The WTO Ministerial Conference's qualified success in Abu Dhabi

Shadowed by doubts about its leadership and ability to function, the World Trade Organization's (WTO) recent 13th ministerial conference (MC13) did what was essential. Many key pro-trade, pro-multilateralism senior diplomats believed that the best that could be hoped for from this ministerial would be just holding the line against backsliding. It did, and a bit more, and that is a good thing.

The most important positive result in Abu Dhabi, where the conference took place, was that there was no backsliding toward increased import protection. An end to the moratorium banning the imposition of customs duties on ecommerce would have been harmful to the image and reality of the WTO. The result: The ban was extended for another two years.

A reasonable claim of progress could be based on the formalization of the Agreement on Services Domestic Regulation. A single member could—and at least one, India, did—try to block members from certifying their commitments to improving the procedures governing those seeking to supply services to their markets; India, however, did relent. This consensus-based organization must become a home for new plurilateral agreements, joined in at the outset by those ready to do so.

The 164 countries meeting in the Gulf also reached an agreed outcome document, which had only a 50 percent probability of happening. The ministerial extended an extra day and ran until midnight on March 1, but it managed to restate members' commitment to multilateralism—an implicit pledge to support an open and rules-based global system.

The members should be given the benefit of the doubt that they mostly believe what they are saying, even if their conduct may too often belie this protestation. It is reassuring that 75 percent of world trade in goods continues to flow under the WTO's rules.

This show of solidarity occurred despite rampant geopolitical divisions (e.g., US-China); warfare between members (Russia's invasion of Ukraine), with members split among supporters on either side and those who do not wish involvement; renewed conflict in the Middle East; and the widening fractures over the issues of inequality, nationalism, populism, and increasing xenophobia.

As noted in an earlier blog post, all members celebrated the fact that Timor Leste and Comoros, two extremely small countries, completed their accession requirements, clearing the way for their joining the community of trading nations. This was itself a show of a continuing general commitment to the global trading system. Now there will be 166 members—and there are an additional 22 countries seeking to accede, including several in conflict regions for whom pursuing integration into the global economy means a chance for enhanced economic stability and peace.

The negatives

For all these positive developments, there were plenty of negative developments in Abu Dhabi.

Fisheries – Part I of the Fisheries Subsidies Agreement remained far from coming into force, ratified by only 71 of the needed 110 members. Part II (the remaining important provisions governing supportive subsidies, such as for fuel) could not be concluded with two very large members (India and China) seeking major exemptions from the agreement. Ocean fish stocks continue to be depleted through illegal, unregulated, and unreported fishing.

Agriculture – There is still no agreement to proceed to negotiations despite a 30-year-old unfulfilled pledge to do so. The situation is likely to deteriorate further as climate change and extreme weather events increase food insecurity, with the WTO having virtually no rules governing the sharing of food between haves and have nots.

Dispute settlement – Agreement on a single, binding dispute settlement system remains distant. A package of some important clean-up amendments is moving toward consensus, but the core issues remain completely unsettled: having binding outcomes to dispute settlement, determining how to deal with member decisions of national security, and deciding whether there is to be an appellate level.

The attempt to end the fraud of filing appeals "into the void" to the nonexistent, probably never to be seen again Appellate Body was blocked reportedly by the United States and perhaps a few others.

A 2024 pledge to find a solution to this problem gives little comfort. It refers to "our commitment made … to conduct discussions with a view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024," but it commits to discussion (not yet held on the core issues) and "accessibility." To have access is not the same as a commitment to all agreeing to be subject to a single binding system.

Future agreements – The Agreement on Investment Facilitation for Development has been concluded by all those who wished to join it and is open to all others who wish to. It is backed by over 100 countries, most of them developing and many least developed. It is an agreement to streamline procedures and has no market access obligations or constraints. It benefits nonsignatories and signatories alike.

However, India and South Africa take the position that the negotiation itself was not approved by the full membership and it cannot be concluded as a WTO agreement. They therefore reportedly blocked the recognition of this agreement at this ministerial conference. The tyranny of the nonparticipant veto taken without the member asserting it having an essential interest at stake must end. Singapore has proposed, sensibly, that any veto be exercised responsibly. This proposal, at a minimum, should be adopted if the WTO is to engage in rulemaking as a practical matter.

The outlook for 2026

The next WTO ministerial will take place in 2026. It is too early to tell if any progress will be made by then. This is a year of pivotal elections in the United States.

A forecast of a Biden second term cannot specify in concrete terms whether its trade policy envisions working for global rules. Would the United States again invest in the WTO to improve the liberal international trading system that it largely created? A second Trump administration promises bilateral balancing to be achieved by an aggressive use of additional tariffs, with no indication of seeking any further international cooperation.

The European Union has tried to supply needed heft, working with some "middle grounders," or mid-sized countries. This approach has not yet filled the need to drive progress. China, the largest trading nation, has not stepped forward to play this role, which would require it to invest more in the system. A sample contribution would be to subject itself to the fisheries subsidies disciplines without any exemption.

The world trading agenda may ultimately be driven by the need for the trading system to come to grips with unilateral measures, such as export restrictions, increased tariffs, or subsidies, each measure now increasingly justified on grounds of national security, economic security, or climate concerns.