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In the lead up to Nairobi, is there hope for global trade governance?

Anabel Gonzalez's picture
 World Trade Organization


The World Bank Group has often argued that delivering outcomes in WTO negotiations around the core issues of the Doha Round is critically important for developing countries. Let’s take one example: with three-quarters of the world’s extreme poor living in rural areas, fulfilling the Doha Round mandate on agriculture could make a real contribution to the Bank Group’s goal of ending extreme poverty by 2030.
 
But recent news reports on global trade talks suggest that WTO Members are finding it hard to develop a shared vision on key issues and are unlikely to deliver significant progress at the upcoming WTO Ministerial Conference in Nairobi from December 15-18. Efforts are being made to produce outcomes on important issues like export competition in agriculture but large gaps remain only one week before the Ministerial Conference.
 
This continued impasse on the Doha Round is indeed a significant missed opportunity, but should this be cause for despair about the future of global trade governance? We don’t think so. There have been developments in the global trade agenda that are worthy of our attention, which should provide some hope in the lead-up to the Nairobi conference that with political will, it is possible to move forward. Here are five of these developments:  
 

  1. Trade Facilitation Agreement:  The legal entry-into-force of the Trade Facilitation Agreement is coming closer, with 53 Members having ratified.  Efforts by the Bank Group and other partners to support implementation are in good shape as illustrated by a recent event at the WTO which showcased the progress made so far on assistance for implementation. To date, the Bank Group alone has worked with 40 countries to help prepare for implementation, and projects are underway in 27 of these to help them meet the standards set by the TFA.
  2. Information Technology Agreement (ITA):  After a breakthrough in July this year, WTO Members will hopefully formalize agreement in Nairobi to further liberalize tariffs on information technology-related goods by expanding the ITA. As a “critical mass” plurilateral agreement, the new tariff reductions, covering $1.3 trillion in trade, would apply to all WTO Members, not just those taking part in the negotiations. Other than giving a much-needed boost to global trade, the expanded ITA could bring significant development gains by reducing the cost of e-commerce and improving access to technology that can profoundly change the development prospects of the world’s poor.
  3. Environmental Goods:  Negotiations on lowering the cost of trade in environmental goods have also been moving ahead, with Members likely to mark this progress and prepare for the next phase at the Nairobi conference. Even a modest outcome would provide potentially important development benefits, supporting the growing South-South trade in environmental technology. It’s also significant that, like the ITA expansion negotiations, both the US and China are participating – a critical relationship for improving the future of global trade governance.
  4. Accessions:  The recent conclusion of WTO accession negotiations by Afghanistan and Liberia – countries facing immense development challenges – is good news for their economic prospects. As colleagues Mona Haddad, Claire Hollweg, and Alberto Portugal showed in a contribution to a recent publication on WTO accessions, joining the WTO has significant positive impacts on trade performance and FDI, while also providing an impetus for wider structural reforms. The accession of these countries is also important for the multilateral system, bringing it closer to universal membership. Along with other partners, the Bank Group is working with both governments on post-accession assistance to help both countries take advantage of the opportunities created by WTO membership.     
  5. LDC Services Waiver:  Significant progress is being made to help Least Developed Countries (LDCs) make the most out the LDC services waiver agreed at the 8th WTO Ministerial in 2011. Nineteen WTO Members have followed through on announcements made in February this year that they would give preferential treatment to service suppliers from LDCs. The formal commitments they have made cut across most sectors and modes of service supply, and have come from a wide range of developed and developing economies. Ministers are expected to decide on the next steps at Nairobi. The World Bank Group is preparing new analysis for LDCs on how to maximize the gains of the waiver, and we hope this will be only the first step toward a wider effort for upgrading LDC services capacity so they can take advantage of market opportunities.

Of course, not all these negotiations and processes are over - each one continues to need strong political will and hard work to bring them to conclusion. The same political will and hard work will be needed to decide on a strategic vision for the future of the WTO and the Doha Round, amid a more complex world of trade governance where the WTO co-exists with the Trans Pacific Partnership, other “mega-regional” agreements, and the wide range of existing regional integration mechanisms.
 
The five developments above signal that progress can be made despite what the headlines read. They also underline the stake that all countries continue to have in the global trade agenda - from small, least-developed countries like Liberia and Afghanistan to the major economies at the center of the ITA expansion and environmental goods negotiations. It’s worth keeping this in mind in the lead-up to – and after – the Nairobi Ministerial Conference, as WTO Members look for new ways in the years ahead to strengthen the multilateral system and its relevance to the global economy.
 

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