The Fish Are Not Amused

It has become standard procedure for the World Trade Organization’s (WTO) ministerial conferences to not only go down to the wire, but to go well beyond it and to crash and burn several times before ultimately agreeing to something. This year’s conference, which concluded Saturday morning Abu Dhabi time, was no exception. It started out with a wave of optimism on opening day but soon deteriorated into the usual grim test of wills between those that actually wanted to accomplish something—most of the members, thankfully— and a handful that were prepared to hold agreement on everything hostage unless they got their way on specific matters of interest to them. Despite the infighting and mutual recrimination, the ministers were able to accomplish a few things, though a preliminary view suggests it is pretty thin gruel.

WTO director general Ngozi Okonjo-Iweala implicitly acknowledged that in her post-conference spin when she said, “I see negotiations as a process. Of course, you know, it would have been great if we could finally close that . . . I think when we return to Geneva . . . the members will better understand what each other’s concerns and reservations are right from the top, from the ministers, and I think that will facilitate now moving in a better way than it did before.” In other words, we got very little done but at least we understand each other better. 

The main accomplishment, which as usual went down to the last minute, was another two-year extension of the moratorium on e-commerce taxation. It is now scheduled to expire March 31, 2026, or at the 14th ministerial conference, whichever comes first. This was not an easy decision, despite some 140 countries out of the 166 members indicating their support for it. India, South Africa, and Indonesia opposed an extension primarily because they want the money the taxes would bring into their treasuries. Developed countries that provide e-commerce services naturally supported an extension, and the last two times it has been debated, they have been successful in persuading many developing countries to join them on the grounds that e-commerce taxation could well be fatal to their small and medium-sized businesses, which are the core of their economies. While the business community is no doubt pleased with this outcome, there has been ongoing grumbling about the U.S.Trade Representative’s failure to demonstrate strong leadership on this issue, not just this week but throughout the past four years. Since there was a happy ending, there won’t be much recrimination, and it did seem that in the end, the administration had moved the extension up its priority list. Salvaging it again in two years, however, will be even more of an uphill struggle, and companies will be pushing to make sure this remains a high priority.

The biggest disappointment by far was the failure to agree on phase two of the fisheries agreement. This negotiation is now more than 20 years old, and overfishing has gotten steadily worse to the point where there is now concern about the sustainability of numerous species. Signs leading up to the conference provided some grounds for optimism. Many issues had been agreed to, but the issues of special and differential treatment (S&DT) for developing countries and phase-in periods for the obligations remained contentious and, in the end, sent the agreement to swim with the fishes. The main objector, again, was India. The United States supported the agreement but seemed to put most of its energy into trying to add a provision on forced labor. It’s hard to object to that, but the fish don’t care whether they’re caught by regular workers or forced workers. They’re dead either way. I hope we put as much energy into trying to save the entire agreement—and the fish—as we did into that particular provision, which also sank to the bottom.

The second biggest disappointment was agriculture, where little was expected but nothing was accomplished. India’s insistence on a permanent solution to the public stockholding issue, which many countries oppose, made agreement impossible. There is, however, for the first time a text which might become a basis for further negotiation.

On other matters, as expected, the dispute settlement negotiation ended with only an agreement to produce a full dispute settlement system by 2024, thus kicking the can for at least another 10 months. This is another area where the United States has failed to provide clear leadership, despite having caused the problem in the first place. An end-of-year solution had been the U.S. position from the beginning, so having gotten what it wanted, perhaps now it will be more forthcoming about what outcome it would like. Ministers also agreed to a declaration clarifying S&DT provisions for developing and least developed countries, something that had been 23 years in the making. Ministers representing 123 members also announced finalization of the Investment Facilitation for Development Agreement. This was not by itself controversial, but efforts to incorporate it formally into the WTO rules were blocked by India and South Africa, which have regularly objected to any agreements that include less than all the WTO members. These so-called joint statement initiatives—essentially coalitions of the willing—have gained in popularity as it has become more difficult to achieve anything by consensus of the entire membership. India did not block another one on domestic regulation of services, which involved 70 members, on the condition it not be considered a precedent.

Overall, this is really disappointing. Thanks to extending the e-commerce moratorium, we can say at least the conference did not go backwards, but that can hardly be considered a victory. Once again, progress was blocked by a handful of countries, most notably India, whose attitude seems to be, if they can’t get what they want, they’ll make sure nobody gets anything. This is not an attitude that bodes well for the organization.

William Reinsch holds the Scholl Chair in International Business at the Center for Strategic and International Studies in Washington, D.C.