The writer is executive vice-president of the European Commission responsible for trade policy
Ministers will hold the future of international trade in their hands when they meet in Geneva next week. They have a golden opportunity to breathe new life into the World Trade Organization.
Success could accelerate global economic recovery and boost climate action, while failure risks further fragmentation of the global trading system and erosion of trust among its members.
The WTO’s core mission is to underpin rules-based international trade. By many economic measures, it has been a success. By joining the WTO, members have, on average, almost tripled their trade. This has in turn helped to lift hundreds of millions of people out of poverty worldwide.
In the EU, 38m jobs are supported by international trade — an astonishing 11m more than a decade ago.
Today, however, the WTO’s rule book is badly out of date. Its ability to referee trade disputes is paralysed and it is out of touch with current imperatives such as action on climate change and the expansion of digital trade.
An irrelevant WTO may lead to a system based on power relations, which harms everybody and benefits no one. This would also hit the interests of those developing countries less integrated in global trade.
All our economies are relying on international trade for recovery, but the global rule book needs to catch up with global reality to make a real difference.
At their biennial gathering (MC12) next week, trade ministers can get this much-needed process of reform under way. But they must first stop speaking past each other and focus on workable compromises.
MC12 can be a game-changer, kick-starting a process that restores the WTO as a negotiation and deliberation forum, with a reformed dispute settlement system.
The EU has been leading from the front, publishing a plan for rebooting the WTO earlier this year — one with sustainability at its heart — and working to build coalitions for reform ever since.
The wider EU to-do list is clear. With the COP26 climate summit still fresh in our minds, we believe that the global trading system must do more to protect our planet. Real progress on sustainability is within reach at MC12, with a deal to protect oceans and global fish stocks. Specifically, ministers can agree to eliminate harmful subsidies that led to illegal fishing and overfishing.
This agreement is tantalisingly close and would represent a victory for both the economy and environment, while sending a strong signal that the WTO is back in business. The EU is ready to do everything it takes to get a result, and is willing to accept new sustainability rules and eliminate subsidies for vessels fishing in the unregulated high seas. We expect other countries to do the same.
A successful MC12 must also demonstrate that the WTO can help in the fight against Covid-19. The EU has credibility on this question: we have exported well over half of our vaccine production.
We want to see a shared commitment from WTO members to keeping supply chains open, helping to get every citizen vaccinated worldwide. We also need to make sure we are prepared for future pandemics. That is why the EU is committed to helping improve regional production capacity, particularly in Africa.
Of course, intellectual property has to be part of the global response, too. The EU is working actively in this area and is advocating a targeted waiver on compulsory licenses. This solution could facilitate production of vaccines and other essential health products while preserving incentives for innovation and investment, which are key for continents such as Africa. We still hope consensus can be found in this crucial matter in the days ahead.
On the economic front, the door is also open for an agreement on the regulation of services. The OECD estimates this could save $140bn in trade costs, giving another welcome boost to global recovery.
The stakes are high. Real breakthroughs are possible, but only with sufficient political will and a shared sense of urgency. The EU will not be found wanting, but we need others to play their part.
Failure to do so would represent an unconscionable dereliction of duty to our citizens, our workers, and to the hopes of a truly sustainable global recovery.
Source: Economy - ft.com
