But the crisis also reminded us of the value of maintaining global collaboration and multilateralism. As governments’ sanitary measures have eased, global trade has returned with a vengeance: merchandise trade volumes rebounded in 2021 to 10.8% growth – nearly 3 percentage points higher than forecasts from the World Trade Organization (WTO). This transformation is testimony to what can be achieved through multilateral cooperation. Hence, global leaders must make use of any forum to promote multilateralism.
One such forum is the 12th Ministerial Conference (MC12) of the WTO originally scheduled to take place in Geneva, Switzerland from 30 November to 3 December, before being postponed due to an uptick in COVID-19 cases across Europe. These biennial conferences are the topmost decision-making fora of the organisation, as they bring together ministers from around the world to review the functioning international trade system and take action on future work. Given the effects of the pandemic on the international trade system, there is more at stake than ever before at this year’s conference.
A forum to regulate subsidies, manage vaccine equity and modernise the WTO
The next ministeral conference will be a defining moment for the WTO as multilateralism is increasingly called into question. MC12 offers an opportunity for world leaders to demonstrate ambition on multiple fronts, including on fisheries subsidies, equitable vaccine distribution and internal WTO reforms.
In terms of fish-related subsidies, an agreement has been in the making for twenty years. It would seek to eliminate subsidies for illegal, unreported and unregulated fishing, which is causing the overfishing of more than a third of the global stocks. If Trade Ministers reach an agreement on this front, it would be a powerful signal of the ability of the organisation to foster consensus.
A second priority must be to achieve worldwide vaccine equity: while developed countries can count on a steady supply of vaccines, low-income countries still face vaccination rates lower than one percent of their population. MC12 can serve as a forum to resolve practical issues such as lifting international barriers, addressing production bottlenecks and obtaining the necessary inputs to manufacture the vaccines. Until it has been tackled in all corners of the world, we will not be truly free from COVID-19, as the decision to postpone the conference in 2021 has underscored.
Finally, and perhaps most importantly, the MC12 is an opportunity to promote reforms to make the WTO fit for the 21st century. As American companies operating in Europe, we look to the EU and the US to play a leading role in driving some of the important changes. Key priority areas are strengthening the monitoring role of the WTO secretariat, revitalising the negotiating function and restoring the Appellate Body to full operation. By bringing other WTO members together, transatlantic partners can defend the multilateral trading system.
“As we approach the WTO MC12, we need to see more ambition from our global partners to work constructively and in spirit of compromise”
– Valdis Dombrovskis, European Commission Vice-President and Commissioner for Trade.
MC12: the return to multilateralism?
Despite the recent doubts cast on multilateralism, international cooperation culminated in almost 200 trade-facilitating measures by WTO members during 2020. Similarly, dispute settlement activity – regardless of the absence of an official mechanism – remains intense. Additionally, while some disagreements exist, discussions on e-commerce, investment facilitation for development or domestic regulation of trade in services remain a top priority.
Multilateralism goes way beyond trade. Just take tax regulation as an example: the efforts of the international community in Paris have led to concrete commitments at the OECD. In October over 130 countries reached a political agreement to reform the global corporate tax framework – known as the OECD Inclusive Framework Deal.
We must look at these achievements for inspiration and use the MC12 to address some of the more pressing trade issues. An efficient international trade system fuels economic growth, creates jobs, brings new technologies and raises living standards. For businesses, increased trade can grant access to new materials, markets and customers and encourage consistent innovation and self-improvement. And while it increases sales and profits for corporations, it also provides consumers with more choice of goods and services at higher quality and lower prices.
However, to truly reap the benefits of trade, we need a stable international trade system with a strong, well-functioning WTO at its heart. The WTO is essential to ensuring predictable market behaviours, preserve the rule of law and settle potential disputes. Without the stability that the WTO can bring, we risk putting in jeopardy the multilateral order. In an era defined by increased uncertainty across the globe, one thing remains certain: we must not turn our back on multilateralism.
Image credit: WTO (https://www.wto.org/english/res_e/photo_gallery_e/photo_gallery_e.htm)
More from AmCham EU on trade
- How trade can power the EU economy
- The transatlantic relationship
- Learn more about our Trade Committee