WTO Update: Onto life support

  • Date Added: 8th August 2011 from ExportNZ

  • It seems that all hope for salvaging something from the WTO Doha Development Agenda negotiations in 2011 has now faded. WTO Director-General Pascal Lamy admitted this to the WTO Trade Negotiations Committee.

    Hope of concluding the negotiations any time soon has long been accepted as unrealistic, but work had been underway on a package of measures such as an announcement of duty free access for the world’s poorest countries, an agreement on disciplines on fish subsidies and some other matters. It is now clear now any deal this year is just not possible, reflecting the lack of interest from the US (and maybe some others) in any such package (essentially anything not obviously of benefit to the US economy has zero change of being supported by Congress).

    This development suggests that the WTO negotiations as they now stand will be placed into the freezer, to be thawed off at some point in future when conditions are better. Such conditions are not likely until 2013 at the earliest (post US elections). The selection of the next WTO Director-General will also be critical to this process of re-launch. That decision is also not due until 2013.

    Does this mean that the WTO is dead?

    The answer is no. The WTO will continue to monitor adherence to the General Agreement on Tariffs and Trade (GATT) and the General Agreement on Trade in Services (GATS), both of which are contracts which WTO members are party to. The WTO will over the next two years be a forum for the resolution of disputes between members. The formal dispute settlement mechanism (which New Zealand used to resolve the dispute with Australia) will continue.

    The question many of us have is whether the loss of credibility on the trade negotiations side will impact the credibility of the dispute settlement mechanism. Some see no impact. Others worry that over time there will be inevitable impact. This will be one of the reasons for an attempted re-launch of negotiations at some stage in the future.