The top decision-making body of the World Trade Organisation (WTO) at its latest meeting failed to solve issues with trade-distorting measures and unsustainable practices in the agricultural and fisheries sectors nor restore a mechanism to enforce the global trade rules.
The outcome came despite the ministerial meeting – initially convened from 26 to 29 February in Abu Dhabi – being prolonged until 2 March.
The most significant decision was to maintain the current practice of not imposing customs duties on electronic transmissions for two years. “The decision to extend the e-commerce moratorium is crucial for digital trade,” said the executive vice president of the European Commission Valdis Dombrovskis.
However, the EU was “disappointed at the lack of breakthroughs in other areas”, Dombrovskis said. “Agreements were within reach supported by a big majority, but ultimately blocked by a handful of countries – sometimes just one,” he continued.
“To say it frankly,” the former director for International Relations at DG Agriculture in the European Commission John Clarke told Euractiv, “the definition of success in the WTO ministerial ever since [2022] is avoidance of collapse”.
The former EU official recalled the “Monty Python Parrot sketch”, where the seller of a parrot tries to convince the buyer that the bird is alive while it is clearly dead.
“I’m not saying that WTO is dead, but it’s still in, I would say, intensive care,” Clarke stated.
Appellate body still blocked
The functioning of the appellate body for the resolution of disputes is a particularly sensitive issue for the EU.
The WTO can enforce global trade rules thanks to a dispute settlement mechanism. The mechanism relies on an appellate body, which is essentially paralysed, because the US blocked the appointments of officials to make it work.
“As expected, the US are not really interested in a restoration of the Appellate Body function due to its supranational reach,” Clarke told Euractiv.
The inability to make decisions in the appellate body allows countries to appeal “into the void”, according to WTO jargon, blocking the dispute settlement procedure.
One such dispute that is currently ongoing regards anti-dumping and anti-subsidy duties imposed by the US on ripe olives from Spain. The US measures are inconsistent with international trade rules, confirmed the WTO.
The final declaration on the appellation body simply reiterates the 2022 commitment to have a “well-functioning dispute settlement system accessible to all members by 2024”.
The ministers also failed to make progress on fisheries and agriculture. “The lack of consensus was generated by countries like India, which already disrupted the WTO negotiations in 2017,” the EU fishing industry association Europeche said in a statement.
According to two sources close to the negotiations, India insisted on a 25-year transition period before being fully subjected to the transparency and subsidy reduction disciplines. “Some South Pacific countries and Brazil sought to capitalize on the situation,” Europeche added.
The outcome regarding fisheries subsidies was also “deeply disappointing” Clarke said. “The WTO members have really demonstrated by this their inability to seriously make trade environmentally sustainable with that failure,” he added.
On agriculture, India defended their food stockpiling program, a long-pending issue that other countries consider trade-distortive.
Clarke told Euractiv that the governance of agricultural trade needs “a fundamental rethink”, looking at what kind of agricultural reform will improve food security and environmental and climate sustainability, by focusing on “subsidies bad for the environment”.
“We need to think to what extent, and if so where, we really need agricultural reform, or whether this is the agenda of the last century,” Clarke concluded.