Caribbean Trade Law and Development

Tag: WTO

  • Urgent WTO reform needed, says G20 Trade and Investment ministers

    Urgent WTO reform needed, says G20 Trade and Investment ministers

    Alicia Nicholls

    Trade and investment ministers of the world’s twenty leading industrialised economies (G20) have called for urgent reform of the World Trade Organisation (WTO) to ensure its ability to “face current and future challenges”. This is according to the Ministerial Statement released following the G20 Trade and Investment Ministerial Meeting held on September 14, 2018 in Mar del Plata, Argentina.

    The 164-member WTO serves not just as the only multilateral forum for the negotiation of global trading rules, but is a forum for the orderly and peaceful resolution of trade disputes amongst WTO member countries. While the Ministerial Statement does not detail what specific reforms the G20 Ministers deem necessary, it implores all G20 member countries and other interested parties to explore ideas to safeguard the continued relevancy of the multilateral trade governance organisation. G20 member countries have also ‘stepped up’ dialogue on current international trade developments.

    The statement comes in the wake of increased threats to the multilateral rules-based trading system. The most recent are the current escalating trade tensions between the US and China manifested in the imposition of billions of dollars’ worth of tariffs on goods by both sides. It also comes  amidst new threats by United States’ President, Donald Trump, to withdraw the US from the WTO, which he perceives to be inherently biased towards the US. This is, despite independent research showing that the US, which is the most litigious of the WTO member countries, wins about 91% of the trade disputes in which it was the complainant, and 89% of cases as respondent. Despite this positive track record, the Trump administration continues to block Appellate Body judge selections, which threatens to grind the WTO’s once vaunted dispute settlement body system to a halt.

    Concerns about the relevance of the WTO predate the Trump administration, with a major concern being the WTO’s consensus-based decision making model which requires agreement by all member countries for progress to be made. Out of frustration with the slow pace of the Doha negotiations and the refusal to include new emerging issues into negotiations, there was a marked shift in the US focus during the Obama Administration from the now defunct Doha Development Round negotiations towards the negotiation of mega regional trade agreements. However, the Trump administration marks the first time a US administration has openly threatened to withdraw from the WTO, an organisation it was instrumental in pushing for and forming.

    One positive aspect to the Trump administration’s anti-WTO stance and actions is that they have given new urgency to the need to reform the WTO to secure its relevance, efficiency and effectiveness for all members, including small vulnerable economies (SVEs). SVEs account for only a tiny fraction of world trade, but generally have high levels of trade openness and a narrow range of exports and export partners. As such, any unfair trade practices by one of their major trading partners which prejudices an SVE’s exports, could have a deleterious impact on its economy and development prospects.

    Despite the problems inherent with the consensus-based decision making model, the removal of such a system would likely undermine the WTO’s legitimacy and disenfranchise less powerful member countries, such as SVEs. The WTO is of particular importance to SVEs because it is one international organisation in which they have equal voice, and because, at least in theory, it provides a mechanism for small States to hold hegemons to account when they engage in unfair trade practices. This, however, has not always been the case. For instance, Antigua & Barbuda’s inability to receive compensation from the United States following the rulings in the US-Antigua Gambling case is the most glaring example of how power asymmetries affect small States’ ability to hold powerful States to account, even where rulings have been made in their favour.

    There have been numerous calls for reform of the WTO over the years, as well as several studies, including this one by Bertelsmann Stiftung, which have posited recommendations. Encouragingly, current Director General of the WTO has expressed support and willingness for reform of the organisation, noting that some countries have already begun talks. It is hoped that CARICOM countries, as well as other SVEs, will demand a voice in these discussions and offer their ideas for reforming the WTO to ensure it meets their needs. The presence of CARICOM at the G20 Trade and Investment Ministers meeting, represented by Jamaica, is a good start.

    Despite the WTO’s shortcomings, the fact that non-Members continue to pursue accession to the WTO show that countries generally still see value in the organisation.

    In essence, the G20 Statement shows support in principle, at least from a majority of the world’s largest economies, for the continuation of the rules-based multilateral trading system which the WTO affords and states commitment towards making the reform of the WTO an urgent priority. Now these words must be translated into action.

    The full G20 Trade and Investment Ministers’ Ministerial Statement may be read here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • WTO: Trade tensions could sabotage global trade growth momentum

    WTO: Trade tensions could sabotage global trade growth momentum

    Alicia Nicholls

    The World Trade Organisation (WTO) has predicted that global merchandise trade growth will remain strong in 2018 and 2019, but has cautioned that this momentum is contingent on the policy choices taken by governments.

    This forecast was disclosed by WTO Director General, Roberto Azevedo, in a press conference held last week. According to Mr. Azevedo, global merchandise trade grew an estimated 4.7% in 2017 and is forecast by WTO economists to grow 4.4% in 2018 and by a more modest, 4.0% in 2019.

    He noted that trade volume growth in 2017 was the most robust since 2011, with Asia being responsible for much of the recovery. He noted that South and Central America and the Caribbean made a positive contribution for the first time since 2013 due to Brazil’s economic recovery. The ratio of trade growth to GDP growth will be slightly lower in 2018 at 1.4 in 2018, down from 1.5 in 2017. Commercial services trade experienced strong growth in 2017 after two years of lacklustre growth.

