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With U.S. taking the backseat, WTO struggles to find its way

With U.S. taking the backseat, WTO struggles to find its way

12/14/2017 05:00 AM EST

BUENOS AIRES, Argentina — The United States was here, but it wasn’t.

As the 11th biennial conference of World Trade Organization ministers wrapped up on Wednesday, the U.S.’s presence and the absence of its bully pulpit was apparent — for better, and for worse. Washington’s ambivalence on a number of crucial issues contributed in no small part to the anticlimactic ending of a four-end summit widely branded as “disappointing,” a number of officials said.

Initially, WTO members convened here harboring a nervous fear that the Trump administration would arrive in Buenos Aires seeking to tear apart the entire global trading system.

U.S. officials here dealt no such blow. And yet still the thousands of government trade ministers who spent hours negotiating behind closed doors this week are parting ways having accomplished very little.

“Ministers said that it was like having 164 children in a family,” Susana Malcorra, who chaired the talks, said at a closing press conference when reflecting on the previous four days of talks. “It’s not easy to carry on everybody.”

Top officials have offered a series of explanations about why they were unable this week to reach comprehensive agreements on areas as wide-ranging as e-commerce and agriculture stockpiles. No negotiations were ripe enough to wrap up, some say, while others note that members across the board remained too inflexible and unwilling to cooperate.

Although none of them pointed to Washington alone as the reason for the stalemate, there is a broad consensus that negotiations were hindered by a lack of strong leadership atop the trading body — a vacuum that was until recently filled by the United States.

“The United States is a big player, it’s a major participant in those conversations, and every time that one of them has a different perspective or a different take on the issues that are being discussed, it introduces uncertainties,” WTO Director-General Roberto Azevêdo told reporters during the close of the conference Wednesday evening. “It introduces a different equation.”

For the U.S. delegation, led by U.S. Trade Representative Robert Lighthizer, the decision to attend the ministerial at all sent a show of measured support for the beleaguered institution — one that was broadly welcomed by other nations and supporters of the WTO.

Lighthizer chose not to stay the whole time, instead flying back to Washington Tuesday night before the close of events. But he did come, and many other U.S. officials did stay the full four days, in a move that appeased some trading partners and avoided shaking the global trading system to its core while still sending a signal that the U.S. was not willing to play games.

There is little that any other country can do to entice the U.S. to put its old hat back on, one high-level participant noted. “It’s interesting, because how do you hold someone hostage when they don’t want to pay ransom?”

The U.S. has been settling into its new backseat role for several months now. While much of the preparatory work for this week’s conference was being done throughout the year in Geneva, for example, the U.S. mission has been without a political appointee at the helm, with the White House’s nominee to serve as ambassador to the WTO remains unconfirmed.

And in the meantime, no effective leader has emerged to fulfill the vacant role of strong-armed compromise broker who can drive talks and get things done.

Some attendees noted that the mood in negotiating rooms in Argentina was in some ways “less angsty” than previous rounds because many members had already resigned themselves to the fact that no deals could possibly be reached. In the same vein, talks most nights wrapped up in late evening rather than the wee hours of the morning because Azevêdo was not—- as he had during recent ministerial meetings — holding closed-door talks in his office among key members in desperate attempts to close agreements.

Other countries made great strides to step up in the U.S.’s absence — chief among them the European Union and EU Trade Commissioner Cecilia Malmström. But despite her stated intention of assuming the role in Buenos Aires of new “multilateral leader,” an obviously exasperated Malmström acknowledged on Wednesday that the EU alone did not have the power to force a fruitful negotiation.

“I think the EU is still — and here we work with Japan and others — trying to take up a role … to show the way,” Malmström told reporters late Wednesday afternoon.

“We are 28 in the European Union, we weigh a lot, but we can’t do this alone, obviously,” she added. “And when other big partners are not there to cooperate we cannot achieve an agreement. That’s the sad truth.”

Negotiators were further hindered once again by the trade body’s consensus structure, where any country can single-handedly block any agreement by voicing opposition. The Indian delegation was in many negotiating rooms considered the obstructionist, particularly because it refused to consider any negotiated outcome that did not also include a permanent agreement on public food stockpiles.

This “hostage-taking” attitude, as critics describe it, ultimately led to the negotiations’ demise.

“This isn’t the fault of the EU,” said Bernd Lange, chair of the European Parliament’s trade committee, when discussing the EU’s leadership role. Rather, he said, it “results from the stubborn behavior of many countries that want to push through their individual interests, come hell or high water.”

But the EU was among the most vocal in describing its disappointment. “I hope all delegations here reflect carefully about the message this sends to our citizens, to our stakeholders and to our children,” Malmström said at the close of talks. “It says a lot about WTO.”

The result is that negotiators are leaving Buenos Aires with little in the way of tangible achievements: no negotiated outcomes, no cohesive ministerial declaration charting their path forward from here.

And while the U.S. did little to help countries be successful, the competing interests of such a vast body were also laid bare.

“The WTO doesn’t need Trump to blow it up,” one U.S. source with knowledge of the talks said. “Because the WTO is already struggling under its own weight to accomplish anything.”

Hans von der Burchard contributed to this report.

WTO 11 Ministerial Meeting – News Updates

WTO Ministerial Meeting – Press Releases

WTO 11 Ministerial Meeting – Press Releases

Sweden donates SEK 19.2 million to help developing countries participate in global trade

The government of Sweden is contributing SEK 19.2 million (approximately CHF 2.3 million) to help developing countries improve their trading capacity and participate fully in global trade negotiations.

EU gives EUR 1 million to enhance trading skills of developing countries 

The European Union is contributing EUR 1 million (over CHF 1.2 million) to improve the trading capacity of developing countries and to help them play a more active role in trade negotiations.

Lithuania donates EUR 26,000 to enhance trading capacity of developing countries

The Government of Lithuania is contributing EUR 26,000 (approximately CHF 30,000) to help developing and least-developed countries participate effectively in global trade. This donation to the WTO’s Doha Development Agenda Global Trust Fund will finance training workshops for officials in Geneva and elsewhere to help them better understand and implement WTO agreements and to take part in trade negotiations. Since the creation of the fund in 2001, over 2,500 workshops have been organized.

Finland donates EUR 1.7 million to help developing countries participate in global trade

The government of Finland is contributing EUR 1.7 million (approximately CHF 2 million) to WTO trade-related programmes to help developing countries and in particular least-developed countries (LDCs) participate in multilateral trade negotiations and better access global markets.

France donates EUR 50,000 to support food safety, animal/plant health standards and trade

France is contributing EUR 50,000 (approximately CHF 58,000) to the Standards and Trade Development Facility (STDF) in 2017 to help developing countries comply with international food safety, animal and plant health standards and therefore access agricultural markets more easily. The donation will help developing and least-developed countries improve their sanitary and phytosanitary (SPS) capacity.


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