The WTO Twelfth Ministerial Conference (MC12) took place in Geneva last week.
MC12 was the first time in almost five years that WTO Ministers met. Much had changed since the previous meeting (MC11) at Buenos Aires in late 2017: two WTO members are at war, following Russia’s invasion of Ukraine; the world is recovering from a global pandemic with concomitant disruptions; and global energy and food crises are unfolding. And, in the background, there is a groundswell of changing attitudes to trade policy, evidenced in debates over “friend-shoring” and other approaches to relations with trade partners with shared values.
Against this background, it was unclear whether MC12 could produce results. But it did so. co-hosted by Kazakhstan, the Conference was chaired by Timur Suleimenov, First Deputy Chief of Staff of the Kazakh President. At the opening ceremony, WTO Director General Okonjo-Iweala said one or two outcomes would be the mark of success for MC12. After a marathon meeting, scheduled for three days but lasting for four, and extending into the small hours of a fifth, WTO members successfully concluded MC12 on 17 June 2022, securing multilaterally negotiated outcomes on a series of key trade issues. Apart from being a success in itself (even if, in some areas, a qualified success), this package reaffirms that multilateral trade negotiations can make progress in the WTO framework, rebutting doubts expressed by many.
TheCityUK was active in promoting the case for progress on services at MC12, particularly the renewal of the Moratorium and the continuation of the Electronic Commerce work programme. With our allies in the Global Services Coalition and the European Services Forum we drafted opinion pieces for media take-up, participated in industry representations to governments represented at MC12, and put views vigorously to the WTO secretariat.
The feedback from some key missions in Geneva and from the secretariat has been that this made a significant difference to how industry interests were perceived: reports indicate that the WTO DG had never before been subject to the same degree of consistent industry views. This involved major effort, but the lesson is that if the global services industry unites in putting its weight behind some core objectives, and harnesses the media to attract interest in them, the results can be effective beyond expectations.
Summary of MC12 Outcomes
The package resulting from MC12 comprises a series of decisions. For services, the most significant outcomes were agreement to extend the Moratorium on customs duties on electronic transmissions to MC13 (expected to take place towards the end of 2023) and the continuation of the Work Programme on Electronic Commerce. The text of these two ministerial decisions is available online. These were both outcomes for which services industries coalitions had pressed hard: indeed, reports from Geneva suggest that they would not have been secured without the consistent pressure that was exerted on both the WTO Secretariat and individual WTO members (both in capitals and their missions in Geneva). But they did little more than extending the status quo, and fell short of making the moratorium permanent, leaving open challenging questions over the Moratorium’s fate in the longer run.
The Ministerial Declaration “took note” of the WTO’s ongoing work on services – a subdued reference that was less than effusive, but which provided a placeholder for services.
Outside the multilateral negotiations at MC12, WTO Members in Geneva used the opportunity to make progress in a number of initiatives relating to trade in services. These included:
- JSI on Services Domestic Regulation: three new Members (Georgia, the UAE and Timor-Leste) joined.
- The co-Chairs of the e-Commerce JSI reported good progress and aim to issue a consolidated negotiating text by the end of 2022. They also launched an e-Commerce Capacity Building Framework aimed at helping build digital capacity in developing countries.
- The Trade, Environment and Sustainability Structured Discussions (TESSD) announced the establishment of four informal working groups on environmental goods and services, trade-related climate measures, circular economy and circularity, and subsidies. Brazil, Tajikistan, and United Arab Emirates also joined the TESSD initiative, bringing it to 74 members.
The Wider Package
These services-related decisions were however only one element in a much larger package, covering fisheries subsidies, the WTO response to emergencies, including a patent waiver for COVID-19 vaccines, food safety, and WTO reform.
On WTO Reform, the core ministerial commitment was, “We acknowledge the need to take advantage of available opportunities, address the challenges that the WTO is facing, and ensure the WTO's proper functioning. We commit to work towards necessary reform of the WTO. While reaffirming the foundational principles of the WTO, we envision reforms to improve all its functions.”
It goes without saying that agreement on the package was hard-fought, on a “nothing is agreed until everything is agreed” basis. The area of least agreement concerned agriculture, on which the WTO DG noted that differences on some issues, including public stockholding for food security purposes, domestic support, cotton, and market access "meant that we could not achieve consensus on a new roadmap for future work," although "members found a renewed sense of purpose: they are determined to keep at it on the basis of existing mandates, with a view to reaching positive outcomes at MC13."
At the conclusion of MC12 the WTO DG told Ministers:
"The package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time…They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic competition will be able to exist alongside growing strategic cooperation."
Despite the obvious divisions characterising MC12, this assessment is broadly tenable. Some anticipated threats to success were avoided: Russia was present, but played no spoiler role; China was constructive, and co-sponsored the proposal for extending the Moratorium; the US was generally positive, despite earlier concerns about the Biden administration’s approach; the Quad (US-EU-India-South Africa) were ready to negotiate the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic, despite general perceptions that it was unlikely to be a fitting response to the underlying issue of vaccine distribution. All in all, most governments with a strong position on a specific issue could claim to have achieved at least part of their objectives, with some ground laid for approaches to MC13: the result is some restoration of faith in the WTO.
All the same, preparations for MC13 will remain challenging. For services, the agreements reached have the merits of providing a basis for future work, particularly on digital trade. But it seems to be clear that WTO are weary with bargaining for future extensions of the Moratorium, and will wish to see some fresh approach to its future. That will require some fresh thinking, and a fresh approach, in which industry will need to take a lead alongside others capable of providing thought-leadership and creating a changed climate of opinion. TheCityUK LOTIS Group will need to take a view on the input it can make to shaping the UK position, building on its past discussions of possible improvements on the functioning of the WTO. Time is short, if MC13 is to take place successfully in the last quarter of 2023.
The date of MC13 has yet to be fixed. At MC12 Ministers requested the WTO General Council to hold consultations with a view to deciding on the date and venue of MC13. The Chair recalled that
the Decision on the Work Programme on Electronic Commerce contains an understanding that MC13 should ordinarily be held by 31 December 2023. There are two offers – by Cameroon and the United Arab Emirates - to host MC13.