The state of play at the World Trade Organisation

12 September 2023

The creation of the World Trade Organisation (WTO) in 1995 and China’s inclusion in 2001 marked “peak globalisation”, bringing the world’s biggest markets together to develop agreements benefitting countries of all sizes from global trade. However, after a quarter century marked by huge economic and geopolitical changes, exacerbated by Covid, the WTO needs action to retain its stature and relevance.    

Business has a clear role to play in this, which is why I’ll attend the WTO’s annual outreach event, the Public Forum in Geneva, this week.  Representing TheCityUK, I’ll also be part of the Global Services Coalition (GSC) delegation, engaging with key stakeholders in government and industry.    

Digital Trade & the WTO Moratorium 

Our key focus is ensuring that the WTO continues to develop a globally respected framework for digital trade, particularly services traded digitally. Yet, this framework faces a key challenge: the fate of the WTO Moratorium on customs duties for electronic transmissions.  The Moratorium enables the free flow of digital trade across borders without duties, preventing the 164 WTO members from  imposing customs duties on platforms like Zoom, Netflix, and online banking and payments.  

Unfortunately, several WTO members have contended that the Moratorium unfairly disadvantages emerging countries. As a result, unless renewed by consensus, the Moratorium will end on 31 March 2024. 

These concerns, however, are simplistic and one-sided. In fact, the Moratorium brings benefits to businesses and society:  

  1. The Moratorium brings benefits to businesses, especially small medium enterprises in emerging economies. By facilitating free flow of digital trade, it empowers these businesses to expand their market reach, ensuring equal access to digital content. 
  2. The Moratorium prevents additional costs that could hinder individuals and businesses from fully participating in global digital marketplace. 
  3. The Moratorium stops such costs being passed on to customers. Many of them are small businesses or individual consumers. 

Next Steps to keep the Moratorium  

The good news is that WTO members don’t need to embark on anything new or ambitious to preserve the Moratorium’s benefits.  They simply need to renew it or, ideally, make it permanent.  

TheCityUK and the GSC believe industry’s voice is key to achieving ministerial consensus to do so. This is why we seek support and urge friends and allies to promote the Moratorium’s significance in their networks, lobby their governments for its continuation and press their government’s delegation in Geneva to champion the Moratorium safeguarding cross-border digital trade. 

Wider Questions 

I’ve addressed the most significant issue regarding digitally trade services, which is a key concern for TheCityUK’s members and others in the GSC.  But it’s important to note that there are other concerns, which revolve around the need to reform the WTO. While many of these reforms are ultimately up to governments, who are key participants in the WTO, businesses inevitably have a strong interest. After all, businesses, not governments, are the actors conducting the trading within the framework established by the WTO.  

The core reform questions concern: 

  • The WTO’s dispute settlement system: it was initially effective, but some WTO members (notably the US) have complained that the WTO Appellate Body goes beyond settling cases to effectively making new laws. With the US seemingly readier to engage on the issue, could we expect progress?  It’s an important question for business, as a rule-making institution like the WTO relies on an effective dispute settlement mechanism to ensure the rules are applied to trade conducted by businesses. 
  • Framing the WTO’s agenda: there are constant pressures to introduce new agenda items and new ways of managing them. Some members feel that important subjects risk being superseded by new ones, with India pressing for existing issues to be resolved before introducing new agenda. The outcome is important for business, if fast-moving commercial priorities are to gain a place in an already crowded WTO agenda.  
  • The functioning of the WTO: WTO practices have remained essentially unchanged despite growth in membership and agenda diversity. This raises the question: Are the mechanisms fit for purpose, or must they change for the WTO to work successfully, bringing together diverse stakeholders facing global trade challenges?  In turn, this affects how business interacts with the WTO. 

While it’s unlikely the Public Forum will resolve all or any of these issues, it offers a platform for exchange of ideas aimed at tackling them. Stay tuned to my LinkedIn for updates throughout the week.  

John Cooke photo
John Cooke Co-Chair, Liberalisation of Trade in Services (LOTIS) Expert Advisory Group

John Cooke is a consultant at TheCityUK on international trade and investment policy issues. He has been Chairman of the Liberalisation of Trade in Services (LOTIS) Committee since 2006.

From 1997 to 2003 he was Head of International Relations at the Association of British Insurers.  His earlier career (1966-97) was with the UK Department of Trade and Industry (DTI), where he was a specialist in international trade and competition matters.  He was twice posted to the UK Permanent Representation in Brussels (first during the UK accession negotiations in 1969-73 and then for the first UK Presidency 1976-77). Most recently he was Adviser on Trade Policy; Chairman of the OECD Trade Committee; and Leader of the UK Delegation at the Ninth UN Conference on Trade and Development (UNCTAD).