Negotiating rules for free trade in agriculture, industrial products and services have been going on behind the scenes for decades and are not becoming easier. The World Trade Organization (WTO), which is holding a Ministerial Conference in Geneva starting November 30, must ensure that the rules reflect the rise of developing countries, an evolving digital economy, and of course, the Covid-19 pandemic.This content was published on November 23, 2021 - 14:55
Conflicts of interests between the developing and developed worlds, and considering consumer needs as well as the benefits to industry (or drawbacks) make reaching a compromise on new international trade rules difficult. Free trade is not simply a matter of lowering tariffs, increasing imports and exports, and making goods and services cheaper for consumers.
The elimination of subsidies on processed foods in line with a 2015 WTO decision led to a reduction in subsidies for the Swiss chocolate industry of CHF100 million ($108 million) a year. That’s just one example of how a seemingly small change can negatively impact an entire sector.
Historically, there has never been a moment when trade has been as liberalised as it is today, but trade barriers exist. In fact, rules governing trade have not kept up with the pace of change. Therefore, global trade talks must take into account the many divisive issues between developed and developing nations, including the powerful interests that have emerged from the BRIC group of countries like China, India and Brazil.
It takes years just to set an agenda for talks, since a consensus is required among members at WTO. This has led to the paradox that no concrete moves to reform the WTO have been forthcoming, despite the broad recognition of the urgent need for reforms.
The pandemic has thrown a new spanner in the works. World trade stalled and caused a rethink in order to make preparations for similar health crises in the future. A ban on the export of medical products and severe supply chain disruptions exposed just how interdependent countries have become.
New issues of concern gained importance like public health or environment. A controversial proposal to temporarily waive international property rights for Covid vaccines, a ban on subsidies for overfishing, and the trade in plastic have become pressing concerns.
The 12th Ministerial Conference (MC), originally scheduled to take place in Kazakhstan in June 2020, will take place in Geneva for only the fourth time in its history. At the MC, the highest decision-making body of the WTO, ministers from 164 member states are due to meet face-to-face. Can the coronavirus crisis provide a new impetus and contribute to the formulation of new rules for global trade?