by: Grow VC Group
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This week marked the kick-off of the 10th Ministerial of the World Trade Organization (WTO), in Nairobi, Kenya. The WTO’s multilateral Doha Round negotiations among the 163 members have been ongoing for over 14 years, with no end in sight. Meanwhile, talks to form free trade agreements such as the Trans-Pacific Partnership (TPP) have been thriving; 40 trade deals have been signed since trade ministers last met in Bali in 2013 and overall 406 bilateral and regional trade deals are now in place. Will Nairobi bring the WTO back at the center of the global trading system?

Started in 2001, the Doha Round is the most ambitious multilateral trade round since global trade rounds were first launched in the wake of the second world war. The Doha Round stalled in 2008, when members disagreed on whether poor countries should be allowed to increase tariffs to shield their farmers if food imports surged sharply. The only meaningful deal to date is the Trade Facilitation Agreement (TFA) inked in Bali. Committing countries to cut red tape and accelerate clearance of goods in customs, TFA is politically much less controversial to than opening up markets in sensitive, protected sectors.

In other words, Nairobi takes place when low-hanging fruit is harvested, and high-hanging fruit still far from reach.

Perhaps the best possible outcome from Nairobi is for the poorest WTO members, those classified as least developed countries (LDCs), to qualify for deeper preferential market access in advanced economies and secure further aid to unlock supply-side constraints to trade. The main roadblocks in other areas are three-fold:

  • First, the WTO has long afforded preferential treatment for developing countries to take on international trade regulations in a more gradual or limited manner.  
  • Second, the WTO’s very work program is contested.
  • Third, with multilateralism delivering precious little, countries around the world have set out to pursue bilateral and regional trade agreements, such as the “mega-regional” trade deals, TPP forged among 12 Pacific rim economies, and the Transatlantic Trade and Investment Partnership (TTIP) between the United States and Europe. 

Companies and leading economies’ focus is today squarely on bilateral, regional, and plurilateral trade deals, not on the multiateral talks at the WTO. In today’s world, the agonized multilateral rounds are moot: rather than big-bang deals at the WTO, world trading powers are likelier to advance toward a multilateral deal from bottom-up, through a gradual expansion and merging of free trade agreements and further negotiations of plurilateral trade deals. How the WTO can remain relevant is by serving as a negotiating and dispute settlement forum for plurilateral, sectoral deals and by seeking to “multilateralize” the best rules agreed in free trade deals among the broader WTO membership. Until it does, companies in the United States and elsewhere look to free trade pacts to go to market around the world. 

Read the whole article and more details about the WTO process at TradeUp Blog.

MC10 WTO Nairobi


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This entry was posted on Thursday, December 17th, 2015 at 6:00 pm and is filed under Business Updates. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.