When it comes to global summits on major challenges, this year’s meetings in New York on the U.N. Sustainable Development Goals and in Paris on climate change have so far taken the limelight. But December’s 10th Ministerial Conference of the World Trade Organization in Nairobi deserves equal attention. It will mark the WTO’s 20th anniversary and will be the first such conference to take place in Africa. But it also deserves attention because it has important problems to solve. Not everything is going as it should in the WTO, and that’s a problem for a global economy dependent on trade.
The WTO’s main tasks are negotiating the opening of new markets and setting the rules of world trade. With no end in sight for the Doha Round, it currently is not doing very much of either.
Since the WTO’s creation in 1995, it has been a valuable international arena for dispute settlement, for containing protectionism and ensuring coherence of global trade rules. But in terms of concrete agreements, its only major achievement is the 2013 Trade Facilitation Agreement concluded in Bali. It’s a vital step forward, but not enough to show for 20 years of work.
To make matters worse, the Trade Facilitation Agreement did not create the momentum we hoped it would, and too many WTO members have since then remained stuck in their old positions with no willingness to compromise. Even the important role of the WTO as an arena for settling disputes will be at risk if its rule-book is not adapted to today’s realities. Thus, in Nairobi we need to free the machinery of the WTO from the constraints that have been holding it back.
That means WTO members need to approach the ministerial meeting in Nairobi with a new mind-set. We should not focus on old discussions about whether the Doha Round is alive or dead. This is a false dichotomy.
To move ahead, the Ministerial Conference does need to take decisions on parts of the Doha Round. The EU pushed hard for a comprehensive Doha deal to be concluded at Nairobi, but it has unfortunately become clear that WTO members will not be able to accomplish this. We therefore need to chart a more productive path forward.
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After Nairobi, the WTO will have to continue its work on unresolved issues. That includes issues, such as trade-distorting domestic support in agriculture, that need a multilateral solution. This would respond to the key request of developing countries, who rightly want to see historical distortions on world agriculture markets tackled. Issues like this can be solved if we can respect fundamental principles of the WTO, like flexibilities for developing countries when they are needed, and bring a fresh approach.
But we must also begin to move beyond the Doha Round. At Nairobi we should agree to begin conversations, and at some point negotiations, on issues that are not covered by the Doha mandate but pose real challenges for today’s global trade. We must also look at more flexible ways to negotiate in the WTO. These would be major steps forward for the system.
The reality is that trading partners continue to develop responses to global trading challenges, and this will not stop. But today this only happens in an expanding web of bilateral and regional trade agreements. More of this work needs to be brought back under the helm of the WTO.
Taking that step, however, depends on WTO Members also producing results in Nairobi itself. If we cannot deliver real economic value and address development challenges, countries will increasingly conduct their trade negotiations elsewhere.
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But there are areas where a result is within reach. And the most important of these is the subsidising of agricultural exports.
This is an important long standing issue for development that needs a coherent, balanced and multilateral solution. And the EU has shown that we are prepared to lead efforts to find it. That’s why we, together with the government of Brazil, have decided to table a formal proposal for a solution.
The EU and Brazil has recently tabled a proposal for discussion at the WTO to phase out all forms of export subsidising, directly or indirectly, of agricultural exports. This is vitally important in order to restrict unfair competition and distortions in the domestic markets of vulnerable developing countries, as well as on the global market.
Our proposal is comprehensive. It makes no sense to target just one type of measure while allowing other trade distorting practices to continue unabated. Hence, we not only address agricultural export subsidies, but also export credits and other similar measures.
There are good chances for success, even in the short weeks that remain before December’s meeting in Nairobi. We came close to a deal in 2008 and all but a few WTO Members agree that compromise is the right basis for negotiations. Our proposal updates it to today’s realities, and makes an honest attempt at finding a compromise that takes into account the concerns of our partners.
Moreover, the fact that Brazil and the European Union — frequently on opposing sides in the WTO — are working together is a strong sign that broad consensus can be found. It also shows that the EU is prepared to make a strong contribution to a Nairobi deal. This would not have been possible without the EU’s major agricultural reforms of the last decade. The potential is there for a significant contribution to an ambitious development-friendly package.
But the EU believes the Nairobi meeting can also do more to benefit the poorest and most vulnerable countries. We could ensure duty-free and quota-free access to our markets for products from the world’s poorest countries. We could also streamline the complex rules of origin that often make it difficult for countries to take advantage of access like that. A Nairobi package could also include new measures to eliminate distortions in the trade of cotton. Finally, we could agree on ways to improve access for services exporters in the poorest countries to markets around the world.
There is limited time left to reach agreement. But an outcome that addresses some real problems like these and helps put a re-energized WTO back at the centre of the international trading system is still possible. The EU is committed to doing what it takes. We call on all WTO members to do the same.
Cecilia Malmström is EU Commissioner for Trade.