Is MC12 the WTO’s Now or Never Moment?
The arrival of Ngozi Okonjo-Iweala as the 7th Director General of the WTO just over a year ago breathed new energy into the global trading body. As the first woman and first African to lead the WTO, her frank admissions that the organization needed to reform and become more relevant were refreshing, and gave hope not just to member states but to the many businesses around the world that rely on a functioning, rules-based global trading system. However, with great hope comes great expectations and the upcoming WTO Ministerial Conference 12 (MC12), during the week of June 13, is the place for the WTO to show it can walk the walk. Here are three main topics we’ll be tracking to determine whether hope is restored or dashed altogether.
Fixing the Appellate Body
Without fixing the Appellate Body, the WTO has lost one of its core functions – namely to hear appeals of the decisions its panels make. Any decision taken can obviously be appealed and countries have tended to use these fulsome processes to ensure all roads and avenues are pursued to either push or defend against a trade challenge from another member or members. For the most part, the Appellate Body becomes the end of the road. Yet because not enough panel judges are in place, the Appellate Body hasn’t been in existence for over two years. This must get fixed without delay, and MC12 is the place to ensure top decision-makers hear this message loud and clear.
Ambitious Outcomes in Agriculture
Agriculture issues – typically among the most sensitive during any trade negotiations are another key area to watch closely. From domestic support, market access and other trade distorting issues to the omni-present need to ensure science-based decisions are at the heart of sanitary and phytosanitary issues, there is never a shortage of issues to discuss let alone resolve. However, many agriculture and agri-food exporters and importers are tired of the lack of action and are saying MC12’s success will largely be determined by the level of ambition achieved in agriculture.
Wider WTO Reform
As Dr. Ngozi recently said, WTO reform is long overdue. She rightly stated that while the WTO remains a “valuable tool for business and governments in this time of pandemic, war and fundamental threats of climate change, (it) must be a reformed WTO and re-imagined and strengthened Multilateral Trading System.” She stated further it must be an institution that is seen as delivering on predictability and fairness, “whilst also addressing modern day challenges.”
She couldn’t be more correct. And while this is music to the ears of members states and trading businesses around the world – many of which have been saying this for years — patience is running thin.
Before the pandemic, a surge of protectionism was ripping through the world.
The pandemic brought renewed calls for “self-sufficiency” which is itself an outdated idea that was replaced with demonstrable progress throughout the world precisely because of free and open trade.
And now the war in Ukraine is creating even more logistics and supply chain challenges that is now affecting prices, food security and wider economic activity.
In a perfect storm of challenges, the WTO needs to show it has a plan to meet the moment. The best place to do so is at MC12. Free traders will be watching.