WTO: Missing in Action

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WTO: Missing in Action

A woman protests the WTO meeting in Kenya earlier this month. (Photo: Reuters)

The World Trade Organization’s 10th Ministerial Conference, held in Nairobi, Kenya from 15-18 December came right on the heels of the final outcome of the 21st Conference of the Parties to the UN Framework Convention on Climate Change (UNFCCC). The contrasts were striking, and not just because of the shift from Europe to Africa, from northern winter to equatorial rains and from environment to trade. There was also the level of interest: everyone who could not be in Paris was watching what went on there from afar while few came to sit in the make-shift tents put up by the Kenyan Government as an NGO centre. The protest marches, organized by farmers’ organizations, gathered dozens of people rather than the several thousands who had come to ministerials past. The multinational lobbyists were few, many having turned their attention instead to pluri-lateral agreements such as the Trans Pacific Partnership (TPP). Not even the world trade editor of The Financial Times came. It seemed that the world could hardly have cared less.

Most importantly, the governments that met in Paris were evidently chastened by their repeated past failures and were at last willing to respond to the mounting political pressure to take action on climate, pressure that was evident in the demonstrations and civic actions that took place across the planet as the governments negotiated. Leaders came to Paris intent on finding a way through the political, economic and environmental complexities of reinventing the basis of economic life on the planet. We need the same for trade. Instead, the heart of the fight in Nairobi was over what the negotiating agenda should include. Many rich countries came to Nairobi wanting to tighten intellectual property rights, open up government procurement for foreign competition, and to deregulate investment and competition laws. Most poorer countries disagree vehemently with this agenda. They want to first complete unfinished business related to trade in agricultural commodities and industrial goods.

The debate really matters because multilateral trade rules are a practical way to juggle competing interests considering the deep power asymmetries that mar the international community. The alternative—pluri-lateral talks managed on a by-invitation basis—leaves the least powerful countries with no voice at all in the discussions. But it is a debate that needs domestic political support. Yet governments treat trade as a top-secret matter, frightened to even engage with parliaments, let alone citizens, on what is at stake. Industry groups get privileged access to their ministers and diplomats, while few countries bother to meet with public interest groups.

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Thus, sadly, in Nairobi, governments had their sights set far, far lower than they had in Paris. There were a few private interests there, keen to maintain privileges (the U.S. cotton industry, for instance). But they had little to fear, despite the havoc their programs cause for some of the world’s poorest people; the U.S., as perhaps the single most powerful WTO member, was also not there to do anything but blame others for failure, despite their starring role in the drama. Just two days before the Ministerial began, the U.S. Trade Representative published a scathing opinion piece in The Financial Times. More broadly, very few WTO members felt any domestic pressure to get a result in Nairobi and what pressure was evident was all in the name of shutting down debate and closing ranks.

This does not mean the Ministerial was not hard work: as one diplomat said to me, failure takes a lot of work, too. The diplomats met and argued, called impromptu briefings and negotiated not just far into the night during the week, but also apparently felt the need for what has become the customary unscheduled additional day of talks to come up with a final declaration.

And the result? The press coverage goes from elegiac: “WTO Nairobi deals good for all,” Kenya’s The Standard; to damning: “South suffers humiliating setback at Nairobi,” SUNS news service; to the view that the WTO is fading to irrelevance because developing countries cannot “get with the programme”: “Trade talks lead to ‘death of Doha and birth of new WTO’” in The Financial Times. A variation on The Financial Times, appearing in The Guardian, importantly, did not blame developing countries for the result: “Doha is dead. Hopes for fairer global trade shouldn’t die, too.”  A sense of civil society organizations’ views can be seen in this story, also in The Standard, which covered the final NGO press conference, “Poor countries walk away empty handed, again.”

Ultimately, the so-called defensive interests prevailed—there will be no new trade liberalization out of Nairobi. It is admittedly hard not to admit to some satisfaction in seeing developed countries commit to the immediate elimination of export subsidies in agriculture (though there are some exceptions that will take time to be phased out). Yet, the push to end other distortions in international agricultural markets went nowhere, just as it has gone nowhere since the WTO was founded. The EU was practically begging to be allowed to end its export subsidies but needed the U.S. to make concessions on its use of export credits and food aid. The U.S. more or less refused, despite some pressure from IATP and other public interest groups that work on food aid before the Ministerial.

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Meanwhile the vexed (and aging) “new issues” of investment, competition and public procurement that developed countries want to negotiate with developing countries edged their way a little closer to the negotiating table, though not much closer. There are lots of truly new issues the WTO could usefully look at. To name just a few, consider the subsidies given to oil and gas industries; the failure to manage price risk and volatility in food commodity markets; and the long-standing, but unaddressed, market distortions created by oligopolies in agricultural input and commodity trading sectors.

But no objective scan of the multilateral institutions today would alight upon the WTO as a place to get anything done. The UN General Assembly has come through with an ambitious agenda of development issues that will absorb developed and developing countries’ attention for the next 15 years with the Sustainable Development Goals, looking at poverty, inequality, vulnerability and more. The UNFCCC has—finally—turned a corner to shift the debate towards what each country will do for itself and just a little away from the obsession with what everyone else is going to do to curtail climate change. By contrast, the WTO membership is petulant; the governments refuse to lead by example, preferring instead to point the finger at other countries who they say are to blame for the lack of progress.

If the WTO is going to do anything at all—and it could do so much—it will only happen when its mandate evolves away from a narrowly defined (and economically questionable) faith in open markets as a panacea for all the world’s ills. There is much open markets can do, and much they cannot. There is a rich debate about the future of the planet and the realization of sustainable development underway. The WTO is so far missing in action.

Sophia Murphy

Sophia Murphy is a senior adviser at the Institute for Agriculture and Trade Policy where her work focuses on agricultural trade rules, U.S. trade and agriculture policy, and the interests of developing countries in the multilateral trade system.

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