WTO MC13 may not achieve much

Starting today, the trade ministers of 164 member countries of the World Trade Organization (WTO) will be meeting for four days at Abu Dhabi for the 13th Ministerial Conference (MC13) to review the progress made since their last meeting at Geneva in June 2022 and try to agree on the way forward. The briefing notes prepared by the WTO secretariat detailing the stand taken by various countries on the key issues to be discussed at MC13 show that the views of the member countries are quite divergent on every issue. So, expectations of substantive outcomes on any issue from MC13 are very low.

The global trading rules agreed at the conclusion of the Uruguay round of negotiations at Marrakesh in April 1994 that led to the establishment of the WTO have largely remained unchanged although the technological prowess, geopolitical power equations and economic strengths of the WTO member countries have changed significantly since then. Major hindrances to any reform of the WTO rules include the right of any member to stall decision making.

Meanwhile, unilateral imposition of import and export restrictions, neglect of obligations under the rules, dysfunction of the dispute settlement mechanism, industrial policies giving subsidies for investment and production, emergence of regional trading blocs and proliferation of preferential and free trade agreements etc. have introduced fresh distortions that inevitably result in inefficiencies and suboptimal outcomes.

Indeed, interest of the

WTO members in reforming the trading rules is waning because there is no point in making rules that can be violated at will and cannot be enforced. Even the private sector looks quite uninterested in the role of WTO, even though it is businesses that have the most to gain from uniform trading rules, transparency and predictability.

Given the widespread apathy, MC13 may not achieve much. However, it is reasonable to expect that the WTO members will continue with special and differential treatment for poor countries, moratorium on taxation of international ecommerce transactions, freeze on disputes regarding domestic support for agriculture and suspension of complaints when another member’s action deprives a member country of expected benefits under the intellectual property rights agreement. Some progress may be made on curbing subsides for fishing. It might, however, be difficult to get a pause on carbon border adjustment mechanism of the European Union, even though fears of retaliatory measures that will further distort global trade persist. Similarly, not much may happen on the proposals to not impose controls on exports of food and medicines in case of severe draughts or pandemic emergencies.

All global leaders understand the benefits of free trade but many of them are not willing to annoy the nationalistic elements in their constituencies and vested interests who demand protectionism, under the garb of self reliance, national security, creation of jobs etc. India has generally played the role of the champion of poorer countries by blaming the rich countries for rigging the system and weakening the multilateral institutions to further their own interests. It is difficult to recall any positive proposals or intellectual persuasion for free trade from India.

The WTO is a member driven organisation. If the member countries do not want to ensure a well functioning multilateral institution, the WTO cannot do much. It would be no surprise if many countries pursue plurilateral agreements in some service sectors.