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WTO members fail to reach deals in Argentina

One bright spot is more than 60 members agree to launch new working group regarding electronic commerce.

by Bryce Baschuk and Charlie Devereux

No substantial deals were reached at a World Trade Organization meeting in Buenos Aires after three days of negotiations, highlighting how multilateral trade relations are growing increasingly fraught. 

The trade body’s 164 members didn’t reach full consensus on any of the major objectives it had set itself before the meeting. They agreed to continue negotiating positions on agricultural and fishing subsidies and on reaching a definition on what constitutes illegal fishing.

“We knew that progress here would require a leap in members’ positions,” Director General Roberto Azevedo said at the conclusion of the meeting. “We didn’t see that.”

The failure to reach agreements on key issues this week in Buenos Aires drew unusually strong rebukes from trade chiefs from Europe, to the U.S., India and South Africa. Sharp divisions over the WTO’s ability to govern trade emerged early on at the talks, with U.S. Trade Representative Robert Lighthizer saying the organization spent too much energy on litigating disputes. The EU echoed some of the frustrations with the ineffectiveness of multilateral negotiations, but also defended the WTO appeals system that the Trump administration has criticized for using judicial over-reach.

Flash Points 

India sought exemptions to a prospective trade agreement aimed at curbing subsidies for illegal fishing operations. The U.S. said such exclusions were unacceptable as they would permit overfishing and harm global fish stocks. The United Nations Sustainable Goals include a target to prohibit certain forms of subsidies that contribute to overfishing and illegal fishing.

Fishing wasn’t the only point of contention at the Dec. 10-13 gathering in Argentina, convened with the aim of bolstering global trade.

Japan also joined the U.S. and EU in targeting China’s trade practices, without directly naming the Asian economy. In a joint statement Tuesday, the three nations criticized “severe excess capacity in key sectors,” market distorting subsidies, and policies that force companies to transfer their proprietary technologies abroad.

‘Real Soul Searching’ 

The meeting’s chairwoman, Argentina’s Susana Malcorra, had set “austere expectations” on fishing, agriculture and other topics for the gathering. In a rare bright spot, more than 60 WTO members agreed to launch a new working group aimed at establishing international rules to govern electronic commerce.

Australian Trade & Industry Minister Steven Ciobo said the fact the U.S. signed up to the ecommerce proposal shows that it’s still prepared to work within the bounds of the WTO on certain issues.

“We have fallen short of the aspiration people would have,” Ciobo said in an interview on the sidelines of the conference. Still, the ecommerce outcome “is evidence the U.S. is willing to engage where their national interests are served. It should be a very positive signal that the WTO can be nimble and respond to issues as they arise.”

In his concluding remarks, Azevedo drew comfort from saying that all members are in agreement that the WTO is the only organization capable of policing global trade and called on all parties to be less rigid in their negotiating.

“In taking this work forward, I think we need to do some real soul searching,” Azevedo said. “The system is not perfect but it is the best we have and we will all -- all -- deeply regret if we ever lost it.”

--With assistance from Andrew Mayeda.

To contact the reporters on this story: Bryce Baschuk in Geneva at [email protected]; Charlie Devereux in Buenos Aires at [email protected]

To contact the editors responsible for this story: Sarah McGregor at [email protected]

Andres R. Martinez

© 2017 Bloomberg L.P

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