WTO: Missing in Action
Sophia Murphy, Institute for Agriculture and Trade Policy (IATP)
The 21st UN Conference on Climate Change (COP 21 ) was held in Paris between 30th November - 11th December and the 10th WTO Ministerial Conference was held in Nairobi from 15th to 19th December. Yet the success obtained within the Paris agreement far outweighs the lack of consensus observed in Nairobi and ultimately, the acknowledgment of the Doha Round’s failure.
Sophia Murphy, in an IATP blog post (extract here1), takes a look at what happened. The final declaration adopted in Nairobi recognizes that some Member States are fully committed to reaching the end of the Doha Round, while others are not and consider that a new approache is necessary in achieving significant results in multilateral negotiations. This means that the “historic” victory mentioned by the WTO at the end of the conference is simply a smoke screen which consecrates, yet again, the sceptisim of the Oranization’s Members with regards the liberalization strategy of world agricultural trade advocated by the WTO.
For Sophia Murphy, the WTO will evolve the day it tackles useful issues, namely the management of price volatility on agricultural commodity markets. And more generally, when it stops considering the liberalization of agricultural markets as the ultimate panacea to current global problems.
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Thus, sadly, in Nairobi, governments had their sights set far, far lower than they had in Paris2. There were a few private interests there, keen to maintain privileges (the U.S. cotton industry, for instance). But they had little to fear, despite the havoc their programs cause for some of the world’s poorest people; the U.S., as perhaps the single most powerful WTO member, was also not there to do anything but blame others for failure, despite their starring role in the drama. Just two days before the Ministerial began, the U.S. Trade Representative published a scathing opinion piece in The Financial Times. More broadly, very few WTO members felt any domestic pressure to get a result in Nairobi and what pressure was evident was all in the name of shutting down debate and closing ranks.
This does not mean the Ministerial was not hard work: as one diplomat said to me, failure takes a lot of work, too. The diplomats met and argued, called impromptu briefings and negotiated not just far into the night during the week, but also apparently felt the need for what has become the customary unscheduled additional day of talks to come up with a final declaration.
And the result? The press coverage goes from elegiac: “WTO Nairobi deals good for all,” Kenya’s The Standard; to damning: “South suffers humiliating setback at Nairobi,” SUNS news service; to the view that the WTO is fading to irrelevance because developing countries cannot “get with the programme”: “Trade talks lead to ‘death of Doha and birth of new WTO’” in The Financial Times. A variation on The Financial Times, appearing in The Guardian, importantly, did not blame developing countries for the result: “Doha is dead. Hopes for fairer global trade shouldn’t die, too.” A sense of civil society organizations’ views can be seen in this story, also in The Standard, which covered the final NGO press conference, “Poor countries walk away empty handed, again.”
Ultimately, the so-called defensive interests prevailed—there will be no new trade liberalization out of Nairobi. It is admittedly hard not to admit to some satisfaction in seeing developed countries commit to the immediate elimination of export subsidies in agriculture (though there are some exceptions that will take time to be phased out). Yet, the push to end other distortions in international agricultural markets went nowhere, just as it has gone nowhere since the WTO was founded. The EU was practically begging to be allowed to end its export subsidies but needed the U.S. to make concessions on its use of export credits and food aid. The U.S. more or less refused, despite some pressure from IATP and other public interest groups that work on food aid before the Ministerial.
Meanwhile the vexed (and aging) “new issues” of investment, competition and public procurement that developed countries want to negotiate with developing countries edged their way a little closer to the negotiating table, though not much closer. There are lots of truly new issues the WTO could usefully look at. To name just a few, consider the subsidies given to oil and gas industries; the failure to manage price risk and volatility in food commodity markets; and the long-standing, but unaddressed, market distortions created by oligopolies in agricultural input and commodity trading sectors.
But no objective scan of the multilateral institutions today would alight upon the WTO as a place to get anything done. The UN General Assembly has come through with an ambitious agenda of development issues that will absorb developed and developing countries’ attention for the next 15 years with the Sustainable Development Goals, looking at poverty, inequality, vulnerability and more. The UNFCCC has—finally—turned a corner to shift the debate towards what each country will do for itself and just a little away from the obsession with what everyone else is going to do to curtail climate change. By contrast, the WTO membership is petulant; the governments refuse to lead by example, preferring instead to point the finger at other countries who they say are to blame for the lack of progress.
If the WTO is going to do anything at all—and it could do so much—it will only happen when its mandate evolves away from a narrowly defined (and economically questionable) faith in open markets as a panacea for all the world’s ills. There is much open markets can do, and much they cannot. There is a rich debate about the future of the planet and the realization of sustainable development underway. The WTO is so far missing in action.
1 The entire article is available from
2 The author evokes the climate conference in Paris (COP 21)