The Road to Bali: The WTO’s Ninth Ministerial

Posted August 29, 2013 by Sophia Murphy   

Free trade agreements

Used under creative commons license from World Trade Organization.

New WTO Director General, Brazil’s Roberto Azevêdo.

It’s increasingly difficult to explain to anyone why multilateral trade talks–once so high on the international policy agenda—are still worth our time and attention. Such attention as international trade garners has moved on to the regional and plurilateral deals, such as the Trans-Pacific Partnership (TPP) and the talks between the U.S. and the E.U. Yet at some level it’s obvious that multilateral co-operation matters more than ever. Trade has to be made to work more effectively for a series of objectives, from reducing pollution and natural resource use to supporting livelihoods to building economies that allow a fairer distribution of benefits. At the same time as we support more decentralized and local control over food systems, we know the world also faces problems that require a multilateral framework.

So where is the multilateral trade community focused? Here is the short version:

  1. The WTO will hold its ninth biannual ministerial conference in Bali, on 3-6 December.
  2. The meeting is taking place 12 years after the Doha Ministerial, which launched the Doha Development Round (DDA), as the then-enthusiastic governments dubbed it.
  3. There is no chance whatsoever that any agreement with remotely the ambition of the DDA will be agreed.
  4. There is a real chance that not even the much-diluted agenda will pass.

That diluted agenda includes three “deliverables” (a favorite term in trade circles). They are agriculture, trade facilitation and an agenda for Least Developed Countries (LDCs).  In agriculture the G33 proposal to allow developing countries more leeway to spend public money on grain reserves is taking the lion’s share of negotiators’ time, although two other proposals, one on tariff rate quotas and the other on export subsidies, are also on the table. In trade facilitation, the premise is innocuous and even important (if you are going to trade, who wants red tape and rent-seeking?) but the proposals assume a lot about how trade should work, assumptions that reinforce the already huge advantages of existing global corporations at the expense of smaller, national firms. Industrialized countries propose to tie trade facilitation to development assistance.  The third agenda, on LDC issues, includes the promise of duty-free-quota-free market access (at one point known as Everything But Arms but in practice not so generous); preferential treatment in the services agreement; clarification on rules of origin (never simple but vastly more complex in an age of global value chains); and, cotton (in particular, ending the U.S. trade distortions that deprive a number of LDCs of potential export markets). (This article from Third World Network provides a good summary of the issues.)

Meanwhile, the trade issues taking most governments’ attention are not on the Doha Agenda at all. The WTO agriculture talks do not address the causes of the global food price crisis. There is no readiness to confront distorting biofuels mandates and subsidies; nor to address natural resource limits and climate change, which is directly affecting production and, combined with low global stock levels and poorly regulated commodities exchanges, increasing price volatility. There is no discussion of the changed context, from one of abundance to one of scarcity, a change that leaves many of the WTO rules impotent. There is no clear idea on how to rebalance rules to reflect the emergence of new dominant trade powers (for example, by re-thinking how to differentiate among countries beyond “developed”, “developing” and “least developed” – not least when some OECD members are still considered developing countries in the WTO rules), nor any discussion of the implications of the replacement of state-trading exporters with an expansion of the existing private grain oligopoly, which has further decreased competition and transparency in grain markets.

And yet multilateral trade talks are important—perhaps more important than ever. The high profile regional and plurilateral deals now in discussion (particularly the TPP and the Trans-Atlantic Trade and Investment Partnership) are full of issues transnational companies want and rich country governments think important: more restrictive intellectual property rights; further deregulation of the laws governing services such as banking; freer rules for foreign investment; harmonization of trade standards to facilitate intra-firm trade. They have nothing to say about balancing interests among countries facing very different levels of economic vulnerability. But the rules they develop could very well circle back to become the new norm for trade rules with other countries, and potentially shape the WTO agenda in future. For all of its failings, the WTO is at least a forum in which all countries have a voice in making those decisions, or in pushing hard for a different course.

It is time that governments undertook another stock-taking exercise (as they did before the Seattle Ministerial), salvaging what is worth salvaging from the Doha Agenda but more importantly looking at what the world needs today from its multilateral trade system. Many food movements are understandably focused on building local production and local markets. Some regions are establishing links that will strengthen food security and improve the possibilities for viable and varied agricultural production. But there is a multilateral agenda that requires attention, from climate change to the regulation of oligopolies in international markets. And there are important benefits for the majority of countries (which are neither industrialized nor yet emerging economics), who are not as easily picked off or marginalized in the multilateral system as they are in the often grossly unequal regional deals between rich and poor countries.

So with low expectations but acutely aware that regional rules alone will not be sufficient, IATP is engaging directly in the agriculture agenda and watching the overall balance of the negotiations to see if and where there is any room to manoeuvre. A narrow range of rich country and rich firm interests has scripted the trade agenda for too long. We wish the new Director General, Brazil’s Roberto Azevêdo, well as he begins his four-year term in September. He has an important and difficult task ahead of him: the establishment of trade rules that better serve the public interest.

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