    The escalating global trade tensions, particularly between the US and China, cast a shadow over the forecast, as Director-General Azevedo strongly cautioned that continued positive trade growth could be “quickly undermined” if Governments turned to trade restrictive policies and engaged in retaliation. Mr. Azevedo pointedly stated that “a cycle of trade retaliation is the last thing the world economy needs”, noting that trade tensions may already be impacting business confidence and investment decisions. He further warned that missteps on trade and monetary policy “could undermine economic growth and confidence”.

    In an appeal to WTO Member States to resort to the rules-based system as opposed to unilateral action, Mr. Azevedo added that “pressing trade problems confronting WTO Members is best tackled through collective action”.

    The full WTO press release may be viewed here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

     

  • Barbados ratifies WTO Trade Facilitation Agreement

    Barbados ratifies WTO Trade Facilitation Agreement

    Alicia Nicholls

    On January 31, 2018, Barbados became the 130th World Trade Organisation (WTO) member to ratify the WTO’s Trade Facilitation Agreement.

    According to the press release from the Barbados Government Information Service (GIS), “the instrument of ratification was formally handed over by Ambassador to the United Nations and Other International Organisations, Bentley Gibbs, to Secretary General of  the WTO, Robert Azevedo, in Geneva, Switzerland”.

    The Trade Facilitation Agreement came out of the WTO’s Bali Ministerial in 2013 and entered into force in February 22, 2017 after two-thirds of the WTO’s membership ratified the Agreement. It aims to expedite the movement, release and clearance of goods across borders by reducing red tape, improving transparency and facilitating cooperation among customs authorities.

    The benefits of these provisions, once implemented, include reducing trade costs for businesses, increasing participation in global value chains and improving trade flows. Ratification of the Agreement is, therefore, an important signal to investors of a country’s commitment to improving its business environment for trade.

    In keeping with the principle of Special and Differential Treatment, there are implementation flexibilities in Section II for developing and least developed countries, recognising they may need more time to implement the provisions of the Agreement. Like other developing and least developed countries, Barbados has access to the Trade Facilitation Agreement Facility which provides assistance for notification, capacity-building support and grants.

    The following other Member States of the Caribbean Community (CARICOM) have already ratified the Trade Facilitation Agreement: Trinidad & Tobago, Belize, Guyana, Grenada  and St. Lucia (2015), Jamaica and St. Kitts & Nevis  (2016), St. Vincent and the Grenadines, the Dominican Republic and Antigua & Barbuda (2017).

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is an international trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.

  • ACP Trade Ministers demand ‘concrete outcomes’ at upcoming WTO MC11

    ACP Trade Ministers demand ‘concrete outcomes’ at upcoming WTO MC11

    Alicia Nicholls

    Trade ministers and other representatives from the 79-member Africa, Caribbean and Pacific (ACP) countries added their voices to demands for ‘concrete outcomes’ at the upcoming World Trade Organisation’s Eleventh Ministerial Conference (WTO MC11). Preparations for the upcoming WTO MC11 was one of several topics discussed by ACP trade representatives at their 20th ACP Ministerial Trade Committee meeting held in Brussels on 18-19 October last week.

    According to the press release from the meeting, the ACP representatives  reiterated the need for a development-friendly and robust MC11 work programme which recognized differences between developed, developing and least developed countries and whose outcomes were aligned with the Sustainable Development Goals (SDGs).

    Reaffirming their commitment to the multilateral trading system, they also called for “inclusiveness, consensus and transparency in all WTO decision-making processes, as well as careful framing of any reform evaluation of the WTO to ensure that the interests of all countries are protected”. Guyana was chosen to be the spokesperson for the ACP Group at the Ministerial which will take place in Buenos Aires December 10-13, 2017.

    In a speech delivered at the ACP meeting, the WTO’s Director General, Roberto Azevedo, acknowledged the important role ACP countries have played in shaping the WTO’s work.

    Mr. Azevedo gave a brief status report on the WTO’s preparatory work for the upcoming Ministerial Conference, lauding the ACP countries for being at the “forefront” of these discussions. He noted that although there were some positive signs, the many gaps to bridge meant that there was still much work ahead with respect to the negotiations.  He further reiterated that in order to achieve concrete results in Buenos Aires, “more focused engagement and negotiation will be required to quickly identify areas of convergence”.

    In the meeting which was chaired by the Hon. Carl Greenidge, Vice President and Minister of Foreign Affairs of the Cooperative Republic of Guyana, ACP trade representatives also focused on several  other topics of importance to ACP countries’ trade, including enhancing trade among ACP countries and trade issues with the European Union (EU).

    The ACP press release also notes that ACP representatives have committed to “increased integration, unity and solidarity” among ACP countries, including taking more “joint ACP approaches to trade and development”.

    The press release from the ACP can be read here.

    The WTO Director-General’s full speech can be read here.

    Alicia Nicholls, B.Sc., M.Sc., LL.B., is a trade and development consultant with a keen interest in sustainable development, international law and trade. You can also read more of her commentaries and follow her on Twitter @LicyLaw.