Economic Policy Seminar Short Report

Tiago  Matos  (14410161)  HEC  Lausanne  

 “What  future  for  WTO  Multilateral  Negotiations?”(Frédéric  Payot)  

 The  World  Trade  Organization  (WTO)  is  an  organization  that  intends  to  

supervise   and   liberalize   international   trade.   Essentially,   the   WTO   is   a   place  where  member  governments  go,  to  try  to  sort  out  the  trade  problems  they  face  with  each  other.  At  its  center  are  the  WTO  agreements,  negotiated  and  signed  by  the  majority   of   the  worlds   trading  nations.   These  documents  provide   the   legal  ground-­‐rules  for  international  commerce.  This  traduces  essentially  in  contracts,  binding  governments  to  keep  their  trade  policies  within  agreed  limits.    

Currently,   the  organization   faces  an   impasse  attempting  to  complete   the  negotiations   of   the  Doha   Round,  which  was   launched   in   2001  with   an   explicit  focus   on   addressing   the   needs   of   developing   countries.   The   reasons   for   this  impasse  can  be  explain  by  the  awareness  of  the  implications  of  the  commitments  that  countries  undertake  in  the  WTO.  The  perpetual  nature  of  the  commitments  and   the   trade   action   by   other  Members,   if   the   undertaking   agreements   do   not  live  up   to   its   commitments   lead   to   a   resistance   to  pressures   and  unreasonable  demands   by   other   countries.   It’s   important   to   put   emphasis   on   the   poor  economic   environment   since   2008   in  major   developed   economies   resulting   in  high  rates  of  unemployment  and  this  could  traduce  in  some  resilience  to  accept  new  trade  liberalization.  Unlike  in  the  past,  Developed  Countries  are  not  able  to  steer  the  negotiations  in  a  desired  directions  because  of  the  reasons  mentioned  above  as  well  as  the  formation  of  a  number  of  issue-­‐based  Developing  Countries-­‐alliances,  which  lead  to  a  deadlock.  

This   variety   of   geopolitical   and   economic   circumstances   has   made  decision-­‐making  at  a  multilateral  level  difficult  to  governments.  As  a  result  many  governments   are   now   turning   to   plurilateral   agreements   in   an   effort   to   try   to  open  trade  in  a  way  that  they  can’t  do  at  WTO  in  a  multilateral  way.  This  is  not  new   for   the   WTO,   since   it’s   formation   there   has   been   a   proliferation   of   non-­‐multilateral   agreements   and   the   WTO   itself   can   be   considered   as   a   set   of  plurilateral   agreements   since   does   not   involve   all   countries   in   the   world.  Previous   multilateral   trade   rounds   suggest   that   plurilateralism   might   carve   a  path  back  to  multilateral  negotiation  level.  Even  if  it  is  possible  the  problem  may  be  that  the  multilateral  round  has  to  incorporate  a  set  of  norms  that  are  reached  outside   of   the  multilateral   level  where   all   voices   can   be   heard.   It’s   consensual  that   the   outcome   of   the   plurilateral   agreements   should   feed   across   the   board  members   on   a   MFN   basis   (Most   Favoured   Nation   Clause).   But   plurilateral  problems  arise  when  members  begin   to  use   them  as  a   tactic   to   run  away   from  the  hard  decisions  they  need  to  make  and  this  could  turn  in  a  stumbling  block  to  the  organization.  

Multilateralism   must   be   revived   at   a   time   of   stalled   unilateral  liberalization  and  fearful  protectionism  in  the  wake  of  the  global  financial  crisis,  and  a  proliferation  of  bilateral  and  regional  trade  agreements.  The  onus  should  be  on  plurilateral  negotiations,  preferably  within   the  WTO   framework  and  one  might   think   that   in   a   long-­‐term   basis   they   will   end   up   being   a   multilateral  agreement.  That  is  probably  the  best  hope  for  trade  multilateralism  today.