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U.S. Expresses Dissatisfaction with WTO at Ministerial Meeting

In his opening statement at the World Trade Organisation’s 11th ministerial meeting that was recently held in Buenos Aires, U.S. Trade Representative Robert Lighthizer enumerated concerns that have helped throw the WTO’s future into doubt. The Trump administration’s critical approach toward the WTO, spurred by a belief that it treats the United States unfairly, slowed the organisation’s work in 2017 and significantly lowered expectations for the bi-annual meeting.

Lighthizer called the WTO “an important institution” but said it has “serious challenges.” One is that “too often members seem to believe they can gain concessions through lawsuits that they could never get at the negotiating table.” Lighthizer questioned whether this is good for the WTO and whether the current litigation structure makes sense. This position perhaps explains why the United States has refused to approve new judges to sit on the WTO’s Appellate Body, which observers have warned risks severely slowing a number of important dispute resolution cases.

As an example of what the White House perceives as unfair treatment, Lighthizer said “there is something wrong … when five of the six richest countries in the world presently claim developing country status,” which allows them to defer or avoid complying with some WTO rules. If these countries, along with “the vast majority of WTO members,” believe following the rules makes it harder to achieve economic growth, “then clearly serious reflection is needed.” Continuing the theme of enforcement, Lighthizer said it is “impossible to negotiate new rules when many of the current ones are not being followed,” perhaps suggesting the United States will not participate in additional negotiations until its concerns on enforcement are addressed. He noted that the United States is pushing to “correct the sad performance of many [WTO members] in notifications and transparency,” which he accused some countries of intentionally circumventing.

In addition, Lighthizer indicated that the United States will seek to refocus the WTO on addressing challenges to making markets more efficient. For example, the United States is interested in revitalising the standing bodies to ensure they are focused on new challenges such as chronic overcapacity and the influence of state-owned enterprises. The United States is also working with other WTO members in committees and elsewhere to address real-world problems.

The ministerial meeting concluded on 13 December with a commitment from members to secure a deal by the end of 2019 on comprehensive and effective disciplines that prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing and eliminate subsidies that contribute to illegal, unreported and unregulated fishing. This commitment is in line with a September 2015 UN Sustainable Development Goal that sets a 2020 deadline for eliminating IUU subsidies and prohibiting certain forms of fisheries subsidies, with special and differential treatment for developing and least-developed countries.

The ministers also agreed to extend for two more years the practice of not imposing customs duties on electronic transmissions as well as the practice that prevents WTO members from pursuing non-violation cases under the WTO’s intellectual property agreement. However, the WTO indicates that no agreement was possible in a number of substantive issues, including public stockholding for food security purposes. WTO Director-General Roberto Azevêdo expressed disappointment at the lack of final substantive agreements at the conference but was optimistic about the future, observing that members have “the seed of an organisation which can work better” and be “vibrant, flexible and nimble.”

Lighthizer declared at the conclusion of the meeting that the Buenos Aires ministerial “will be remembered as the moment when the impasse at the WTO was broken,” as he reiterated the willingness of the United States to work with like-minded members on e-commerce, scientific standards for agricultural products, and the challenges of unfair trade practices that distort world markets.

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