WTO under pressure amid impasse and growing criticism

WTO under pressure amid impasse and growing criticism

15/12/17

Luke Foddy, Communications Manager

Questions are arising over the future of the World Trade Organization after a three-day ministerial conference ended in discord.

Delegates in Buenos Aires failed to reach agreements on relatively simple e-commerce and agricultural issues, prompting ministers to call for ‘plurilateral arrangements’ to enable progress, Reuters reports.

EU Trade Commissioner Cecilia Malmstrom was cited as saying ‘the meeting laid bare one of the WTO’s biggest deficiencies – that all agreements must have the unanimous consent of all 164 member countries.’

US Trade Representative Robert Lighthizer ‘set an acrimonious tone at the start of the conference, with sharp criticisms of the WTO’, according to The Hindu, which reports that Mr Lighthizer told WTO ministers… ‘that it was impossible to negotiate new rules while many of the current rules were not being followed, and that the WTO was losing its focus and becoming too litigation-focused.’

Mr Lighthizer’s suggestion that current WTO rules are ‘not being followed’ is a clear allusion to China, and a US perception that the WTO is not doing enough to tackle perceived unfair trade practices.

Speaking at an Asia House conference in Hong Kong last month, former US Trade Representative Timothy Stratford questioned whether the WTO’s “tools are adequate” to deal with China, and that he expects the US “to use its own economic leverage to pursue some of the issues, and that to me is code for ‘we’re not going to necessarily focus on whether what we do is WTO consistent or not.’”

That seems to be the case, with Mr Lighthizer calling for ‘like-minded WTO members’ to convene in smaller groups – a departure from WTO tradition.

The impasse comes after the US, EU and Japan issued a joint statement affirming their commitment to tackling unfair trade practices in what the South China Morning Post called ‘a veiled swipe at China.’

‘We, to address this critical concern, agreed to enhance trilateral cooperation in the WTO and in other forums, as appropriate, to eliminate these and other unfair market distorting and protectionist practices by third countries,’ the statement says.

According to Business Today, these developments are the ‘Beginning of the end of WTO’ – a headline that captures the severity of the crises facing the 23-year-old organisation.

The severity isn’t lost on the WTO Director-General Roberto Azevedo, who Bloomberg quote as saying: “The system is not perfect but it is the best we have and we will all — all — deeply regret if we ever lost it.”