| THE GATT-WTO SYSTEM IN A DIFFERENT WORLD
FROM THAT WHICH ORIGINATED IT
Can a renovating boost be expected from the Geneva Ministerial Conference?
by Félix Peña
English translation: Isabel Romero Carranza
The need to deepen the debate on the future of the
WTO will not be absent from the upcoming Ministerial Conference of Geneva
next December. It is an occasion unlike any other to give a renovating
boost to a system that is showing signs of obsolescence, both in its agendas
and in its work methods. There is, however, certain skepticism on the
One way or the other the Doha Round will be present at this Ministerial
Conference either due to the possibility -now perceived as remote- of
advancing some favorable results for the least developed countries, of
sending believable signals regarding its future, or due to the need of
confronting the risk of a WTO that is in serious risk of losing efficiency,
relevance and, above all, legitimacy.
At least three questions appear as relevant for the much needed debate
on the future of the WTO. These are: How would it be possible to prevent
the definite collapse of the Doha Round, at least concluding it in a less
ambitious version to that which was originally planned? If this were feasible,
how could the WTO be preserved from the eventual negative impact that
such collapse would have on its effectiveness, credibility and relevance?
And even in the case that the Doha Round were recoverable, how could political
energy and technical ingenuity be harnessed for the design of a new stage
of the WTO that can profit from the accumulated experience, strengthen
its essential functions and innovate in its agenda of priorities, work
methods and negotiation modalities?
The upcoming Cannes G20 Summit and the Geneva WTO Ministerial Conference
offer an opportunity for organized regions to take up an active role in
the redefinition of the architecture of the international trade system.
In both opportunities, Argentina and Brazil could influence with their
proposals on the rescue of the Doha Round and the design of a new stage
of the WTO. It would be reasonable to expect that both countries coordinate
their positions and that, in the measure that is possible, that they also
reflect the points of view of Mercosur and of the South American region
as a whole.
The evident difficulties to conclude the Doha Round negotiations are
promoting a healthy debate on the future of the World Trade Organization
(WTO) and its role in world trade. This is a debate that will not be absent
at the 8th Ministerial Conference to be held in Geneva between the 15th
and 17th December of this year. This is the WTO's main body and it is
stipulated to meet every two years.
For some time it was understood that the main question in relation to
the future of the WTO was how to conclude, while taking into account all
the different interests at stake, an "ambitious and balanced"
Doha Round that also had a clear impact on economic progress, particularly
of the developing and underdeveloped countries. Even when this is still
a valid question it will be difficult to find a satisfactory answer in
the current economic and political world context, especially considering
the so-called "single undertaking" requirement. Very few hope
for a conclusion of the Doha Round before the start of the new US presidential
term. It is also considered very unlikely that any basic agreement will
be reached at the Ministerial Conference of December, even for the most
Today, the debate on the future of the WTO could be focused on many questions.
However there is one that stands out above the rest: How to adapt the
global multilateral trade system, first institutionalized by the GATT
and now by the WTO, to the realities of a world that is completely different
from that which originated them, whose characteristics can be clearly
observed in numerous events that have an impact on international trade
relations and even penetrate deep into the everyday lives of the member
On the upcoming Ministerial Conference much of the attention will be
focused on the outcome of the deliberations to see if they result in a
clear renovating boost of a system that is showing signs of obsolescence,
both in its agendas and its work methods. Such boost could translate into
a Plan of Action with clear signals of the steps to be conceived and eventually
followed in order to adapt the WTO to the new international context. There
is, however, certain skepticism regarding the results that may be achieved
next December. It has even been questioned if the expense of the public
funds that such international gatherings demand can really be justified
on this occasion.
The results of this type of Ministerial Conference rely on the quality
of the preparation process and the political leadership of the member
countries or group of countries that are in better condition and have
greater legitimacy. Additionally, it may depend on the quality of the
leadership -or lack of it thereof- of the home country if the meeting
were to take place, in the specific case of the WTO, outside of Geneva.
