Mary Ng, Canada’s International Trade Minister, believes the COVID-19 pandemic has taught the world some lessons about the importance of a well-functioning global trading system. In a couple of weeks, we’ll find out if the rest of the world trade community is prepared to set aside its infighting and act on those lessons.
“We have seen the fragilities of the world trading system during this pandemic, particularly around supply chains,” Ms. Ng said in a telephone interview last week from Geneva, Switzerland, where she attended meetings in preparation for the World Trade Organization’s ministerial conference – its most important gathering of world trade leaders, taking place in the Swiss city from Nov. 30 to Dec. 3.
“All of us have on our minds the importance of economic recovery. For a country like Canada, as a trading nation, it’s really important that we have an institution that really supports a multilateral, rules-based [trade] system. The WTO, of course, is at that core.”
But the WTO, which has overseen the rules governing global trade for the past quarter-century, enters these meetings in a state of paralysis, if not outright crisis.
Its ministerial conferences, which two decades ago attracted the kind of international attention that the just-ended COP26 climate conference received, have become largely fruitless exercises that have underlined the organization’s dysfunctions. It has been unable to nail down meaningful agreements to expand multilateral trade rules into new and emerging areas. Its dispute-settlement functions have ground to a halt, with the United States effectively blocking them.
The Geneva ministerial conference will be the first in four years; normally, they take place roughly every two years, but the original conference, set for June, 2020, in Kazakhstan, was postponed by the COVID-19 pandemic. The conference may prove a critical test for the organization; it’s running out of chances to prove it can remain relevant.
For Canada, a mid-power trading country that has grown to rely pretty heavily on the safety net of rules-based global trade, making the WTO work again is a big deal. Canada has spearheaded the Ottawa Group, a baker’s dozen of like-minded WTO members that has spent the past couple of years working on ways to reform the WTO, particularly the logjams that have formed around adjudicating disputes and negotiating agreements.
But even before tackling those thorny issues, the Ottawa Group will test the waters at the conference table with a proposal that has emerged from the COVID-19 crisis, called the Trade and Health Initiative. The goal is to nail down an agreement on the trade of essential medical goods, to ensure that supply chains remain open and borders unfettered by protectionist barriers in this and future pandemics.
Ms. Ng described Trade and Health as exactly the kind of thing that a rejuvenated WTO should be able to do: spot key global trade problems as they emerge, and adapt its rules framework to address them and protect the global trading system.
She identified Trade and Health as the key priority for Canada at this ministerial conference – indeed, it’s why she went to Geneva last week, to build consensus among WTO members for a deal.
“To have the WTO have a response to the pandemic is really important,” she said. “Yes, I am hoping for a multilateral [agreement]. ... That is what we’re hoping to do.”
Another key test at this ministerial conference will be concluding an agreement to eliminate certain harmful fishery subsidies – a proposal that has reached a make-or-break moment at these meetings. After 20 frustrating years in the works, it’s tantalizingly close, and it’s a win the WTO sorely needs, symbolically if nothing else. It would also demonstrate the WTO’s potential to move beyond tariffs and trade barriers and play a role in environmental protection through trade regulation – something that will be critical over the next few decades.
While there is optimism that the fisheries pact might finally get done, hopes are less sunny about breathing life back into the WTO’s dispute-settlement mechanism at this ministerial conference.
The U.S. administration under Donald Trump – a president who was openly hostile toward the WTO – effectively blocked the WTO from adjudicating cases, by refusing to approve appointments of new judges to the WTO’s appeals body when the terms of previous judges expired. (For nearly two years, the appellate body hasn’t had enough judges to hear cases.)
President Joe Biden’s administration has spoken more positively about its commitment to the WTO and the global trade system, but has continued to block appointments, citing long-standing U.S. concerns over a dispute-settlement process that it insists needs an overhaul.
U.S. Trade Representative Katherine Tai and other Biden administration trade officials have suggested they’d like to find a solution to get the dispute mechanism working again. (Ms. Tai even participated, as an observer, in an Ottawa Group meeting in the summer.) But they have also signalled that they don’t intend to move on this until sometime after the Geneva conference.
“I’ve certainly talked to the USTR about it, and other countries have as well,” Ms. Ng said. “I’m encouraged that the USTR has said that the WTO, and what it does for the world trading system, is important.”
“It’s an area we need to just keep working on,” she said.
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