WTO Ministerial Conference in Abu Dhabi discusses approaches to global trade

Global trade growth will be below expectations and markets remain broadly open, but countries should not take the sustainability of global trade for granted, WTO chief Ngozi Okonjo-Iweala warned yesterday at the opening of the organization’s 13th ministerial conference. Most participants have already managed to agree on a document on increasing the transparency of regulatory procedures for investors. Relevant ministers are also discussing changes to the rules of agricultural and electronic trade, but the resolution of the main problem associated with WTO reform and the “unfreezing” of the work of the appellate body is not expected – countries are discussing only procedural improvements to the process.

Global trade growth in 2024 will not reach the projected 3.3%, and in 2023 it is also likely to be lower than the 0.8% expected in October, WTO head Ngozi Okonjo-Iweala said at the opening of the WTO ministerial conference (MC13, held once at two years). She pointed to increased uncertainty even compared to the previous meeting of trade ministers in Geneva in June 2022, as well as “flatter” growth in aggregate demand (the exceptions being primarily the US and India). “International markets remain broadly open and trade adapts to one shock after another, but it would be naive to think that such resilience is effortless; multilateralism is at risk,” the WTO chief warned.

So far, the main achievement of MC13 has been the first official accession in eight years of two new members – Comoros and East Timor (with them the number of WTO members will increase to 166), with 22 more countries at various stages of the process. Among the agreements, the most significant progress is on fishing subsidies (they stimulate overfishing, we are talking about limiting them). By the end of the conference, it is expected that 70 countries will have signed it, and ratification by another 40 participants will be required for it to enter into force (the agreement itself was approved in Geneva following the results of MC12 in June 2022). In Abu Dhabi, the Russian delegation is headed by Minister of Economy Maxim Reshetnikov.

Regarding agricultural subsidies and trade, for the first time in 20 years, participants managed to prepare a single text, which was submitted for discussion by ministers. Progress in negotiations, however, has traditionally faced a more cautious stance from India and other developing countries. Ministers will also discuss extending the moratorium on tariffs on trade in digital products – although some countries point to budget losses and the preferences this creates for large technology companies.

The main problematic issue remains the reform of the WTO – now the execution of decisions of arbitrators in trade disputes is a purely voluntary matter, since the appellate body does not have enough judges (their appointment was blocked by the United States in 2019). Members of the organization still use the mechanism to resolve disputes – “sometimes in a very creative way,” the head of the WTO noted. The US position, according to her, has become more active, but the MC13 participants are not expecting the crisis to be overcome – while they are busy speeding up and simplifying procedures, and the draft resolution contains only an indication of the need to intensify negotiations to resolve the problem this year, as agreed at the conference in Geneva .

One agreement, however, that most countries have already agreed upon is that of facilitating investment for development. The document was discussed from 2020 to November 2023, now the participants are 125 countries (three quarters of the WTO members; consensus will be required to include it in its regulatory framework). The document does not address issues of investment protection and dispute resolution, but describes measures to increase the transparency of procedures to improve the investment climate. The effect of the agreement at the global level is nevertheless estimated at 1% of GDP; it “forms uniform rules for investors’ access to information about requirements and procedures. It will help in working in new markets of developing countries, primarily Africa, where Russian companies are developing oil and gas fields, building a railway, a nuclear power plant, and investing in joint production,” noted Maxim, adviser to the Center for Expertise on WTO Issues, in a column for Kommersant. Medvedkov.

Tatiana Edovina, Abu Dhabi