It also depends on the efficiency of the technical leadership of the Director
On July 27, before the August recess, the President of the General Council
of the WTO, Ambassador Yonov Frederick Agah, referred to the preparation
for the Ministerial Conference. He emphasized that during the preparation
process, that will take place between September and the start of the meeting,
it should be remembered that "the WTO is not limited to the Doha
Round: the WTO is more than Doha" (see the full text of his statements
on www.wto.org/english/news_s/news11_s/gc_27jul11_s.htm). However, in
one way or the other, the Doha Round will be present in December's meeting,
either due to the possibility -now perceived as remote- of advancing some
favorable results for the least developed countries, the also now uncertain
possibility of sending clear and believable signals regarding its future,
or due to the need of facing the specter of a WTO that is in great danger
of losing effectiveness, relevance and, ultimately, legitimacy.
As the date of the Geneva Ministerial Conference approaches, three are
the concrete questions that would seem relevant for the necessary debate.
These are not indeed the only ones and each one of them admits several
unfolding possibilities. They are, however, the questions that were raised
on July 7 at the meeting of a work team of the Evian Group in Lausanne
(on this regard refer to http://www.imd.org/)
and those expressed by renown experts at the Trade Forum of CUTS International
- Consumer Unity & Trust Society (http://groups.google.com/).
These questions are: how would it be possible to prevent the definite
collapse of the Doha Round, at least concluding it in a less ambitious
version than was originally planned? If this were not possible, how could
the WTO be preserved from the eventual negative impact that such collapse
would have on its effectiveness, credibility and relevance? And even in
the case that the Doha Round were recoverable, how could political drive
and technical ingenuity be harnessed for the design of a new stage of
the WTO that allows to capitalize on the experience of the last ten years,
strengthen its essential functions and innovate the agenda of priorities,
work methods and negotiating modalities? (On this regard refer to my column
in "El Cronista" newspaper, Buenos Aires, August 4, 2011, "Aportes
para un necesario debate sobre el futuro de la OMC", on http://www.cronista.com/).
In order to search for answers to these questions, three facts related
to the WTO should be taken into consideration.
The first relevant fact is that, currently, this organization is inserted
in a world reality that is different from that which originated it back
in 1994 and, in particular, to that which originated the GATT, in 1947,
from which the main sustaining rules of the global multilateral trade
system derive. Certain events illustrate the emergence of a new context
and everything indicates that their effect will be accentuated in the
next years. Without overlooking other facts, which may be just as relevant,
we can mention the following: the strong shifts in the relative strength
of the main member countries -especially due to the prevailing perception
of the markets on their current and potential influence in the world trade
of goods and services and in investment and technological flows-; the
assertive participation of emerging and re-emerging economies -such the
cases of China and India-; the growing relevance of the multiple modalities
of international production networks -reflected by the concept "made
in the world" accurately coined by the Director General of the WTO-
(on this regard see www.wto.org/english/res_s/statis_/miwi_s.htm) -; and
the proliferation of preferential trade agreements -about 300 according
to the Report on World Trade 2011, recently published in Geneva ( see
The second important fact is related to the validity and relevance of
some of the WTO's essential functions, which would be convenient to strengthen.
These entail the creation of rules that enable to achieve a reasonable
degree of collective disciplines in the trade policies of member countries;
an ambit to guide and direct the different modalities of international
trade negotiations -global, multilateral, sector, preferential-, and an
efficient mechanism for the resolution of conflicts originated from the
application of its regulations.
Finally, the third relevant fact is that since its creation the GATT-WTO
system has accumulated experiences, even with the Doha Round, that are
useful -both the positive an the negative- to appreciate the potential
effectiveness of different mechanisms and instruments for the growth of
world trade and to accentuate its impact on the sustainable economic development
of its member countries, particularly the developing and underdeveloped
More than a debate that is circumscribed to the diplomacy of Geneva or
the corresponding capitals, or even to the academic arena, the answers
to the abovementioned questions -as well as to those that may come up
from the debate and preparatory process for the December Conference- should
also result from the participation, in each of the WTO member countries,
of the multiple actors with vested interests in international trade relations,
either governmental or non-governmental.
