This week, the Daily Update brings you the latest news from the World Trade Organization’s (WTO) 13th Ministerial Conference. Come back each day to receive updates on talks about everything from e-commerce to digital trade, agriculture to fisheries.
1 March: Negotiations ran over to another day today at MC13, as the WTO extended the conference in a bid to reach agreement on outstanding issues.
Director general Ngozi Okonjo-Iweala called on ministers to "go the extra mile". It follows discussions on the extension of the E-Commerce Moratorium yesterday among 80 WTO members, where Brazil joined India, Indonesia, Pakistan, Sri Lanka, Bangladesh and South Africa in opposing an extension. India is reported to be looking to extract concessions over agriculture by holding up negotiations on the moratorium.
29 February: Indian commerce minister Piyush Goyal said in an interview with the FT, on the sidelines of MC13, that the efforts of countries, such as those in the EU, to incorporate sustainability policies into trade deals are “biased” in favour of wealthier nations.
Green envy?
He argued that the developed world’s insistence on trade deals being designed to combat global warming made for an unlevel playing field because many of those countries had become developed by emitting considerable volumes of greenhouse gas.
Making reference to the Paris Climate Accord’s provisions for a more equitable transition away from fossil fuels, he said:
“All the environmental damage that has been done in the past has still not been made up for. What about that?
“Before we add new environmental issues, let’s first sort out who is responsible for the environmental degradation. Certain promises were made in Paris. They have to be delivered upon.”
He argued that measures such as the EU’s Carbon Border Adjustment Mechanism (CBAM) demonstrated “bias, discrimination and unfairness”, but stopped short of saying whether Delhi’s misgivings would result in a formal complaint to the WTO.
E-commerce
On the subject of the E-Commerce Moratorium, which IOE&IT director general Marco Forgione argued was “fundamental” to international digital services trade earlier this week, Goyal, argued that an end to the moratorium on duties on digital service imports would give space to domestic e-commerce firms to grow.
“I have start-ups. I have technology professionals who are happy to produce domestic technology. I have ecommerce platforms in India. But should I not be supporting them? Is it the right only of a few select big tech companies to do ecommerce?”
Badenoch talks
Bilateral deals are a focus for the UK at MC13, as Kemi Badenoch is today reported by Politico Morning Trade to be meeting with Goyal to try and move along progress on a UK-India trade deal – though Goyal last week described UK and EU negotiators as having a “colonial mindset” in its approach to discussions.
It’s not only India on Badenoch’s agenda. She also met with Mary Ng, Canada’s trade minister, in an effort to extend the UK’s ability to use EU-made parts in its car exports to the country without extra duties.
On the WTO more broadly, Badenoch focused on the need for reform of its dispute resolution body, saying that she wanted to see a “a full and well-functioning dispute settlement system by the end of 2024”.
The UK was blocked by Russia from signing up to the Services Domestic Regulation Joint Initiative, which consists of 70 countries. Signatories have promised not to further restrict access to their markets on services.
Russia argues that the UK needs to leave the EU’s consolidated services schedule to join, which it has yet to do since its exit from the bloc.
28 February: Among the major topics being discussed this week at MC13 is the E-Commerce Moratorium, an international agreement against electronic transmission customs duties that is due to expire at the end of March, if an extension is not agreed. Tariffs have not been imposed on electronic transmissions between nations since 1998.
Negotiations over an extension are set to begin tomorrow (February 29), leaving little time at the conference to achieve a deal. The consequences for the UK’s exports could be stark should it not be agreed – with duties on electronic transmissions likely to affect most services, which make up 72% of the UK’s GDP. New customs duties on those services could affect the UK’s exports.
Countries without trade deals specifically accounting for digital services will need to adjust by striking their own agreements on e-commerce, should the multilateral moratorium lapse.
The director general of the Institute of Export and International Trade (IOE&IT), Marco Forgione, highlighted the importance of reaching an agreement on extending the moratorium:
“There's a lot of concern that some of the larger developing nations are not going to agree to the moratorium continuing, which would then create an unstable and uncertain future with regards to how trade, particularly services but also digital e-commerce, can take place across borders.
“The last time tariffs and taxes were applied to this kind of cross border trade was in 1998 and the digital landscape is unrecognisable from then. To put this into perspective, the moratorium expiring would impact any sharing of data across borders, for example social media apps that allow for the transfer of data.
“It could also be very damaging for manufacturers, engineers and architects sharing technical drawings across the internet, as this is classed as a transfer of data across borders. It will significantly impact not just consumer life but also business-to-business trade.”
Forgione explains that some nations argue the moratorium hits their own domestic technology companies, giving an advantage to established ones in “more advanced nations”. India, Indonesia and South Africa are among those making this case. The OECD, on the other hand, recently published research suggesting that an end to the moratorium would see a drop of 35% in lesser developed countries’ imports and of 3% in their exports.
Forgione says the moratorium is a “fundamental part of the global trading system”, adding:
“With the growing digitalisation of international trade, it will become even more important in the years ahead. There is a growing pressure on the global supply chain and global trading environment and consumer demand for even greater digitalisation and greater use of tech-based solutions for a host of business and personal uses.
“Continuing this moratorium is essential. As the chair of the UK’s E-commerce Trade Commission, I call on all parties to reach agreement on this. I will be pushing hard to ensure these provisions stay in place and that businesses and consumers across the world can benefit from cross-border trade.”
Fishing for agreement
Beyond e-commerce, many at the summit are hoping for an agreement on limiting fishing subsidies. WTO director general, Ngozi Okonjo-Iweala, told ministers it is “crunch time”, and that “members really need to have a good idea on where we are” on issues such as fishing by tomorrow (29 February).
The issue appears the most likely to give rise to an agreement, with Politico reporting that China is considering a compromise arrangement over a potential fishing deal where it relinquishes a claim to “special and differential treatment” as a developing country if other countries agree to banning subsidies on fishing outside their own waters.
27 February: A new Investment Facilitation Development Agreement has been signed by 123 World Trade Organization (WTO) members as part of MC13. The plurilateral agreement aims to ease investment flows while giving special attention to sustainable development in least developed and developing countries.
The UAE has committed to donating US$10m to support developing nations, with $1m on fisheries, as well as $4m to the WTO's Enhanced Integral Framework (EIF). There have also been ongoing discussions around sustainability, with talks on how the WTO can help to achieve a level playing field for different countries working towards net zero.