"December 2017 WTO Conference ends in discord and stalemate"
The clock is counting down for the UK departure from the European Union. Right now - December 2017 - there remains the possibility that no EU-UK deal will be reached - and, furthermore, that this ‘hard-Brexit’ crash out of Europe could happen in an flash at 23:00 on 19 March 2019 precisely.
What does this mean for business? Earlier this week, Brexit-Partners reported the results of analysis commissioned by Parliament that strongly refutes the supposition that ‘no deal is better than a bad deal’. And ‘no deal’, according to the Brexit Secretary, David Davis, means working within the framework and guidelines set by the World Trade Organization (WTO).
This week the WTO held a 3-day summit in Buenos Aires. Such meetings review the effectiveness of the rules measured by the ease and volume of global trade across the 164 participating nations and manage the evolution of the framework to the future benefit of all.
Yesterday, according to their press release and reported by Reuters, the World Trade Organization failed to reach agreement on some key topics. The conference ended in “discord in the face of stinging U.S. criticism of the group and vetoes from other countries.”
The stalemate dashed hopes for deals on e-commerce and curbs to farm and fisheries subsidies. It raises questions about the WTO’s ability to govern the increasingly disputed global trade.
“We have not achieved any multilateral outcomes,” European Union Trade Commissioner Cecilia Malmstrom told a news conference. “The sad reality is that we did not even agree to stop subsidizing illegal fishing.”
She said the meeting laid bare one of the WTO’s biggest deficiencies - that all agreements must have the unanimous consent of all 164 member countries – and that the United States was partly to blame but that other countries also blocked progress.
U.S. Trade Representative, Robert Lighthizer, suggests that negotiations among smaller groups of “like-minded” WTO countries are a better approach going forward.
Malmstrom agreed that: “short-term pluri-lateral arrangements within the WTO framework” – and, indeed, two such arrangements were announced at the Buenos Aires conference. 70 members, including the United States, European Union and Japan, pledged to forge ahead with negotiating rules on electronic commerce; and the EU and Japan joined the United States on Tuesday in vowing to combat ‘market-distorting’ policies - such as those pervasive in China that have fuelled excess industrial capacity, subsidies for state-owned enterprises, and technology transfer requirements.
WTO Director-General Roberto Azevedo added that: “WTO members needed to do some 'real soul searching’ about the way forward - and realize they cannot get everything they want.” He said U.S. moves to block WTO appeals judges - which could disrupt the body’s dispute settlement system.
Brexit-Partners believe that the outcome firmly endorses the views of the UK Parliamentary report. However, this framework may well underpin the environment that UK business must operate.
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