June 23, 2022
“The institutional inertia at the World Trade Organisation has only just been broken. Full restoration of the dispute settlement mechanism and consensus on what shape the WTO reform should take remains challenging,” said Pradeep Mehta, Secretary General, CUTS International. He was making introductory remarks at a webinar organised by CUTS to discuss the future of the WTO.
The programme, titled “Future of the WTO or WTO of the Future?” and the first of a series following the recently concluded 12th Ministerial Conference of the WTO (MC12) saw a number of distinguished panellists addressing diverse issues relating to WTO reform. It was moderated by Montek Singh Ahluwalia, former Deputy Chairman of the Planning Commission of India.
Discussions focused on whether the MC12 could provide momentum to revive the institution’s negotiating, monitoring and dispute settlement functions. While some panellists believed that MC12 was a victory by itself, others differed.
In their arguments, if the WTO fails in addressing foundational issues such as the scope and role of consensus in decision making, it will continue to lag behind free trade agreements (FTAs). Not only are FTAs moving beyond WTO rules, they are doing so in divergence with one another and fragmenting the trading order.
Pascal Lamy, former Director General of the WTO, iterated that while there was no alternative to consensus, members must not equate it with unanimity. Not only should members provide reasons behind their opposition, but they must also rethink which issues should be allowed to progress without consensus. This will prevent obstructionism and deadlocks such as the ongoing crisis affecting the Appellate Body, the WTO’s apex adjudicatory body.
Amita Batra, Professor of Economics, Jawaharlal Nehru University opined that open ended plurilaterals may also be discussed as means to circumvent the burdensome demands of consensus in a multilateral framework. However, to ensure that plurilaterals are representative in nature, members will have to define basic norms laying down the terms of participation as well as the scope of beneficiaries.
Beyond plurilaterals, Mark Linscott, former Assistant U.S. Trade Representative, cautioned against the unrelenting growth in FTAs creating massive tensions within the multilateral order. Nonetheless, he opined that the WTO and FTAs could still co-exist without being pitted against each other. On the one hand, FTAs reaffirm the obligations of the WTO. Correspondingly, the WTO too can learn and borrow from FTAs on new age issues such as digital trade, environment and labour, among others.
Deborah Elms, Executive Director of Singapore-based Asian Trade Centre, highlighted another fundamental issue plaguing the discourse on trade-related issues. The agenda to reform the WTO must move beyond a select group of trade negotiators and experts. The WTO cannot progress if lay persons remain unaware or unconcerned about the importance of the WTO and more importantly, the role of freer and fairer trade in raising living standards.
In this regard, Mia Mikic, Adviser, Asia-Pacific Research and Training Network on Trade of the United Nations Economic and Social Commission for Asia and the Pacific, noted that the role of businesses will be paramount in creating a modernised rule book. Creating interested stakeholders, and in turn, a global community that can appreciate the value of a multilateral trading system will take the momentum generated by MC12 further.
In the panel discussion and Q&A session that followed, various dimensions relating to WTO reform and larger questions around the crisis of multilateralism were discussed.
Summarising the discussion, Mr. Ahluwalia emphasised that trade should not be dissociated from considerations of fairness. Trade-generated distributional losses cannot be ignored for too long without grave consequences. He also noted the need for greater high-level political engagement at the G-7 and G-20 to set the tone for the multilateral trade agenda and take it forward.
The virtual session saw enthusiastic participation, with over 70 participants from various parts of the world joining to hear experts deliberating on the future of the WTO. Panellists commended CUTS for facilitating discussion on trade and bringing such political economy considerations to the forefront.
With its headquarters in Jaipur, India, CUTS International has regional centres in Accra, Lusaka and Nairobi covering West, Southern and East Africa. Besides them, it has centres in Hanoi, Geneva and Washington DC. In India, it has a regional centre in Kolkata, a rural development centre in Chittorgarh and a liaison office in New Delhi.
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