WTO pushes for reform, warns multilateralism 'under attack'

ABU DHABI — The World Trade Organisation (WTO) pushed for reform at a high-level ministerial meeting in Abu Dhabi on Monday, warning that economic headwinds and geopolitical tensions are threatening global commerce and multilateral trading systems.

The WTO's 13th ministerial conference (MC13), scheduled to run until Thursday in Abu Dhabi, the capital of the United Arab Emirates, is the first in two years.

The WTO is hoping for progress, particularly on fishing, agriculture and electronic commerce.

But big deals are unlikely as the body's rules require full consensus among all 164 member states — a tall order in the current climate.

Speaking on the first day of MC13, WTO Director General Ngozi Okonjo-Iweala said that "multilateralism is under attack", highlighting a need to "reform the multilateral trading system" and boost international cooperation.

"Looking around, uncertainty and instability are everywhere," the WTO chief said, adding that the world is in an "even tougher place today" compared to two years ago when WTO trade ministers last met.

Okonjo-Iweala did not name countries, but tensions have risen between the West on one side and Russia and China on the other in recent years.

The war in Gaza and related attacks by Yemeni rebels on ships in the Red Sea have added to the challenges.

Reiterating warnings that signs of "fragmentation" are appearing in the global economy, Okonjo-Iweala said trade volumes for 2023 likely fell below the WTO's October forecast. Trade volumes may also not reach WTO's growth estimates for this year, she added.

"If we fragment, it will be very costly to the world, both developed and developing countries," Okonjo-Iweala said.

"Cooperation and trade is vital. If we didn't have it, it would be very difficult for parts of the world to adjust."

'Need to evolve' 

The WTO chief's push for reform was echoed by UAE Minister of State for Foreign Trade, Thani bin Ahmed Al Zeyoudi, who said he hoped MC13 would serve as a "launch pad" for necessary reforms.

"The world has changed. And institutions like the WTO need to evolve too," European Trade Commissioner Valdis Dombrovskis said on Monday, adding that "geopolitical tensions are on the rise. We are faced with crises wherever we look."

During the WTO's last ministerial meeting, held at its Geneva headquarters in June 2022, trade ministers nailed down a historic deal banning fisheries subsidies harmful to marine life and agreed to a temporary patent waiver for COVID-19 vaccines.

They also committed themselves to re-establishing a dispute settlement system that Washington had brought to a grinding halt in 2019 after years of blocking the appointment of new judges to the WTO's appeals court.

"Our challenge this week is to... demonstrate that MC12 wasn't a one-off miracle," Okonjo-Iweala said.

"I have seen the US engage more and I have to say they have been quite constructive," she told a press conference, dismissing claims of an American leadership vacuum.

The WTO faces pressure to eke out progress on reform in Abu Dhabi ahead of the possible re-election later this year of Donald Trump as US president.

During his four years in office from 2017 to 2021, Trump threatened to pull the United States out of the trade body and disrupted its ability to settle disputes.

"There will be the US elections in November... so this is the last chance," a diplomatic source in Geneva told AFP on condition of anonymity.

Reform agenda 

On Monday, US Trade Representative Katherine Tai said "reform is squarely on the agenda for this week".

That includes "dispute settlement reform, where the goal is not just to go back to the way things used to be, but rather to provide confidence that the system is fair", she said in a statement.

But Marcelo Olarreaga, economics professor at the University of Geneva, said the other members of the WTO "cannot expect huge concessions" from the administration of US President Joe Biden in an election year.

While there is doubt over progress at the WTO on key issues, there is hope for advances on a new global agreement on tackling fisheries subsidies.

After striking an agreement in 2022, which banned subsidies contributing to illegal, undeclared and unregulated fishing, the WTO hopes to conclude a second deal, this time focusing on subsidies that fuel overcapacity and overfishing.

"We are within sight of ratifying the fisheries subsidies agreement," Okonjo-Iweala said on Monday.