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Issue #1810      February 14, 2018

WTO Ministerial talks collapse in disarray

The 11th WTO Ministerial Conference, held in December, ended in deadlock and total disarray. As Chakravarthi Raghavan explains, this failure was due to attempts by the rich countries to renege on the organisation’s earlier mandated decisions on key issues of vital importance to developing countries (such as food security) while pushing onto the agenda new issues which had no organic link to trade or the WTO.

The World Trade Organisation (WTO)’s Eleventh Ministerial Conference (MC11), which took place in Buenos Aires on December 10-13, ended in complete failure and some disarray.

In some famous last words at Buenos Aires, WTO spokesperson Keith Rockwell, who was asked at a media briefing on December 12 how he would compare MC11 with other WTO Ministerials, and hard put to present a positive gloss to a conference heading for complete failure, highlighted the hospitality of the Argentine government as a fantastic success of the conference!

He had earlier pointed to a draft joint declaration on “gender equality” sponsored or supported by many delegations, as also the great support of business, ministers and leaders. That draft declaration was among many not adopted, India having blocked it as extraneous to the WTO remit and Doha Development Agenda (DDA) negotiations.

On electronic commerce (an issue deeply dividing the WTO membership but one which his boss, Director-General Roberto Azevedo, promoted at a side-event in Buenos Aires as beneficial to small enterprises, despite their organisations in various developed and developing countries declaring it as inimical to their interests), Rockwell said there is a digital divide. The proponents, he added, have been saying without equivocation that they need technical assistance to help close the digital divide at the same time.

The failure of MC11 was inevitable perhaps from the outset, as host country Argentina and the WTO leadership attempted to ignore mandates and the interests of the vast majority of members. From the start, the conference chair, Argentine Minister Susana Malcorra, rode roughshod over the rights of members at plenary, not giving them the floor to voice any contrary views to her proposals but gavelling consensus where none existed.

Both the WTO leadership and host Argentina were intent on burying the DDA negotiations (as the US and the EU wanted to be able to resile on their treaty commitments). Instead, negotiations on controversial new issues were sought, some not even in the ambit of trade and the WTO, but all aimed at foreclosing any likely competition to existing developed-country dominance of markets.

With the US adamantly refusing to agree to any permanent accord on public stockholding (PSH) programs for food security in developing countries (even as the US and the EU were determined to block any scrutiny of their own agricultural subsidies), the conference saw open, bitter clashes between the US on the one side and, on the other, India, China, South Africa and others which demanded a permanent solution for their PSH programs.

As a result of all this, the Argentine government – which had expended huge amounts to host the conference (and promote its own neo-liberal, neo-mercantilist economic agenda) and had alienated global civil society and public opinion by banning scores of NGOs and denying visas for many more – ended with little or nothing to show for its efforts.

Even its hopes of staging the signature ceremony of an EU-Mercosur free trade agreement as a side-event were not apparently realised. The EU-Mercosur meeting was only able to agree on a common statement and press release on continuing their efforts!

At the conclusion of MC11, a positive spin was sought to be given to the conference through reference to several announced initiatives for plurilateral negotiations and accords on new issues not on the WTO’s mandate. Several of them have even been listed on the WTO website, although it was clear that some were or were likely to be illegal under the WTO remit.

In a Twitter comment on talk of possible future plurilateral agreements, Simon Evenett, professor of international trade and economic development at the University of St Gallen in Switzerland, said it felt more like a case of “back to the future”. Seeking plurilateral instead of multilateral deals reminded him, he said, of the Tokyo Round trade negotiations in the 1970s.

In terms of the Marrakesh treaty which established the WTO, there can be no plurilateral agreement (with conditional rights and obligations applicable to signatories) in areas already covered by existing agreements [under the General Agreement on Tariffs and Trade (GATT) or the General Agreement on Trade in Services (GATS)].

Any such agreement involving changes to the current GATT or GATS schedules of members has to be agreed to by all members by consensus, and any benefits in such schedules have to be extended unconditionally to all non-signatories of the plurilateral accord which are WTO members.

As for a plurilateral agreement in areas of trade not covered by any existing agreement, and that would need to be included in Annex IV of the WTO Agreement, it would require consensus of a Ministerial Conference on the basis of a request from signatories of that plurilateral accord.

In a leaked recording of her remarks at a closed plenary of the WTO membership, the EU Trade Commissioner Cecilia Malmstrom said that MC11 has been a total failure. “We failed to achieve all our objectives,” Malmstrom said in a closed-door meeting of delegation heads, according to the audio recording as reported by US media outlet POLITICO.

“We did not achieve any multilateral outcomes,” Malmstrom was cited as saying. “The sad reality is that we did not even agree to stop subsidising illegal fishing. I hope all delegations here reflect carefully about the message this sends to our citizens, to our stakeholders and to our children. It says a lot about the WTO.”

Malmstrom spoke about “the deficiencies of the negotiating functions of the WTO”, and in an effort to cast the blame (without naming them) on India, South Africa and a few others, she accused some member countries of “cynical hostage-taking” in the multilateral negotiations.

The EU Trade Commissioner’s remarks blaming others for deficiencies in the WTO negotiating function were rather rich, considering that in the WTO’s 22-year history, it has been the EU and the US that have engaged in “hostage-taking” and blocked developing-country demands that they deliver on their Marrakesh treaty commitments and correct the glaring asymmetries in the system.

The US and the EU have been blocking DDA compromise accords in order to be able to continue subsidising and protecting their own domestic markets (including heavy subsidies to their farming sector) and ensure oligopolistic control by their corporations in the global market.

Judging by media reports, it would appear that the attempts by the EU, Azevedo, Malcorra and others to shift the blame for the failure of MC11 to India and a few others have failed. Most reports blamed the US for its blocking of all efforts at several key decisions, such as a permanent accord on PSH programs, a ministerial declaration or any reference to the DDA negotiations.

Third World Resurgence

Next article – Region Briefs

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