WTO's 13th Ministerial Conference: A contrasting story of success and drawbacks 

In a whirlwind of negotiations and high stakes agreements, the World Trade Organization’s 13th Ministerial Conference (MC13) drew to a close on 2 March. It achieved a few successes and some disappointments in its wake.   

Although the WTO didn’t achieve all it set out to, it must continue to provide the platform for international trade negotiations to take place. It is important that it continues dialogue beyond MC13 to address protectionist trade policies and tackle the modern-day global challenges, whether they be geopolitical or climate-related, that disrupts international trade and impacts the daily operations of businesses that export and import to and from international markets. 

What did MC13 achieve that could be useful for businesses?  

A key win is the extension of the moratorium on e-commerce for the next two years, which provides businesses using digital services some relief from rising trade barriers, particularly in countries lacking e-commerce provisions in existing trade agreements.  

While viewed by some as merely maintaining the status quo, the extension offers vital opportunities for growth by keeping digitally delivered trade tariff-free. This benefits small businesses and consumers, particularly in developing nations, ensuring continued access to innovative and affordable electronic services. However, the temporary nature of this win raises concerns about future extensions, highlighting the need for significant advancements at the WTO in the next two years to avoid similar situations at MC14. 

Practical benefits for businesses include:  

 

Another significant achievement was the establishment of a plurilateral agreement on the joint initiative on services domestic regulation (JISDR) that aims to lower annual trade costs of about $150bn. New and clear rules to simplify trade in services have been adopted by 72 member countries, which represent 92% of global services business, including China, the EU and the US.  

These benefits include easing licensing and qualification requirements for service providers, which will be adopted on a most favoured nation (MFN) basis which will benefit even non-signatories, including India, Indonesia and South Africa.  

Practical benefits for businesses include:   

 

The conference saw 123 members finalise another MFN-based plurilateral agreement that aims to drive FDI in developing and least-developed countries, by streamlining investment procedures, enhancing transparency and thus increasing FDI by creating a more conducive environment for investment, particularly for developing countries. The agreement includes 87 developing economies, including 25 LDCs. A study done on the potential economic effects of the IFD agreement expects global welfare gains to range between 0.63% and 1.73%.  

Practical benefits for businesses:   

 

There was a greater focus given to sustainability at MC13, with the launch of several plurilateral initiatives aimed at addressing pressing environmental challenges. From combating plastics pollution to promoting environmentally sustainable trade practices and advocating for fossil fuel subsidy reform, these initiatives demonstrate a collective commitment to putting the environment as a priority in trade negotiations. Although these plurilateral groups mostly presented their work plans for future years, it was the first time that the environment was included in a ministerial conversation.  

Where did MC13 fall short?  

The WTO is faced with an existential crisis in the wake of geopolitical instability and the rise in protectionism across the world. The very function of the WTO as an effective mechanism to govern the international trading rules and regulations and act as an arbitrator in international disputes has come under question. Whilst the MC13 managed to get the key e-commerce moratorium over the line, cracks in the system have been highlighted by the key negotiations on fisheries and agriculture. Some progress was made on the complex dispute settlement mechanism negotiations but agreement on what the reforms would look like requires a longer-term resolution.  A decision was made to continue work on unresolved issues, including an appeals mechanism, and to achieve a full functioning dispute settlement system accessible to all members by 2024. 

What does this mean? 

Two main objectives were set for fisheries at MC13: entry into force of the Fisheries Subsidies Agreement, and a second wave of negotiations that would build upon this initial agreement.  

Firstly, the Fisheries Subsidies Agreement, agreed in 2022, did not reach the agreement of two-thirds of members required for it to enter into force. And the conference also failed to find landing zones in the increased commitments to reduce fisheries subsidies. This represented a missed opportunity to get the first ever WTO agreement on sustainability over the line which would tackle a critical issue affecting marine ecosystems and global food security.   

In the UK, a third (34%) of UKs population of fish are being overfished and only 45% are being sustainably fished. The agreement could have promoted sustainable fishing practices which would benefit the UK by enhancing the health of its fish stocks and creating a fairer environment for UK fishermen, levelling the playing field with countries that subsidise unsustainable practices. Whilst the removal of subsidies could be an additional expense to some, the net long-term benefit would have been conservation and increasing fish stocks back to a healthy level. 

Agriculture has always been a contentious issue in WTO negotiations and that did not change at MC13 either. Despite advancement on Agri talks ahead of MC13, members were unable to reach agriculture reform in Abu Dhabi. Disagreements on public stockholdings (PSH) and export restrictions hindered meaningful progress, highlighting the persistent challenges in this area.  

Some countries like India, argue that the PSH are necessary for their domestic food security, while others are concerned that if they are used as a support for producer’s prices it could serve as a negative trade-distorting measure. Agri is continuously a hard issue to negotiate at the WTO; hopefully, there will be more productive outcomes toward MC14.  

The effectiveness of the WTO's dispute settlement mechanism continues to be under scrutiny. Uncertainties surrounding dispute resolution procedures and the enforcement of rulings remain unresolved post-MC13, casting doubt on the organisation's ability to effectively address trade disputes among member states. Among the outcomes, WTO members advanced on issues of reestablishing a fully functioning dispute settlement system by the end of 2024. 

While certain achievements signal progress towards a more inclusive, sustainable, and rules-based global trading system, persistent challenges underscore the need for continued dialogue, cooperation, and reform within the organisation.  

As the world navigates an increasingly interconnected and uncertain economic landscape, the WTO's role in shaping the future of global trade has never been more vital or more scrutinised.