WTO seeks trade deals with its fate at stake | Economic news

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By JAMEY KEATEN, Associated Press

GENEVA (AP) — The World Trade Organization is facing one of its most dire moments, the culmination of years of slide into oblivion and ineffectiveness. Now may be a chance to turn the tide and reemerge as a champion of free and fair trade – or face an even more uncertain future.

For the first time in 4.5 years, after a pandemic pause, government ministers from WTO countries will meet for four days from Sunday to tackle issues such as overfishing of the seas, vaccines COVID-19 for the developing world and food security at a time when Russia’s war in Ukraine has blocked the export of millions of tons of Ukrainian grain to developing countries.

Faced with a key test of her diplomatic skills since taking office 15 months ago, WTO Director-General Ngozi Okonjo-Iweala has in recent days expressed “cautious optimism” about the possibility of progress on at least one of four issues expected to dominate the meeting: fisheries subsidies, agriculture, pandemic response and organizational reform, spokesman Fernando Puchol said.

Diplomats and trade teams have been working ‘very long hours’ to come up with at least ‘clean text’ for a possible deal – which ministers can simply approve and not have to negotiate – on the one of those issues, Puchol told reporters on Friday.

Political cartoons about world leaders

political cartoons

“It’s hard to predict an outcome right now,” he said.

The Geneva-based body, barely a quarter century old, brings together 164 countries to help ensure smooth and fair international trade and resolve trade disputes. Some outside experts expect few outcomes from the meeting, saying the main one may simply be bringing ministers to the table.

“The multilateral trading system is in bad shape. The situation in Ukraine is not helping,” said Clemens Boonekamp, ​​an independent trade policy analyst and former head of the WTO’s agriculture division. “But the mere fact that they come together is a sign of respect for the system.”

Alan Wolff, former deputy director-general of the WTO, expressed optimism that members could make at least some progress.

They could reach an agreement, he said, to help ease a looming global food crisis stemming from the war in Ukraine by ensuring the UN World Food Program receives a waiver from food export bans. imposed by WTO countries wishing to feed their own people.

Wolff, now a senior fellow at the Peterson Institute for International Economics in Washington, expressed confidence in Okonjo-Iweala, saying, “I’m not prepared to sell her short.”

He said members “appear to be making progress” on a deal to cut subsidies that encourage overfishing – something they’ve been trying to do for more than two decades.

“Are they wrapping up this time?” asked Wolff. “Not clear. It was a drama.”

One problem – among many – is that the WTO works by consensus, so any of its 164 member countries could block the work.

In short, the WTO has become a major diplomatic battleground between developed and developing countries, and some experts say reform is needed if it is ever to get things done.

The trade body, created in 1995 to succeed the General Agreement on Tariffs and Trade, has experienced a slow dismantling. It hasn’t produced a major trade deal in years. The last big success was a 2014 deal touted as a boost to low-income countries that cut red tape on clearing goods at borders.

Years ago, the United States began to crack down on the WTO appeals court, which in theory has the final say in trade disputes, such as a much-publicized dispute between the United States and the EU involving aircraft manufacturing giants Airbus and Boeing.

Then US President Donald Trump arrived, threatening to pull America out of the WTO for his insistence that it was unfair to the United States. In the end, it didn’t and simply circumvented the WTO – imposing sanctions on allies and enemies and ignoring the rules of the trade organization and the dispute settlement system.

Once champions of the WTO, the United States has lamented China’s admission and insists that Beijing has violated the rules of the trade body too much. The United States accuses China of excessively supporting state-owned enterprises and hampering free trade, among other things. China denies these allegations.

A generation ago, the WTO sparked huge offensive and even violent protests, especially from anti-globalizationists and anarchists who hated its behind-closed-doors secrecy and its image of elites who decide everything.

William Reinsch, a former US trade official, has warned that the WTO now risks becoming useless. The best way to show it still matters, he wrote this month, is to negotiate a deal, perhaps on fisheries, COVID-19 vaccines or a tougher issue: encouraging more free- trade in agriculture.

Reinsch, now at the Center for Strategic and International Studies in Washington, said the United States must do more — including making compromises — to ensure the WTO can reach agreement on contentious issues.

“The future of the WTO is in danger,” he said. “Failure would be bad for fish and farmers, but it would also be bad for a global economy built on the rule of law.”

AP Economics Writer Paul Wiseman contributed to this report from Washington.

Copyright 2022 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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