Doha may be dead. Long live free trade

How to still use the WTO to spur growth and support development.

This weekend, trade ministers from some 30 countries will meet in Davos for their first discussion since the World Trade Organization’s Nairobi ministerial conference in December. Given the importance of trade for achieving growth and development, the continuing uncertainty in the global economy and the fact that protectionist measures have been on the rise — as the 2015 Global Trade Alert report showed — ministers should use the meeting to reflect on how to revitalize negotiations in the WTO.

Certainly, this will take time. In Nairobi, WTO members reached several important agreements that will improve the trade prospects of developing countries in particular. That negotiation was an intense process, but the results provide an excellent base for future work. Despite many doubts in advance, the meeting — like the Paris climate conference — showed the world that multilateral institutions can produce results. It allows us to start reflecting on new issues for the future in a positive, forward-looking spirit.

Too much media comment since December has focused on a backward looking question that has little practical importance in the real world — the status of the 14-year negotiating process known as the Doha Development Agenda (DDA).

Ministers meeting in Davos should avoid the temptation to follow suit. Doing so would cast doubt on the achievements of Nairobi only weeks after its success. It would also waste time on a false debate that distracts us from charting a productive way forward. This discussion should build on four important facts:

First, since the Doha Round was launched in 2001, the world has changed economically, politically, and as the theme of this year’s Davos conference makes clear, technologically.

Second, many of the issues at the heart of the Doha talks, which aim at improved trade rules focused on development and growth, remain essential.

Third, the structures of the DDA have not allowed us to reach a comprehensive agreement on most of these issues. We have had all the time in the world but have not managed to do it.

Fourth, the WTO is still vital. Its comparative advantage is the most favored nation principle, which means each member should treat all others the same. This allows the WTO to set rules that apply everywhere. And these rules, upheld by a strong dispute settlement system, underpin the colossal flows of goods and services trade that are central to the world economy today.

In the EU’s view, we should face these facts, not just because they are true, but because they help show us the way ahead.

First, we must continue to work on outstanding Doha issues, particularly those issues that can only be solved by the WTO and not in bilateral or regional agreements. One such issue is subsidies. We cannot approach them in the same way that we have in the past; we need to look at them with fresh eyes and seek new avenues for compromise. But neither should we just close up shop and walk away.

Second, we must begin to discuss, and eventually to negotiate, issues that have not been addressed under the DDA but are critical for the world economy today. Helping trade and investment flow in 2016 is a different task to what it was in 2001. That is evident from the kinds of barriers many WTO members are addressing in their free trade agreements. Of the over 200 bilateral and regional agreements notified to the WTO secretariat since 2000, 59 percent contain commitments on competition — an area where there is no multilateral agreement at all. They also go far beyond WTO commitments on areas such as investment, services and intellectual property protection.

To remain relevant, the WTO needs to look at broadening its agenda to address some of these questions. Such issues could include e-commerce and digital trade, investment, regulatory issues affecting goods and services behind the border or enhanced disciplines on subsidies and on murky forms of local content obligations, to name just a few.

Third, we need to work differently. The WTO has made important progress in recent years — on trade facilitation in Bali, and, in Nairobi, on information technology equipment and subsidies to agricultural exports. We are also making good progress on environmental goods and, outside the WTO, in the Trade in Services Agreement negotiations. But this progress has been achieved by tackling problems individually or in small packages, not through a grand bargain in which nothing is agreed until everything is agreed by everyone. That suggests that we should favor more focused negotiations and tackle specific issues on their own merit.

With the WTO now reaching 164 members, we will rarely agree on all aspects of even one issue. That means we will likely also have to be flexible on who participates. In some cases, we will have to work on trade deals between smaller groups of countries as well — so-called plurilateral agreements.

In doing so, we must avoid undermining the very reason the WTO remains so powerful — the most favored nation principle. That means we need a clear pecking order for our approaches. Multilateral is best, plurilateral agreements second. And open plurilateral agreements, which allow others to join later and whose benefits apply to all members whether they participate or not, come before closed ones.

It should also be clear that no WTO member should be forced into negotiations on any issue. At the same time, the best way to foster an inclusive multilateral system is to enable willing members to advance a given issue within the WTO, and not outside of it.

This weekend’s meeting is just an opening exchange. It is too early for ministers to decide exactly how to approach new discussions in the WTO. But if we are prepared to face today’s realities rather than focusing on the past, we can begin to chart a way forward.

Trade is critical to development and growth. The world needs a World Trade Organization that can effectively develop global rules on the issues that matter to developed and developing countries alike. Whether Doha is dead or alive, the WTO needs to spur growth and support development.

Cecilia Malmström is the European commissioner for trade.

Click Here: Aston Villa Shop