WTO (Negotiations, Regular Work, Leadership)

Middle East and North Africa (MENA) Forum: An update on WTO Reform

During this informal meeting for MENA trade negotiators, CUTS International Geneva presented the key elements and findings of a recent research study exploring the state of the WTO Reform debate. The study provides a snapshot of the current debate on WTO reform, and the main issues discussed therein. In particular, it analyses the key elements found in proposals by developed and developing members respectively, and suggests possible ways forward for the latter.

CUTS International, Geneva is implementing the project “Keeping Pace with Trade Development 2020”. The project aims to enable LDC and Developing Country WTO delegates to better take advantage of international trade for their development. It particularly supports their informed participation in WTO negotiations in the run-up to the 12th ministerial conference, including regarding joint statements on e-commerce and gender, while strengthening the links of Geneva missions with their capitals and private sector on the ground.

Rashid Kaukab, Executive Director, CUTS International, Geneva welcomed representatives from MENA beneficiary countries, present in this virtual meeting.

The main outcomes from a recent research study on “WTO Reform: Context, Main Issues and Possible Way Forward for Developing Countries” were presented. The current debate on WTO reform could be considered to have been set in motion by developed countries in 2018. However, calls by developing countries to reform the functioning of the WTO in an effort to address asymmetries and bring balance to the WTO rules, as well as to create more policy space for themselves to pursue development, are almost as old as the organisation itself.

While developed-country WTO Members’ calls for reform seemingly targeted developing countries for perceived non-compliance with their notification and transparency obligations and to differentiate between developing countries, developing countries’ response has been to frame their proposals wider so as to bring into the reform purview issues of particular interest to them, and shine a light on the multilateral trading system inequities and asymmetries developing countries argue are aligned in favour of developed countries.

The following six areas form the contours of the emerging reform agenda, based on proposals so far tabled: resolving crucial and urgent issues threatening the existence of the WTO; strengthening the deliberative, negotiating and rule-making function of the WTO; strengthening the WTO’s monitoring and transparency function; reforming WTO council and committee procedures; increasing the WTO’s relevance in global economic governance, and principles to guide the reform.

In the proposals so far on the table, WTO Members congregate in agreement on the need to reform the WTO’s notification and transparency procedures, as well as the procedures of WTO councils and committees. No other area of the proposed reform seems to lend itself to the possibility of agreement amongst Members.

The reform discussions are already underway, but all over the place in the WTO councils and committees. Going towards MC12, it would be beneficial to the reform process for WTO Members to agree on a structured dialogue, including the scope, objectives and principles of the reform

It is critical that members discuss why there is a lack of compliance with monitoring & transparency function, especially concerning the notifications’ obligations; as well as why councils and committees have not worked sufficiently. This could be explained by the lack of capacities of many developing countries and LDCs to be able to fully comply.

The floor was then opened for discussion among the participants. It was recognized that the research study was very useful, especially that it covered the various proposals of both developing and developed countries and categorised them, hence facilitating a holistic view of WTO reform discussions. Participants agreed with the conclusion of the study that, for a way forward, WTO members need to agree as soon as possible on a structured dialogue, including the scope, objectives and principles of the reform. They emphasised the need for small developing countries and LDCs to develop and submit reform proposals to have their views, needs and concerns considered. That said, they added that facilitating a balanced and inclusive WTO reform agenda is one of the priority actions expected from future Director-General.

Participants pointed out the need to urgently address the impasse in the Appellate Body which is imminently threatening the credibility and existence of the organisation. They also reminded the necessity of addressing long-term unresolved imbalances in WTO agreements, these as mentioned above, represent the origin of the WTO’s reform calls. Addressing asymmetries in the Agreement on Agriculture and ensuring efficient implementation of Special and Differential Treatment clauses can help catalyse a common purpose, bring multilateral negotiations on track and slow the multiplication of plurilateral agreements creating a “spaghetti bowl” effect.

Finally, participants concluded that while plurilateral negotiations can be considered positive in the current situation, as a channel allowing continuity of trade discussions, they have been recently taking various forms, addressing new issues and adopting different settings and processes, making it difficult to understand their relationship with and their implications on WTO agreements. CUTS has published a paper several years ago on plurilaterals, which could be quite informative for delegates in that context.