WTO ministerial: the skeptical view - Economy Watch

Analysts Question Relevance, Adaptability of the WTO

Economy Watch, December 14, 2015•  
International Organizations•
 by EW News Desk Team
 

The World Trade Organization contains 162 member states and has existed for 20 years. While it is certainly not the oldest trade organization in existence, many have begun to question its viability in the modern age.

 

The most recent doubts come in the wake of a number of unpopular decisions that appear as anachronisms to some analysts. One example lies in the recent decision against the United States' practice of allowing companies selling canned tuna to identify, voluntarily, if they used dolphin-safe fishing practices.

The present round of concerns arrives in reference to the upcoming ministerial conference in Kenya, which takes place later this week. Many feel the WTO lacks the capacity to respond to a world in which many nations have formed economic alliances that bypass the WTO.
The ministerial conference will include more than two dozen ministers from the WTO's 162 member nations. The talks follow failed negotiations that took place in Geneva earlier this year, and will begin their four-day stint roughly where the Geneva talks concluded.

 

Unfortunately, many doubt that any real progress will occur. "The WTO has to adjust to a changing world environment," saild Wilma Viviers, director of the TRADE research unit at South Africa's North-West University. "There are big forces at play, with countries like the US, the EU, Australia, New Zealand and others who are negotiating free-trade agreements, that may start functioning alongside the WTO soon."

Viviers and others believe the Nairobi meeting will not manage to complete the "Doha Talks" that began in the Qatari capital 15 years ago. At that time, the WTO set an objective of adding billions of dollars to the global economy via cross-border commerce cooperation. Yet, since 2009, progress has stalled due to differences in the goals of wealthy and poor nations, largely over issues like subsidized farming in the developed world.
This, in turn, has led nations to strike out on their own to create trade deals that either partially or wholly do not fall under the WTO's governance. The US has set out to finalize the Trans-Pacific Partnership (TPP) with 12 Pacific Rim nations. The EU and the United States have jointly worked on the Transatlantic Trade and Investment Partnership. A number of other agreements have also taken place between WTO members outside of the jurisdiction of the WTO, itself.
According to Darlington Mwape, Senior Fellow at the International Center for Trade and Sustainable Development, the "Doha Round is not addressing the current needs of its members.”  He added, “unless we adjust the mandate of the Doha round to include other relevant issues, it may turn out to be irrelevant."
According to Bloomberg Business, the discussion during the Nairobi meeting may revolve around the Trade Facilitation Agreement (TFA). This agreement represented a compromise deal designed to improve customs procedures for goods exported from the world's least-developed nations. The WTO believes this could increase merchandise exports by as much as $1 trillion a year. However, at least two-thirds of the WTO's members need to consent for the Trade Facilitation Agreement to pass. If it passes, the Agreement could cut global trade costs by as much as 17.5 percent
Still, few believe such results are possible from this week's talks. William Mwanza, of the Tralac Trade Law Centre said of the meeting: "You wouldn't really expect that the contentious issues will be resolved next week ... It's taken 15 years, and in the past week there hasn't really been so much progress, so you wouldn't really expect much next week."