Today (26 February) marks the beginning of the World Trade Organization (WTO) 13th Ministerial Conference in Abu Dhabi, UAE, as officials from around the world meet in what the WTO director general has called “tough” conditions for the global economy and the body she leads.
The Institute of Export & International Trade (IOE&IT) is attending the summit, representing the views of its members and the wider trader community.
Opening speech
Dr Ngozi Okonjo-Iweala, who leads the WTO, has sought to manage expectations around this year’s summit, according to Reuters.
Her opening speech urged delegates to “not pretend that any of this will be easy”, offering a cold-eyed appraisal of the state of international trade.
“We are not in dreamland here. International cooperation is in bad shape. Real success would be [an agreement on] fish, plus two or three things.”
The director general said that she was hopeful a deal could be struck for countries to ban subsidies on fishing, protecting fishermen in countries without state aid from being undercut by those that benefit from it.
Increasing fragmentation of the world’s trade system into protectionist blocs was a theme that featured heavily in Okonjo-Iweala’s speech, but reform of WTO’s appeals court appears to be a distant prospect.
Calling on ministers to “roll up their sleeves” and address the tensions hitting global trade together, she noted that the conditions for trade are notably less hospitable than at the previous ministerial conference in Geneva in 2022.
US-China
A significant cause of these ‘tough’ conditions is heightened tensions between the US and China.
An annual report from the US Trade Representative to the US Congress published last week found that China has continued “to pursue a state-led, non-market approach to the economy and trade”, with policies that “can have a tremendous impact on bilateral and global trade”.
This approach “undermines fair, market-oriented decisions and distorts market outcomes in significant ways”, it suggested. Despite China’s WTO membership, the report said China poses “a unique challenge for the global trading community” as “foreign enterprises are competing not only against Chinese enterprises but also the Chinese state”.
The US could take its own turn away from WTO rules if Donald Trump is elected as president for a second time this year, having proposed a 10% tariff on all countries in violation of WTO rules, with the possibility of even more stringent restrictions on trade with China.
Rufus Yerxa, the WTO’s deputy director from 2005 to 2013, told Politico that this possibility made progress at events like MC13 particularly difficult.
“Why would people make a deal with us now on key WTO issues if they don’t even know whether the next administration will accept the deals?” the American asked.
“You could put the world’s greatest matchmaker, arbiter and negotiator in charge of the WTO right now and I don’t think much could happen,” he added.
IOE&IT in attendance
The IOE&IT delegation at the conference includes head of trade policy Hemita Bhatti and director general Marco Forgione.
Last week, Bhatti spoke to the Daily Update to note that, while there was likely to be difficulty in reaching sweeping agreements, there could be progress on issues such as extending the e-commerce moratorium that prevents taxes on online transactions.
The Daily Update will be reporting on developments at the conference every day this week, as negotiations continue over e-commerce and other policy areas.
Removing barriers
The UK government has said today that it is seeking an extension of the moratorium as a priority to “keep the costs of online trade down”.
Business and trade secretary Kemi Badenoch, who is also at the event, said:
“We want to see more barriers torn down, not new ones being put up.
“This is why it’s important the UK is here at MC13, to secure meaningful outcomes for companies and consumers back home and around the world as part of the government’s plan to grow the economy and boost opportunities for our young people. I look forward to working with members this week to make that happen.”