“Time to admit that the WTO’s day is done” was the headline on a piece by Zoe McKenzie in this newspaper last week. Certainly, nobody would deny that progress in the Doha Round has so far been unsatisfactory and that there is more scepticism about trade liberalisation in many parts of the world than 25 years ago.
However, the author’s statement that “the last time the WTO achieved a significant agreement was in 1994” is simply wrong. It is time to recall a number of recent and general achievements of the World Trade Organisation.
At the ministerial conference in Nairobi in December 2015, WTO members adopted a commitment to abolish export subsidies for farm exports. Under the ministerial decision, developed countries will immediately remove export subsidies, except for a handful of agriculture products, and developing countries will do so by 2018, with a longer time-frame in some limited cases. Australia, in particular, as the leader of the Cairns Group which has consistently advocated for agricultural liberalisation, will appreciate how important this agreement is – in itself, and for further reform in this highly regulated sector.
Also at Nairobi more than 50 members concluded the expansion of the Information Technology Agreement, which covers an additional 201 products valued at more than $1.3 trillion per year. This is not an academic result – several signatories of this agreement have already implemented the first tariff cuts stipulated by the agreement worth billions of dollars.
Negotiations on public procurement were concluded in December 2011 and, after completion of domestic ratification procedures, the revised Agreement on Government Procurement entered into force in April 2014. Australia negotiations to join the GPA are well advanced. Others, including China and the Russian Federation, are lining up.
In December 2013, WTO members concluded negotiations on a Trade Facilitation Agreement which contains provisions for expediting the movement, release and clearance of goods, including goods in transit. This agreement is of prime importance as traders from developing and developed countries have long pointed to the vast amount of “red tape” that still exists in moving goods across borders. It is expected to facilitate gains through several channels: increased participation in global value chains for developing economies in particular, greater export capacity and integration into trade networks for small and medium sized enterprises, and the attraction of new foreign direct investment inflows as a complement to the increased trade.
Monitoring of trade policies is another important and well-established WTO activity. If today we have a fair degree of knowledge about trade policy developments in the world as a whole and in individual countries, this is largely due to WTO’s regular monitoring reports and its Trade Policy Review mechanism which periodically sheds light on members’ trade policies. Australia has been a staunch supporter of these transparency mechanisms which hold governments accountable and provide businesses with the kind of predictability that allows trade to flow.
Unthinkable just two decades ago, dispute settlement is running so smoothly today that even McKenzie admits the WTO’s effective role. Maybe it is also time to recall that WTO is one of the smallest international organisations in terms of staff and costs. Its output is mutually agreed rules and their legal interpretation, not expensive development projects. Certainly, many of these rules need to be brought in line with 21st century realities of global trade, but this means members should support the institution to evolve rather than write it off.
In sum, the article is quite reminiscent of the question: “What have the Romans ever done for us?” in Monty Python’s Life of Brian. Beyond effective dispute resolution, achieving an agreement on trade facilitation, agreeing on the elimination of agricultural export subsidies, providing transparency on trade policies and still being the only multilateral forum for trade negotiations, what has the WTO ever done for us?
Arne Klau is a WTO Visiting Fellow at the Institute for international Trade, University of Adelaide. The opinions expressed in this article are his own.