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What went down on day one of MC13: Yesterday marked the opening day of this year’s World Trade Organization’s Ministerial Conference taking place in Abu Dhabi, where more than 150 of the world’s trade ministers are gathering. The biennial event will run until Thursday, with hopes to progress on a number of trade issues ranging from banning fishing subsidies, to maining the ban on digital goods.
A somber start: “If we thought the world looked tough in 2022…then we are in an even tougher place today,” WTO Director General Ngozi Okonjo-Iweala said during her opening speech (watch, runtime: 3:01:39). Okonjo-Iweala highlighted the conflicts in Gaza, Sudan, and the Congo, along with rising food and energy prices, as signs of the increased uncertainty and instability plaguing the global economy today.
Global merchandise trade is experiencing a notable contraction, with trade figures in 2023 likely undershooting the WTO’s earlier forecast of 0.8% growth, according to the WTO chief. The WTO is also working on revising its trade forecast for 2024, with the earlier expectation of 3.3% growth looking “unlikely.”
REMEMBER- The conference is taking place amid rising geopolitical tensions, heightened protectionism, and global disruptions to trade resulting from the wars in Gaza and Ukraine, and even climate change.
Reforms are necessary: Signs of “fragmentation” are beginning to appear in the global economy, Okonjo-Iweala warned. “We need to repair the multilateral trading system, reform it, make it fit for purpose, but don’t take it for granted,” she added.
WTO needs to operate differently, Al Zeyoudi said: “The traditional assumptions on which the WTO has been anchored cannot stand on their own anymore,” Foreign Trade Minister Thani Al Zeyoudi said during the opening session. The foreign trade minister emphasized the need for “new thinking” in light of the change of government priorities and the rapidly evolving environment we live in.
Two new accessions mark MC13’s first celebration: Timor-Leste and Comoros have formally joined the WTO, increasing the total membership to 166 countries. Okonjo-Iweala noted that “22 more countries are seeking to follow in their footsteps,” including a “sizable contingent from the Arab world.”
MAKING PROGRESS-
An agreement on curbing fisheries subsidies is on track to be finalized during the conference, with eight new members accepting the agreement during the conference’s opening, and 70 expected to ratify throughout the week, state news agency Wam reports. “We now have 40 members to go, so the countdown towards full entry into force can start now in earnest,” Okonko-Iweala said.
Background: During the last ministerial conference in 2022, member states reached apreliminary agreement to ban subsidies that promote unsustainable fishing, but left critical issues regarding overcapacity and overfishing unresolved, Reuters previously reported.
“Of all the issues at stake in Abu Dhabi, officials are most hopeful about getting this negotiation over the line,”Politico reports, citing a Geneva-based diplomat. “If there’s no agreement on fish at MC13, that’d be a tragedy.”
THE THORNIER ISSUES-
#1- Removing the ban on the 25-year digital tariff on streaming is high on the agenda.India, South Africa, and Indonesia are advocating for the ban to be lifted, saying it results in significant foregone tax revenues, while other countries are concerned this would open floodgates for a wide range of internet and data tariffs, Politico writes.
#2- As is protecting India’s anti-hunger program: India and a coalition of developing nations are advocating for a standalone permanent waiver to WTO rules restricting domestic agriculture subsidies, particularly on staples like rice, Reuters writes. India insists on a breakthrough or risks stalling progress on all other fronts, Politico wrote.
Developed countries — including the US and Australia — are not supportive of the agriculture subsidy waiver, Bloomberg and Reuters report.
Indian Trade Minister Shri Piyush Goyal has yet to show at the meeting, which has raised concerns among some delegates, though Al Zeyoudi and New Delhi have said the minister will be in attendance today.
#3- The WTO appellate body fiasco: There is potential for progress in Abu Dhabi on the WTO’s dispute settlement body, which has been stagnant since 2019 due to the Trump administration blocking new judge appointments, leaving bns in unresolved trade disputes, Politico writes. However, a final resolution is unlikely before the outcome of the upcoming US presidential elections by year-end.
#4- Expect some discussions on the EU’s green protectionism: Some delegations are accusing the European Union of green protectionism as its carbon border adjustment mechanism — a carbon tariff on imported carbon intensive products — comes into force, Bloomberg reports. “The good news is that it is being discussed and the EU seems willing to engage,” WTO Chief Economist Ralph Ossa told Bloomberg.
