Geneva (AFP) – A weakened World Trade Organization will gather ministers in Yaounde next week as it seeks a road to reform, amid surging global trade tensions, US tariffs and disruptions caused by the Middle East war. The WTO ministerial conference, its supreme decision-making body, is usually held every other year. The stakes at the March 26-29 meeting in the Cameroonian capital will be particularly high, coming against the backdrop of the war raging in the Middle East and the WTO’s forecasts of dramatically slowing global trade growth. The difficult geopolitical situation should provide a “wakeup call,” showing “we need to maintain the system…to improve the system,” Director-General Ngozi Okonjo-Iweala said Thursday. “We really need to be that island of stability.”
Two years after the WTO’s last ministerial conference in Abu Dhabi failed to make meaningful progress on key issues like fisheries and agriculture, the organisation’s 166 members will be facing even stauncher challenges in Yaounde. Their main task will be to develop a plan towards reforming a WTO that has proven to be powerless in the face of rising protectionism and largely incapable of negotiating new agreements. “The situation is likely to be more tense than at previous ministerial conferences,” warned Petros Mavroidis, a Columbia Law School professor focused on WTO law. Success in Yaounde would be surprising, he said, adding that the conference would be more about “limiting the damage.”
The WTO, which regulates large swathes of global trade, has been facing increasing pressure to overhaul rules considered by many as outdated and unable to keep pace with a rapidly changing world. “I don’t think the status quo is an option,” Okonjo-Iweala recently said, insisting the Yaounde meeting should mark “a turning point.” The European Union also warned in a recent submission that the organisation was “at a critical and, in fact, an existential juncture,” while Britain cautioned that “without reform, it will slide into irrelevance.” Swiss ambassador to the WTO Erwin Bollinger agreed, warning that a loss of relevance by the WTO could “lead to more fragmentation of the trading system.”
Yaounde will mark the WTO’s first ministerial conference since Donald Trump returned to the White House last year, unleashing a barrage of attacks on multilateralism and WTO rules with sweeping tariffs and bilateral trade deals. “The Americans have effectively withdrawn from the WTO,” Pascal Lamy, who headed the organisation from 2005 to 2013, told AFP. “They are not respecting any of the rules they agreed to.”
Washington has not held back in its criticism of the WTO. “The United States has serious concerns with the trading system embodied by the WTO, given that the system has overseen and contributed to a world of severe and sustained imbalances,” Washington said in a submission to the organisation. US ambassador to the WTO Joseph Barloon said last week that his country rejects the current WTO reform proposal. Washington is particularly critical of the WTO’s “most-favoured nation” (MFN) principle, which aims to extend any trade advantage granted to one trading partner to all others, in a bid to avoid discrimination. The United States told the WTO last December that it considers the principle “unsuitable for this era.” The EU has also said it would be appropriate to reflect “on the role of the MFN principle in today’s context.” But China, like other developing countries, said it wants this rule to “remain the bedrock of the WTO.”
The organisation faced structural and geopolitical obstacles and calls for reform long before Trump returned to power. It has long been handicapped by a rule requiring full consensus among members, meaning decisions are few and far between. Its dispute settlement system has also been crippled since 2019 by the United States blocking the appointment of new judges, even as Trump’s aggressive trade policy has increasingly blurred the line between trade and national security concerns. “WTO is under tremendous pressure,” a Western diplomat told AFP, asking not to be named. “We’ve never seen the system being challenged as it is right now.” Hamid Mamdouh, a former high-level WTO official, agreed. “With the Trump Administration’s actions and all the uncertainties they caused to international trade, there is a much higher sense of crisis now within the international trade community and, of course, in the WTO,” he told AFP.
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