From Paris to Nairobi – political will required

OP21 in Paris showed that multilateral solutions can be found to the world’s most pressing problems – if there is political will.  In contrast, expectations are low for a robust outcome from the World Trade Organisation (WTO) Ministerial meeting getting underway in Nairobi on 15 December.  That’s a shame – for New Zealand, for developing countries and for the multilateral trading system.  As the pre-eminent body of multilateral trade rules and the arbiter of global trade disputes, the WTO is critically important to all economies.

Today economies are looking to bilateral and regional agreements like TPP to boost trade growth.  While this approach furthers the trade liberalisation agenda, it risks leaving behind the world’s poorest countries, which need the WTO to provide the means for them to compete on a more level playing field in global trade.  It was precisely to foster a more inclusive approach to trade and investment that the WTO’s Doha Development Agenda, launched in Doha, Qatar in 2001 was dubbed a “development round”.

Unfortunately Doha has languished since Ministers came close but ultimately failed to conclude the round in July 2008. It now seems unlikely that the WTO members will be able to ratify even something so straightforward as the Trade Facilitation Agreement (TFA), concluded at last year’s Ministerial in Bali two years ago.  So far only 57 members (including New Zealand) have ratified and 108 ratifications are required to enable TFA to enter into force.  TFA is a no brainer – if this can’t be done, how will the WTO move on to more complex issues of relevance to the way global business is being done today?

From a New Zealand perspective a further problem with regional agreements like TPP is that they do not deal effectively with issues like agricultural and export subsidies which need solutions involving all trading partners.  Only a comprehensive outcome which delivers benefits for all participants is likely to achieve the consensus necessary to put an end to subsidies.

The world is also waiting for the Ministerial to take decisions on other key issues including a package of measures to assist development, liberalisation of environmental goods and services (which would clearly support the Paris COP21 outcome) and a future expansion of the WTO Information Technology Agreement (ITA) covering trade in electronic products.

Paris worked where an earlier gathering in Copenhagen didn’t because the world’s leaders have become increasingly aware that something needed to be done to address dangerous climate change.  Trade and development need the same medicine. Hopefully something of the ‘spirit of Paris’ can flow over to Nairobi to show that multilateralism can work as much for trade as it can for climate change.

This post was prepared by Stephen Jacobi, Executive Director of the NZ International Business Forum.