Two Latin words Buenos and Aires meaning fresh air make the capital of Argentina. The Eleventh Ministerial Conference [MC11] of World Trade Organisation [WTO] will take place from December 10 to December13, 2017 in Buenos Aires.
Argentina is the first country in South America to host this biennial event.
The plenary sessions on December 11 will be the platform for 164 member countries to ventilate their philosophy and roadmap on the future trade landscape.
The Ministerial Conference is generally represented by trade ministers and other senior officials. It is considered to be the highest decision-making body of the WTO. The last Ministerial Conference took place in Nairobi, Kenya in December 2015.
WTO which was established in January 1995 in Geneva, Switzerland is the sole multilateral trade body. It is indeed the descendant of General Agreements of Trade and Tariff [GATT], an ad hoc body to streamline the piled up anomalies in international trade during the Great Depression and subsequent to World War II when trade among countries of the world were just only a few billion dollars. There were several negotiations under the auspices of GATT, the last one popularly known as Uruguay Round. That was the Eighth Round which started in 1986 and continued for long eight years. The culmination of the round resulted in the establishment of WTO. Unlike GATT, the WTO is endowed with a broader mandate such as Trade- Related Intellectual Property Rights [TRIPs], Trade-Related Investment Measures [TRIMs] and General Agreement on Trade in Services [GATS].Moreover the organization enjoys the privilege for settling settlements through Dispute Settlement Body that includes binding procedures. There are committees to monitor the leverages and concessions under these arrangements. The least-developed member countries get more concessions than developed or developing member countries.
Under the auspices of WTO, there were previous ten MCs. Most notable is the Doha Round, the Fourth Ministerial Conference that was held in Doha, Qatar in 2001. The Round, most often quoted as the Doha Development Round considered three important aspects; substantial improvement in market access, phasing out all from of export subsidies and substantial reductions in trade distorting domestic support. Special and differential treatment for developing countries was an integral part of all the elements of the negotiations. Initially, the set deadline of March 31, 2003 for reaching consensus is missed and nothing tangible from the developed world is achieved on the agenda till to date except nominal reconciliation on agricultural subsidies.
Unfortunately, the subsidy issue is like a chameleon that may emerge in a dubious way. It is often delicate to make distinction between export subsidy and domestic subsidy. Moreover, the time elapsed between the very inception and the realities in many developing countries changed the perspective on which LDCs as group were clamouring in 2001. Agricultural subsidy is no more a developed country problem. India in a move endorsed some of its subsidies under the guise of “food security.”
The achievement of the MC10 at Nairobi, Kenya and the aftermath event may be a guide to calibrate the success in Buenos Aires. There was progress on trade facilitation during MC10 at Nairobi when 63 member countries signed the agreement though it required ratification by two-thirds of the member for the pact to materialise. However, on February 22, 2017, the ratifications exceeded the required threshold of 110. This is the first multilateral deal concluded in the 21 year history of the WTO that would have salutary effect on cross border trade all over the world and reduce the cost by 14 percent. There was another milestone to record is second Information Technology Agreement (ITA-II), an agreement among 53 members to lower, on a most-favoured-nation basis on a wide range of technology products. “Historic” Nairobi Package for Africa and the world documents issues that once haunted the previous MCs but there were some consensus on time limit on subsidy removal on the basis of economic standing of member countries. Developed countries committed to remove export subsidies immediately with a few reservations, the time set for developing countries till 2018 though the flexibility to cover marketing and transport costs allow till 2023. There was more leeway for the poorest and food-importing countries on export subsidy and also for Special Safeguard Mechanism (SSM). The rules of origin set a more open paradigm to allow the use of non-originating materials up to 75 per cent of the final value of the product and also simplification of documentary and procedural requirements related to origin.
The MC11 is set in a different world economic context; the United States protectionist postures, the uncertainty associated in the Brexit and pessimism in global economic outlook. The MC11 is important for Bangladesh on many reasons. Bangladesh economy is now open to the extent of over 35 percent. There are recent instances of anti-dumping duties on certain products such as jute goods from India and hydrogen per oxide from both India and Pakistan. There is also no breakthrough in the restoration of General System of Preferences. Another issue is the up gradation of the economy from the LDCs status to DCs status. When Bangladesh graduates it may not enjoy the concessions given to LDCs mainly in the Special and Differential treatments [S&D provisions favouring LDCs]. Bangladesh would face many infrastructural problems in the trade facilitation drive when this is operationalised in the near future. The vessel congestion at the Chittagong port due to siltation, inadequate facilities and low draft at the Mongla port are a serious concern for the various stakeholders.
There is only marginal increase in the share of LDCs in global trade and in global services since the operationalisation of WTO in 1997. LDCs account for about 20 percent of the total population but trade share in trade and services is less than 2 percent. This data when viewed in a macro milieu, only tells a lopsided development in trade related issues. Developed world should consider more open options on duty-free and quota-free access, a conciliatory approach on fisheries subsidies and service negotiations and services waiver for LDCs.
The alloy seldom gets a melting pot when mixed with heterogeneous elements. This is the chemistry of WTO where the interests of many countries are in mutual conflict. The reasons for limited success at the several MCs are the manifestation of incompatible demand of various actors at the different stages of development. However, WTO is the watchdog of many issues related to multilateral trade negotiation and accomplished a few milestones. The expectation that what incremental success the MCs at Bali and Nairobi yielded on various conflicting demands would get a balanced view in MC11 in 2017.
The writer is a Professor of Economics, United International University.