EU secures results at WTO ministerial meeting despite disagreements

Valdis Dombrovskis @VDombrovskis

The World Trade Organization’s (WTO) 13th ministerial meeting (MC13) in Abu Dhabi ended on Friday, March 1. The European Commission played an important role in brokering significant outcomes. The EU’s negotiators secured agreements regarding e-commerce, new global services trade regulations, environmental cooperation, and improved developing countries’ position in the global trading system. 

However, the EU had hoped for more ambitious results to revitalise the WTO amid rising geopolitical tensions. Regrettably, even though most WTO members demonstrated willingness, the parties didn’t reach a comprehensive agreement on global fisheries subsidies, agricultural reform, and meaningful progress on dispute settlement.

“At a time of rising geopolitical tensions and political uncertainty, I welcome that MC13 delivered some positive results for the global trading system. The EU led from the front in all these outcomes, working with partners from around the globe. The decision to extend the e-commerce moratorium, in particular, is crucial for digital trade – a key growth area in the global economy and a top priority for the EU,” Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade stated.

“We also made important progress on development and sustainability, to the benefit of all members. However, we were disappointed at the lack of breakthroughs in a number of important areas. The EU engaged intensively to find deals on fisheries subsidies, agriculture package and a dynamic WTO reform agenda. Agreements were within reach, supported by an overwhelming majority of members, but ultimately blocked by a handful of countries – sometimes just one. The EU will continue to actively support work on a more inclusive and fit-for-purpose global trade rulebook and to show leadership and engagement. We hope all our partners will replicate this can-do approach,” Commissioner Dombrovskis added.

E-commerce remains duty-free

WTO members have agreed to extend the “e-commerce moratorium” until MC14, allowing duty-free trade of online services such as apps, games, and software and digitally transmitted content such as music, video, and other digital files. The European Union has invested significant time and political effort in building a coalition to support this extension, which will aid the growth of a thriving global digital services trade. 

The e-commerce moratorium has been in place since 1998, and it is vital for businesses, particularly SMEs, and consumers worldwide as it enables them to engage in electronic commerce and access electronic services more affordably and conveniently. It is also crucial for businesses in developing countries to expand globally. Digital trade already represents nearly a quarter of global trade and will continue to grow significantly. The EU will continue to promote efforts at the WTO to establish a more inclusive, predictable, and rule-based global trading system suited for the digital economy, including seeking a long-term solution for customs duties on electronic transmissions.

The EU has expressed its contentment with introducing new regulations that aim to ease and streamline the process of trading in services. Under these rules, businesses will benefit from straightforward, foreseeable and efficient authorisation procedures in over 71 markets. The EU played a leading role in this initiative, which is expected to foster economic growth for all parties involved in today’s economy’s most extensive and rapidly growing segment.

Integrating developing countries into the global trading system

The European Union played a vital role in achieving positive results to help integrate developing nations more firmly into the global trading system. The members involved in this initiative have recently finalised a deal to facilitate investment and support development in these countries. 

Known as the Agreement on Investment Facilitation for Development (IFD), it aims to utilise the potential of foreign direct investment to boost economic development in poorer countries. The next step will be to integrate this agreement into the WTO rulebook. 

The accession of two new members – Timor Leste and Comoros – to the WTO underscores the importance that countries still place on a shared global rules base for trade and investment. 

Additionally, the ministers have decided to assist the least developed countries as they transition to a higher level of development. Apart from supporting the least developed members, the WTO members have also taken a step towards improving the clear and effective implementation of special and differential treatment for all developing countries, particularly in the standards for market access.

Towards environmental sustainability

MC13 made significant progress in terms of trade’s contribution to environmental sustainability. The conference focused on tackling plastic pollution, phasing out fossil fuels, and promoting the circular economy. The Coalition of Trade Ministers on Climate, led by the European Commission, met to discuss policies on driving decarbonisation. Additionally, ministers from 61 countries adopted voluntary trade-related actions to address the pressing issue of climate change.

No agreements on global fisheries subsidies and industrial policy

During the MC13, a few member countries blocked a comprehensive agreement on global fisheries subsidies. This agreement would have built upon the outcome reached during the 12th Ministerial Conference and the United Nations Sustainable Development Goal 14.6 mandate to ban harmful fisheries subsidies globally.

In collaboration with partners from various development sectors, the EU worked towards finding common ground for a robust agreement to expand the rules that prohibit subsidies contributing to overcapacity and overfishing. However, despite being supported by the EU and most other delegations, there was no agreement to launch deliberations on significant trade challenges such as Trade and Industrial Policy, policy space for industrialisation, and Trade and the environment.

The blockage of this future-oriented agenda by a few countries is a setback that weakens the role of the WTO as a critical forum to address contemporary challenges. Further international cooperation will continue to be necessary to address these issues, and the EU aims to maintain its leadership role in this respect.

No results on agriculture reform

Although the EU and other Members made constructive and pragmatic efforts to find compromises for an agreement, the WTO Members didn’t advance the agriculture reform due to significant and unresolved differences. This failure, unfortunately, disadvantages the most vulnerable countries that rely heavily on the multilateral trading system.

The EU wants a fully functioning dispute settlement system.

During the MC13 conference, the WTO members acknowledged the progress in restoring a fully functioning dispute settlement system by the end of 2024. The EU urged the WTO members to make progress on reforming the dispute settlement system, which is crucial for the legitimacy of the WTO and stopping the erosion of trade rules. It also provides stability for companies to invest and export. However, a solution to a reformed appeal system is still lacking. 

Solidarity with Ukraine

The EU hosted a Solidarity Event in which trade ministers worldwide supported Ukraine. The event commemorated the two years since the start of the full-scale war of aggression by Russia against Ukraine. The WTO Members in attendance remembered the victims of the war and reaffirmed their continued support for Ukraine while calling for the end of the war.

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