GENEVA – World Trade Organization’s Director-General Ngozi Okonjo-Iweala says she is “excited” about the upcoming 13th ministerial conference to be held in the United Arab Emirates in February 2024, while acknowledging that the “road” to MC13 is “full of “potholes.”
Giving an upbeat assessment at the WTO’s annual Public Forum yesterday, the DG said she is confident that like the MC12, which delivered significant outcomes last year, the MC13 needs to deliver on a range of issues.
The meeting, perhaps for the first time in the history of the public forums until now, was convened by the chair of the WTO’s General Council Athaliah Lesiba Molokomme of Botswana. Although the GC chair is more powerful than the WTO DG, according to the rules and conventions, it is somewhat unusual to witness her acting as a moderator, said people familiar with the discussion.
Priority Issues
In three rounds of quick-fire observations on the theme of “Conversations, Global Economy and Climate Nexus,” the DG’s observations on a range of issues, including that the plurilateral Government Procurement Agreement can be used to further green procurement by members seemed somewhat inconsistent with rules, as members who are not party to the GPA are required to pay a huge price to enter the GPA, people said.
Coming back to the DG’s list of issues/priorities for the MC13, Ms. Okonjo-Iweala said WTO reform is very, very important.” She praised the trade envoys to the WTO for their engagement in discussions on “reforms by doing” that involve several procedural issues.
“We have other big reform” involving how to institutionalize the “deliberative” function”, wherein issues like trade and climate change discussion can be discussed, she said.
The EU is the mover of discussions on the deliberative function, despite sharp concerns about approaching issues without a proper General Council/ministerial mandate, said a person familiar with the discussion.
The DG went on to ask somewhat rhetorically “How do we talk about carbonization” and “carbon pricing”, in which the EU is again the chief mover and shaker. The EU’s carbon border adjustment measures and measures targeted at deforestation are likely to come into force next year. The DG, however, maintained that at the just-concluded G20 leaders meeting, EU President Ursula Gertrud von der Leyen was cautioned about unilateral measures like the carbon border adjustment mechanism.
Speaking on the unfulfilled mandates of the Doha Development Agenda on Development, the DG mentioned the graduation of the least-developed countries. She asked “How do we deal with G90” proposals to make special and differential treatment simple and effective in the ten WTO-agreement specific proposals.
As reported in WTD, the ten-agreement-specific proposals faced rough weather for a considerably long time due to opposition from major industrialized countries, including the United States.
She also mentioned agriculture somewhat fleetingly, suggesting that this is an important issue.
The DG highlighted the importance of concluding the fisheries subsidies agreement, which underscored the need for an early ratification of the partial fisheries subsidies agreement reached at MC12.
She mentioned “industrial subsidies”, a topic that is at the core of the Group of Seven industrialized countries and primarily aimed at China.
The need for enhancing inclusiveness is another major deliverable for increasing the presence of women in the global trade, she suggested.
Proposed Deliverables
During the discussion on “Conversation on Trade, Global Economy and Climate Nexus,” moderated by the GC Chair Molokomme, the DG took the lion’s share in replying to questions about proposed deliverables for the MC13.
As part of her 21st trade agenda, Ms. Okonjo-Iweala highlighted digital trade. She mentioned the e-commerce moratorium which prohibits WTO members from imposing customs duties on electronic transmissions. The moratorium will end at MC13 unless there is consensus on its continuation.
Other areas for MC13, according to the DG, include working on plurilateral initiatives such as “trade and investment” that has been negotiated by 110 countries. She also mentioned the service's domestic regulation agreement, which is yet to be approved by India and South Africa among others.
In the run-up to the MC12, the DG said if three or four issues are agreed then it would be a great success. She repeated the same slogan for the MC 13, saying if three or four issues are adopted at the MC13 then it would be a big victory.
Trade Fragmentation
At the same time, in her opening remarks, the DG presented a downbeat picture of the prevailing trends that indicate the growing fragmentation of the multilateral trading system. She pointed to geopolitical tensions between the United States and China, Russia’s war against Ukraine and North and South tensions.
Ms. Okonjo-Iweala said the biggest tension at this juncture is the one between the United States and China. “ I do think that these geopolitical tensions have an impact on the shaping of the trade.” She said these tensions – leading to reshoring, friend-shoring and changes in the supply chains as they are configured before the crisis – are yet to severely impact the global trade.
The second major trend is growing digitization. Ms. Okonjo-Iweala maintained that “digital is the future,” adding that digitally-delivered services growth at 8 percent percent is more than trade in goods and trade in services. She said digital trade currently contributes $4 trillion out of total global trade of $31 trillion. The DG pointed out that digital trade can enhance the participation of women in global trade and also help micro, small and medium enterprises.
With the seemingly avowed agenda of giving primacy to trade and climate actions at the WTO, the DG emphasized the importance of pursuing a sustainable trade agenda. She argued that trade is a central component in the drive towards net zero by 2050. The movement of green technologies and green goods is made possible through trade, she said, stressing that “you cannot decarbonize without trade and that is the first thing.”
Trade agreements made at the WTO can play a critical role, the DG said, suggesting that the government procurement agreement is aimed at bringing good governance and procurement of goods. The DG maintained that the GPA which is estimated at $13 trillion can play an important role in “green procurement.” The DG also highlighted the positive role of the trade facilitation agreement.
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