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The WTO remains stuck in its rut

24 December 2017
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“THERE is life after Buenos Aires,” soothed Susana Malcorra, chair of the 11th ministerial meeting of the World Trade Organisation (WTO). Multilateralism may not be dead, but it has taken a kicking. Expectations were low as the meeting began in the Argentine capital. They sank even lower as it progressed. Delegates failed to agree on a joint statement, let alone on any new trade deals.

Many arrived with a culprit already in mind. Robert Lighthizer, the United States Trade Representative, was the face of an administration that is both questioning the benefits of multilateralism and jamming the WTO’s process of settling disputes. As negotiations progressed, some delegates groused that American leadership was lacking. Some even speculated that the Americans might be happy if multilateral talks foundered. What better proof, after all, that the system is broken?

Ms Malcorra, without mentioning the Americans by name, warned against creating scapegoats out of those who might recently have “shifted gear”. The WTO, after all, had problems before Mr Lighthizer took up his job. Decisions are made by consensus, which leaves deals vulnerable to hostage-takers. In some cases, the victim is the negotiating agenda. Still hanging over the WTO is a 16-year-old negotiating round, in theory meant to further global development. Until that round is concluded, members such as South Africa are reluctant to negotiate on any new issues, like rules on e-commerce or investment facilitation.

Members arrived in Buenos Aires in disagreement, and refused to budge. The Indian delegation wanted to lift restrictions on its government’s ability to distribute stockpiles of food. When the Americans refused, the Indians looked for a way to retaliate. They ended up killing an agreement to ban subsidies for illegal, unreported and unregulated fishing—as national leaders had agreed to do by 2020 as part of the United Nations’ Sustainable Development Goals. Cecilia Malmstrom, the European trade commissioner, called this failure “horrendous”.

Amid the triumph of self-interest over the greater good, there were some grounds for cheer. For now, it seems Mr Lighthizer is planning to influence the multilateral system from within. A joint statement released by America, Japan and the European Union pledged “to enhance trilateral co-operation in the WTO” when dealing with excess capacity, forced technology transfer and local-content requirements.

Perhaps more importantly, members are actually moving ahead on some issues. A coalition of countries ranging from America and the EU to Cambodia has signed up to negotiate new rules on e-commerce on a plurilateral, rather than a multilateral, basis. As long as enough members agree among themselves for the deal to be worthwhile, and do not discriminate against other members of the WTO, a deal is possible. The message was clear: if some members want to block discussion, then they will be left behind.

It seems unlikely that a surge of plurilateral agreements will be enough to jolt the WTO into life. For that, the organisation’s members will need to show more commitment to it—and to learn the art of compromise. Roberto Azevêdo, the WTO’s director-general, wrapped up the conference by reminding members that “multilateralism doesn’t mean that we get what we want. It means we get what is possible.” (The Economist)

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The Pan African Chamber of Commerce and Industry was established in 2009 by 35 founding national business chambers to influence government policy and create a better operating environment for business.

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