This could be a debate in which, if intended, modern IT technologies
could allow for a broader participation of all those involved. This could
be attained in the measure that such participation is valued and facilitated
by at least the main WTO member countries. In this case, a path would
open up to move forward towards a WTO 2.0. On this regard, the potential
offered by the new smarter version of the webpage of the organization
could be capitalized.
One way of clearly facing the future of the multilateral global trade
system institutionalized by the WTO would be to acknowledge the need of
introducing new issues in its work agenda, renewing the negotiating methods
and assimilating the profound changes that have taken place recently in
the map of international trade relations and global economic competition.
An example of the issues that are acquiring a special relevance in the
agenda of international trade relations as a consequence of the new global
context, is that of the relation between exchange rate parities and the
instruments of international trade, especially those that result from
the commitments undertaken in trade negotiations within the scope of the
WTO and other preferential agreements (on this regard refer to the recent
IPEA report listed as recommended reading at the end of this newsletter,
which includes the research results of a group of economists including
Vera Thorstensen, a prestigious specialist in international trade and
It is not realistic to expect the Ministerial Conference of Geneva to
provide effective answers to all the questions that may be raised regarding
the future of the WTO. However, it would be reasonable that, at the very
least, the ministers agree to appoint a group of experts to prepare a
report with the alternative solutions to the main issues that they raise
regarding a WTO that is feasible and efficient. In such case, there should
be an extraordinary minister's meeting next year to attempt to reach an
understanding that initiates the process of metamorphosis of the current
WTO. This suggestion is a variation of that presented on August 12 by
Jean-Pierre Lehmann during the debate on the WTO and its future, which
is taking place within the Trade Forum of CUTS International mentioned
Some facts may eventually contribute to a successful Ministerial Conference
in Geneva. One of them is that, some weeks before the meeting, the G20
Summit will meet in Cannes, this time under France's presidency. This
is an opportunity to provide concrete political orientation to the Ministers
that will attend the Geneva Conference. Another fact is that some of the
regions represented in one way or the other at the G20 are developing
their own analysis of the measures that should be taken in different fronts,
including the global multilateral one, taking into account the deepening
of the world economic and financial crisis and its visible effects on
the political and social life of many countries. This is indeed the case
of the European Union, at the epicenter of the current crisis. It is also
the case of Southeast Asia (on this regard see the final declaration of
the 43rd Economic Ministers Meeting of the ASEAN, held in Manado, Indonesia
on August 10th and 11th, 2011, on www.asean.org/26587.htm) and of South
America. An innovation that is worth noticing is that UNASUR has created
an Economic and Finance Council, whose first meeting at the ministerial
level was held in Buenos Aires on August 12 (it was not possible to find
the full text of the final declaration on the Internet, but aside from
the declarations of the participating ministers reflected in the media,
a more detailed version of what was agreed may be consulted on http://www.telam.com.ar/).
Both in relation to the G20 Summit as well as to the WTO Ministerial
Conference of Geneva an opportunity has opened up for organized regions
to take a leading role in the definition of a new architecture of the
international trade system. In both opportunities Argentina and Brazil
may influence with their proposals on the eventual rescuing of the Doha
Round and the design of a new stage of the WTO. It would be reasonable
to expect that both countries coordinate their positions and that, in
the measure that is possible, they can also reflect the points of view
of Mercosur and of the South American region. On this regard the new Council
created within UNASUR offers a favorable environment.
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Félix Peña Director
of the Institute of International Trade at the ICBC Foundation. Director
of the Masters Degree in International Trade Relations at Tres de Febrero
National University (UNTREF). Member of the Executive Committee of the
Argentine Council for International Relations (CARI). Member of the Evian
Group Brains Trust. More