While some of the major hopes for the 13th Ministerial Conference (MC13) of the World Trade Organization (WTO) – agreements on fishing subsidies and agriculture chief among them – failed to materialise at the event last week, there were achievements on digital trade and electronic transmission tariffs.
With an Institute of Export and International Trade (IOE&IT) delegation in attendance, the IOE&IT Daily Update reported throughout last week on the conference.
Today, we bring you the five biggest stories to emerge from the event in Abu Dhabi.
E-commerce clemency
The major headline, after the conference ran over to Friday (1 March) last week, was the renewal of the E-Commerce Moratorium “by the skin of its teeth”, as the extension was described by the US-based National Foreign Trade Council’s vice president for global trade policy, Tiffany Smith, in conversation with Politico Morning Trade today (4 March).
“It’s a relief to see the E-Commerce Moratorium survive. Its collapse would be a significant blow to the rules-based trading system.”
As we reported last week, the moratorium bans the imposition of duties on electronic transmissions by WTO member nations.
UK business and trade secretary Kemi Badenoch hailed the extension to the moratorium as an achievement of one of the country’s “primary objectives” at the conference last Friday, stating:
“I am pleased the WTO agreed to extend the e-commerce moratorium - a global agreement that avoids taxes on online transactions from e-mails to music or TV downloads, for two more years. The decision will provide businesses of all sizes with the certainty they need to grow and keep costs down for consumers everywhere.
“The UK still firmly believes the WTO should extend the moratorium permanently and will continue to make for the case for that.”
Marco Forgione, IOE&IT director general, said last week that the moratorium is “fundamental” to international digital services trade, something which accounts for a majority of UK exports.
The increasing digitalisation of global trade means that tariff-free transmissions are “essential”, he added.
Digital trade boost
The extension to the E-Commerce Moratorium was not the only achievement on digital trade.
IOE&IT was among those who last week signed the Collaboration Agreement, committing a number of international organisations to the development of the Trade Logistics Information Pipeline (TLIP).
The TLIP aims to cut costs for small firms trading internationally by building a “neutral, inclusive digital infrastructure for trade”, said Forgione.
“With the TLIP framework we expect promising outcomes, including up to 80% cost reduction, processing times cut to one day and a 35% increase in SME efficiency.”
The agreement, also signed by the World Economic Forum and the Tony Blair Institute for Global Change (TBI), builds on earlier trials of the infrastructure in Kenya and the Netherlands.
IFDA boot fits
Badenoch also spoke to praise the signing of the Investment Facilitation for Development Agreement (IFDA) last week. The deal includes commitment from 127 signatories to implement reforms allowing easier access to their countries for investment.
Among the measures promised are reductions in bureaucracy and creation of a “one-stop shop for investors to communicate with the government”, as well as the development of one website containing all the information international investors need for information on a country’s regulations.
Badenoch said:
“If implemented fully, research suggests the [IFDA] could increase global GDP by up to 1% in the long run, with developing countries in particular set to benefit.
“While we’re disappointed the IFDA was not adopted into the WTO’s legal framework, this MC13 is an important step forward and we will keep working to make that happen.”
Dispute difficulties
One major question hanging over MC13 was whether member countries would come to an agreement on solving the WTO’s dispute resolution troubles, as noted by IOE&IT head of trade policy Hemita Bhatti in conversation with the Daily Update before the event.
The dispute settlement system has been a bone of contention for the US, which has blocked the appointment of new judges to the organisation’s Appellate Body. This has left large disputes unresolved.
US trade representative Katherine Tai said last Wednesday (28 February) that the US would not agree to a solution, as reported by Reuters, and one did not materialise.
Deal disappointments
Anticipation for an agreement on agriculture ended in disappointment, with Brazil and India remaining at loggerheads over tariffs. Brazil called for a reduction in duties on agricultural products, while India’s government defended its policy of purchasing its farmers’ food to ensure steady supply and prices, the FT reported.
So strong was Thailand’s objection to Mumbai’s policy, meanwhile, that Indian representatives boycotted a debate where Thai officials said India had driven up grain prices globally.
On fishing, where they had been hopes in some quarters for an agreement limiting government subsidies on fishing to prevent overfishing, there was also no agreement. One EU official told the FT that “there was clearly a lack of a spirit of co-operation” and that “the spirit in the meeting was everyone for themselves, a zero-sum game”.