Walking on broken glass

Published 25 September 2017 in:

We have only a few months to go before many ministers, high officials, trade diplomats, NGOs and others will gather in Buenos Aires for WTOs Eleventh Ministerial Conference (MC11). Both MC9 in Bali and MC10 in Nairobi were moderately successful and delivered negotiated outcomes on several important areas. Can we expect something similar for MC11?

On the surface it might look encouraging. Negotiations have intensified and on several areas like fisheries subsidies, domestic support in agriculture, domestic regulation in services etc., there are a number of concrete proposals on the table. In terms of technical preparation and serious negotiations, the WTO is in a better place now compared with the preparations before both MC9 and MC10.

Yet the context is very different. The outcome of MC10 was in many ways positive, but it also left a few important questions unanswered. Is the Doha Development Round (DDA) dead as a concept or not? How do we deal with “new” issues (i.e. issues that were not part of the DDA mandate)? We have also seen how a number of fundamental issues that have simmered just below the surface in the WTO for many years have begun to emerge. Some countries want to reform the dispute settlement system. Some argue that the shift in the balance of economic power that we have seen since the WTO was founded in 1995 must be better reflected in the organization’s work, including in the different rights and obligations of members. Some basic responsibilities that WTO members share (like notifications and other transparency measures) are being ignored by many. Plurilateral negotiations have started in some areas and others are being discussed; how do they fit in to the work of the WTO?

These are just some examples of the very fundamental questions that the WTO faces.

Even if many of these questions are not new the WTO has always managed to move on and deliver results anyway. One key reason for this is that the organization has had powerful champions. But this has changed. Protectionism is on the rise again in many regions of the world. Restrictive policies that have been tried (and failed) repeatedly are suddenly back on the agenda in many countries. Often the discussion on trade today is shockingly out of date and has very little to do with how trade works in the 21st century.

I have highlighted the lack of trade champions before on this blog (15 June 2015). Then it was specifically related to the negotiations leading up to MC10. Today their absence is much more fundamental because it concerns the global trading system per se. And it is a worrying trend.

This also means that making predictions for MC11 is even more difficult than before. The critical question today is not whether countries will manage to agree on specific areas of the negotiations. The question today is if enough countries want multilateral trade negotiations at all.

You always have to tread lightly in trade negotiations because there are plenty of sensitivities and many of the issues are interlinked. But today the linkages not only connect with other areas of negotiations, but also to more fundamental questions about the future of the multilateral trade system. We are walking on broken glass and we will need great balancing skills if we want a deal at MC11. Common sense is a rare commodity today. And it is a commodity that is difficult to trade.