WTO ministerial must mend the fractured trade order

With dispute settlement paralysed and trust shaken, the WTO ministerial must strive to forge global trade cooperation.

As the World Trade Organisation (WTO) prepares for its ministerial meeting in Abu Dhabi from 26 to 29 February, the atmosphere is not one of optimism, reflecting an unease within the global trading community. With the event just round the corner, the mood among WTO members is sombre, underscoring the challenges that lie ahead. This sentiment is aptly captured in reports and discussions on dispute settlement reform.

The WTO ministerial takes place against a backdrop of significant geopolitical tensions and supply chain disruptions, notably the blockage of the Red Sea and Suez Canal by Iran-backed Houthi rebels. This situation exemplifies the fragility of global trade routes and underscores the urgent need for robust, resilient international trade frameworks. The United Arab Emirates (UAE), seeking to position itself as a mediator and a digital and data hub, seeks to navigate these troubled waters while emphasising the importance of trust and modest progress within the WTO framework.

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Modest ambitions for WTO ministerial 

Under the stewardship of Thani bin Ahmed Al Zeyoudi, the UAE’s minister of state for trade, the ministerial meeting is setting its sights on achievable goals. A significant focus is the restoration of trust in the WTO and the creation of a roadmap for reforming its dispute settlement system which is currently paralysed by the United States’ blockade against the appointment of new judges to the appellate body. This paralysis is symptomatic of deeper issues within the WTO, reflecting broader disagreements among its members on key issues like fisheries subsidies, agriculture, and environmental negotiations.

The challenges facing the WTO are manifold. The United States’ stance on the dispute settlement mechanism, and India’s resistance to adding non-trade issues on WTO agenda have hampered the organisation’s ability to function effectively. Additionally, China’s engagement in WTO discussions, while active, has not translated into substantive concessions, and the European Union’s push for environmental measures outside the WTO framework further complicates the pursuit of a unified agenda. This situation is exacerbated by the lack of consensus on dispute settlement reform, as highlighted in recent discussions that reveal deep divisions on how to advance this crucial agenda.

Realism and incremental progress

The reports paint a picture of an organisation at a crossroads, struggling to redefine its role in a rapidly changing global scenario. The Abu Dhabi ministerial, therefore, is not just about specific policy outcomes but about rekindling faith in the multilateral trading system. Achieving this will require acknowledging the limitations of the current context while striving for incremental progress — be it through formalising discussions on dispute settlement reform or fostering a more inclusive, member-driven approach to addressing the myriad challenges facing global trade.

As the WTO members convene in Abu Dhabi, the path to revitalising the organisation is fraught with obstacles. Yet, the very act of meeting amid such challenges is a testament to the enduring importance of the WTO as a forum for international cooperation. The modest ambitions for the ministerial reflect a pragmatic recognition of the current geopolitical and economic realities. They also underscore the urgent need for collective action and compromise among the world’s trading nations.

The WTO is burdened by internal discord and challenged by a rapidly changing global trade scenario. The ministerial meeting carries the weight of revitalising the organisation, with dispute settlement reform at the forefront.

WTO system is central to resolving trade disputes between nations, and is currently paralysed by the blocking of appointments to the appellate body by the US. Reforms require navigating deep divisions among members which disagree on everything from non-trade issues like fisheries subsidies to China’s engagement and the EU’s push for environmental measures outside the WTO framework.

Formalising discussions on dispute settlement, fostering inclusivity, and acknowledging limitations are key steps. Success will not hinge on grand pronouncements but on concrete actions rebuilding trust and functionality. It is a chance to reaffirm the WTO’s relevance, even as it charts a course through the complex realities of the 21st century.

The success of the Abu Dhabi ministerial will not be measured by grand declarations, but by the concrete steps it takes towards restoring functionality and trust in the WTO. In this regard, the meeting stands as a crucial opportunity to reaffirm the relevance of the WTO in the 21st century, even as it highlights the formidable challenges that lie ahead.