WTO members stress rule-based multilateral trading system

A broad consensus at a two-day informal ministerial meeting of the World Trade Organisation (WTO) ending on Tuesday evening reaffirmed commitment to preserving a rule-based, multilateral trading system.

It also heard calls for caution against retaliation to US President Donald Trump's unilateral protectionist moves.

An overwhelming majority of the speakers sought clarification from Deputy US Trade Representative Dennis Shea about Washington's opposition to the three key appointments to the WTO appellate body that adjudicates on trade disputes.

The American opposition has paralysed the functioning of the appellate forum.

The meeting, the first since the Buenos Aires ministerial talks collapsed less than three months ago over issues on food subsidies and investment, heard serious concerns flagged by several countries.

They were over the Trump administration's imposition of import duty on steel and aluminium from the European Union (EU), China and India stoking of reprisal and a global trade war, threatening to make the WTO irrelevant.

Sources said at least four key WTO members -- Japan, EU, South Korea and Brazil -- held out the threat of retaliating if the US implements its unilateral decision of duty hike.  

The US recently slapped tariff on its imports of steel and aluminium and hinted at more such protectionist steps. It has also dragged India to the WTO over the latter's export subsidy programmes, alleging that they were hurting US companies.

Given the informal character of the New Delhi meeting, no joint decision was meant to be taken by it nor any joint declaration issued after it.

But a majority view, including that of Bangladesh Commerce Minister Tofail Ahmed, was that the Doha developmental round of the talks, which focuses on farm and industrial tariffs and services trade, should be continued.

WTO Director General Roberto Azevedo said although there were concerns on unilateral decisions taken by some countries and their potential escalation, members were committed to actively engage to find solutions.

The consensus in New Delhi voiced concern over attempts to paralyse the WTO's dispute resolution mechanism and called for fast resolution of the deadlock. 

The US has repeatedly blocked a selection process to fill three vacancies at the highest adjudication entity for trade disputes at the WTO appellate forum which could make it non-functional by as early as December 2019.

The US has so far refused to engage in talks on this issue. All that Azevedo said was the US supports the WTO but wants certain reforms in it.

The developing countries stand on the need for allowing the WTO appellate body to function smoothly, as articulated by Indian Prime Minister Narendra Modi when the participants of the meeting called on him.

“A robust conflict-resolution mechanism is one of the key benefits of the WTO,” Modi told them.

The WTO director general acknowledged the trade tensions sparked by the US unilateral actions and agreed that “it has a very real potential to aggravate”.

“But that is something we should avoid and that is what we heard in New Delhi today,” he added at a press conference along with Indian Commerce Minister Suresh Prabhu after the informal meeting.

Azevedo said, “Many countries are saying we have a concern with it (the US actions) and that there is potential for escalation. But we have to proceed very carefully and try to work within the framework of the WTO.”

Prabhu stressed that India has been a votary of multilateral trading system.

“Let us be mindful that in the past when the key economies departed from multilateral obligations by taking recourse to exceptions for agriculture and textiles, it led to other members securing similar exceptions,” he said.

“This only eroded the system and diminished its credibility,” added Prabhu.

He called for respecting the mandates and decisions made at earlier ministerial meetings, including the Doha Development Agenda (DDA), and pushed for preserving the mandate of special and differential treatment to poor and developing nations.

The special treatment allows longer timelines to poor and developing countries than their developed counterparts to implement a particular trade agenda, among other facilities.

 Prabhu also said the issue of a permanent solution to the critical issue of public procurement programme and all other issues relating to agriculture were discussed.

India has been calling for the need for developed nations to cut their massive trade-distorting farm subsidies, which was one of the key issues of the Doha development round of the WTO talks, which was now being sought to be undermined by the rich countries.

Showing flexibility, Prabhu said India was willing to look at certain new issues like e-commerce only after “we are convinced that these issues are trade-related and negotiating binding rules on them would be beneficial for poor and developing countries”.

Delegates from 52 countries, including the US and China, attended the informal meeting of the WTO called by India amidst increasing protectionism in global trade.