Towards a new global trade regime: reform of the WTO
Bruegel Annual Meetings, Day 2 - the World Trade Organisation has been going through trying times, a phenomenon amplified by the pandemic. Why are we headed towards a new global trade regime? And what lies ahead for the WTO?
VIDEO AND AUDIO RECORDINGS
Since she took office, the World Trade Organisation’s new Director-General operated amidst a pandemic. What challenges did the WTO face in this tumultuous geopolitical environment? And how did its Director plan to face them?
Bruegel’s Director Guntram Wolff sat with the Director-General of the WTO Ngozi Okonjo-Iweala to discuss the present debates around Global trade and possible reforms of the World Trade Organisation.
by Pauline Weil
To Ngozi Okonjo-Iweala, the original design of the WTO, ie a value-based organisation meant to serve people, was forgotten. Global trade should contribute to net zero emissions and inclusion. The WTO’s main challenge is to support the preservation of commons.
Inequity in access to vaccines: what needs to be done?
- 12-15bn doses are needed while annual production used to be 6bn. The WTO brings manufacturers together in an upcoming meeting to solve supply chain bottlenecks and to push for production deconcentration through investments in Africa and South America.
- Command rich countries to export more.
- She anticipates a Trade-Related Aspects of Intellectual Property Rights (TRIP) agreement by July.
The WTO should contribute to tackling climate change
- The WTO is to push for removal of subsidies in fishing and eventually in agriculture.
- Push for a coordinated approach to carbon pricing. Having 68 fragmented carbon pricing systems is not optimal.
- Although CBAM details are not yet revealed, on principle, it appears to contribute to further fragmentation. it also generates concerns from developing countries calling in the principle of differentiated responsibilities.
Expectations for the upcoming Ministerial Conference (MC 12)
- Delivering is important given the reputational costs of past failed negotiations rounds.
- She foresees three negotiations concluded at the MC 12:
- Ending fishing subsidies;
- Vaccine scarcity (supply bottlenecks, address export restrictions, vaccine IP debate);
- Agriculture package.
- Other outstanding issues that may or may not be resolved at MC 12 include:
- Building a common understanding of the needed reforms for dispute settlements.
- Services trade deal, including e-commerce.
- Advance the conclusions of the working group on climate.
- Advance the conclusions of the working group on inclusion, ie. trade and gender.
The global landscape has evolved, WTO instruments are not all fit for purpose
- Trade is an instrument for political ambitions. Competitive neutrality is a broad conceptual and practical challenge that does not concern only the US and China.
- Levelling the playing field is an evolving mission. The Covid pandemic created a surge in fiscal stimulus while subsidies for agriculture and industries have remained high.
Director-General, World Trade Organization (WTO)
Guntram B. Wolff
Location & Contact