that leveled the playing field for developing countries. Known as special and differential treatment (SDT) provisions, these policy mechanisms are meant to ease the burden of compliance with WTO agreements. There were disagreements concerning the lengths of transitional periods available for developing countries and the provisions on forced labor. Work on these will continue post-MC13. As such, there was no deal on fisheries subsidies at MC13.

Agriculture and food security

A deal on agriculture, which has been ongoing for years without any substantial progress, was considered dead by the end of MC13. Prior to MC13, there appeared to be a more positive dynamic. Yet, Ministers failed again to reach consensus on the scope, balance and timeline of agriculture negotiations.

The primary hurdle in the negotiations centered around the issue of public stockholding for food security purposes. Stockholding permits states to purchase, stockpile, and distribute agricultural goods in order to retain a supply of food for people in need. These programs can distort trade when the government purchases food from farmers at fixed prices. The Ministers agreed in the short term at MC9 not to challenge public stockholding programs in developing countries.

During MC13 last week, the G33 pushed for the long sought-after permanent solution to public stockholding. Other developing countries and the United States refused to accept the permanent solution outright. That disagreement also prevented consensus on enhanced disciplines on agricultural export restrictions that may threaten to undermine food security in net-food importing countries.

Covid 19 related TRIPS waiver

The Trade-Related Aspects of Intellectual Property (TRIPS) waiver expansion, which would have expanded regular intellectual property rights waivers on Covid-19 vaccines to the production and supply of Covid-19 diagnostics and therapeutics, was rejected by opposition from the United States, Switzerland, and the United Kingdom. Ministers, however, encouraged continued work on lessons learned from the Covid?19 pandemic, and on developing effective solutions for future pandemics.

TRIPS non-violation and situation complaints

The Ministers adopted a decision to extend the moratorium on non-violation and situation complaints under the TRIPS Agreement. Such complaints allow Members to challenge, in WTO dispute settlement, IP-related measures that are not inconsistent with TRIPS obligations but that nonetheless undermine benefits expected from the agreement.

Plurilateral agreements and initiatives

Given the varied membership within the WTO, achieving consensus in multilateral negotiations among all Members is challenging. Talks and resulting decisions among only some WTO Members are called “plurilateral” to opposed to “multilateral” activities which are agreements among the WTO’s whole Membership.

Domestic regulation of services

Another early development was the entry into force of a plurilateral agreement on domestic services regulation by 72 WTO Members. This new agreement aims to improve transparency and procedural fairness around how governments regulate traded services. It will reduce unintended trade-restrictive consequences of measures relating to licensing requirements technical standards, and qualification requirements. The Organization for Economic Cooperation and Development recently estimated that this agreement would unlock $150 billion globally due to a reduction in red tape and increased transparency.

 Investment facilitation

Another important plurilateral initiative concerns Investment Facilitation for Development (IFD). At MC13, 123 WTO Members to adopted the final text of the Investment Facilitation for Development Agreement. However, the Members failed to formally integrate this agreement into the WTO legal text. Many developing Members view investment facilitation as a tool of development, as of MC13, the IFD Agreement has more than 120 parties, including many developing and least-developed Members, alongside most developed Members.

Sustainability-related initiatives

Members have also come together in different groupings to work on a series of sustainability-related initiatives. A group of 78 WTO Members released a Ministerial statement on trade actions to tackle plastics pollution and a plan for next steps in their talks, while another group of 76 WTO Members unveiled a package of outcomes from their talks on trade and the environment and a roadmap for further results by MC14. A further 48 WTO members presented a plan to work towards cutting harmful fossil fuel subsidies. A group of 61 Ministers – met alongside MC13 and issued a set of voluntary actions as best practices to align trade with climate action.

WTO reform

At MC13, Ministers endorsed progress on the WTO reform process, which covers the organization’s deliberative, negotiating and dispute settlement functions.

1. Dispute settlement reform

During MC12, the Ministers acknowledged the pressing need to address challenges surrounding the WTO’s dispute settlement system. They issued directives for officials to restore a fully and well-functioning dispute settlement system accessible to all Members by 2024.

At MC13, a 36-page draft outlining reforms to the WTO’s dispute settlement system was presented, a product of an informal process led by Geneva-based officials. Over 160 Members wanted consensus on dispute settlement beyond the simple declaration, but that language was allegedly blocked due to U.S. pushback. A Ministerial Decision was passed, urging officials to expedite discussions in an inclusive and transparent manner, building upon the achieved progress. Ministers also renewed their commitment to continue work on unresolved issues, including an appeal/review mechanism, and to achieve the objective of having a fully and well-functioning dispute settlement system accessible to all Members by 2024.

Reform of the deliberative and negotiating functions

At MC12, Ministers agreed to conduct a comprehensive review of the functioning of the WTO’s deliberative and negotiating functions. Subsequently, at MC13, Ministers expressed appreciation for the efforts already made to enhance the functioning of WTO Councils, Committees, and Negotiating Groups, with the aim of improving the organization’s efficiency and efficacy. They directed officials to persist in the ongoing “reform by doing” process and mandated them to report on progress at the forthcoming 14th Ministerial Conference (MC14).

Conclusion

While some may claim that MC13 was a disappointment, those with a more nuanced understanding of the organization know that this is a marathon not a sprint. Outcomes result from long, hard and technically complex negotiations that rely on cooperation and compromise.

The writer is a professional with expertise in trade policy, market-entry, and business development. He can be reached on [email protected]

 

Trade Policy | Market Entry | Business Development

MSc. Development Finance

[email protected]

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