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100 days at the WTO: what have I learned?

| Updated: October 03, 2021 21:24:32


100 days at the WTO: what have I learned?

June 15th marked my first day at the World Trade Organization (WTO). After an initial discussion on strategic priorities with Director General Dr. Ngozi Okonjo-Iweala, I moved to my new lake-front office, ready to help the WTO deliver. As I immersed myself in the workings of the organization, met dedicated colleagues, government officials and business representatives, and engaged with outstanding teams, five things have come into focus during my first 100 days in office. And they will certainly keep us busy for months and years to come.

First, some context. Trade has stood strong in a world disrupted by the pandemic, geopolitical confrontations, technological changes, political headwinds and even the temporary blockage at the Suez Canal. Initial worst-case scenarios that projected a 30 percent annual downturn of the volume of world merchandise trade in 2020, did not materialize. The decline turned out to be slightly over 5 percent. Amid a rapid yet divergent growth trajectory, the latest WTO forecast sees goods trade increasing by 8 percent in 2021. Services trade, particularly in sectors more severely hit by the pandemic, has only staged a partial recovery. In the face of unprecedented strain, most supply chains proved resilient, including in the health sector.

The road towards recovery, however, continues to be bumpy and uncertain. A plethora of risks and perils, most immediately inequitable vaccine access, but also chip shortages, port congestions, increasing shipping costs, intensifying climate change events and rising poverty and inequality, constrains the ability of trade to support the recovery. Moreover, those same risks could further exacerbate trade frictions, deteriorating the trade and investment environment and depriving people in both advanced and developing economies, least-developed countries in particular, of much needed opportunities to safeguard their health and make a decent living for themselves and their families.

My first lesson is that WTO rules and disciplines have protected the world from very damaging measures. Restrictions imposed on food exports in the early days of the pandemic, for the most part, have been lifted, preventing any domino effect from happening. On medical gear, although bottlenecks persist, many have been addressed and countries have also taken action to facilitate trade. Governments have continued to come to the WTO to settle their trade disputes, even though appeals are no longer possible. Notification measures, however imperfect, have provided transparency as to what is going on in capitals.

Second, the need for enhanced trade cooperation at the global level is evident. How can manufacturing and distribution of vaccines reach everyone in the world expeditiously if cross-border movement of vaccine inputs and vaccines doses faces excessive red tape or is restricted? How can governments manage the adverse cross-border spillovers of subsidies, made yet more prevalent in the context of the pandemic, without clarification of rules in this area? How can small firms in the United States, Ghana or Laos leverage ecommerce to benefit from trade opportunities in the absence of a common framework to harness the full potential of digitalization for trade? How can countries and businesses transition to net-zero emissions and adapt to the impacts of rising temperatures without reducing trade barriers to green goods, technologies, and services? The impact of constructive national initiatives would be multiplied by international cooperation and understandings on these and other key trade-related issues.

Third, while the case for concerted trade action is strong, turning it into reality is trickier. A massive shift is under way in the structure of the global economy, with associated geopolitical competition and security concerns, complicating matters. Recognition that dialogue and negotiations at the WTO could nevertheless help sort out some underlying conflicts and strengthen norms to prevent future controversies, would itself lead to a more conducive environment to reach agreement. So would the restoration of a binding dispute settlement mechanism. Failure to engage today may make it more difficult to tackle some of these issues in the future.

Fourth, updating and reenergizing the global trading system is not a task that the WTO staff alone can undertake. It is for governments to agree to change the WTO to make it more relevant and more effective. Engagement by larger members is key, as is keeping the needs of the small and the poorest front and center. So too are creativity and flexibility. For example, if not among all, negotiations should take place among the willing. A ramped-up WTO secretariat could provide additional data and evidence, and possibly even options to inform negotiations. Under the direction of our leader, Dr. Ngozi, we have begun to move into new territory, bringing together relevant actors, including from the private sector, to coordinate expanded access to vaccines. But the bottom line is clear. Only governments can make the WTO work better.

Fifth, and finally, improved global trade cooperation is a powerful instrument to help the world move to a better place. But it is not enough. Domestic actions are needed so that the many not the few benefit from 21st century trade. Such measures are in turn critical to strengthen support for multilateralism.  

Understanding the lay of the land has been the primary goal of my first 100 days. The scale of the challenge before us is clearer to me now. Cynics will always find reasons why progress cannot be made. But I keep in mind Gandhi’s inspirational words about how, when faced with difficulties, his faith ran so much faster than his reason. I have met so many people who want to take the WTO forward and I am putting my faith in them. 

Ms Anabel González is from Costa Rica and now serving the WTO as Deputy

Director-General.

The piece is excerpted from www.wto.org

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