2024-04-17 14:50:09
Exactly thirty years ago, in April 1994, the Marrakech Agreement was signed which concluded a cycle of trade negotiations, the Uruguay Round, initiated under the aegis of the GATT (General Agreement on Tariffs and Trade). The World Trade Organization (WTO) was established, and, unlike the GATT, it had the status of an international organization. Furthermore, it extended its skills to services (GATS or AGCS) and intellectual property (TRIPs or TRIPS). In addition, the old dispute resolution procedure was reformed, to prevent “respondent” members from blocking it.
A combination of historical circumstances had been necessary to arrive at this point. The fall of the Berlin Wall and the end of the USSR opened the way to a democratic and liberal “end of history” where, it was thought, free trade would ensure peace and prosperity. Even China, despite the Tian’anmen massacre (1989), seemed determined to play the game of multilateralism by negotiating its accession to the WTO.
The incarnation of doctrinaire free trade for its opponents
However, everything was not so simple. President Clinton had to fight to have the Marrakesh Accord ratified in his country. The Republican opposition feared that the application of this agreement would contribute to undermining the sovereignty of the United States.
The Marrakech Agreement proposes a framework which should then be filled in, in particular with questions relating to services without forgetting agriculture, the eternal pitfall of trade negotiations. Many subjects, more or less linked to international exchanges, remained to be discussed: dumping social, unfair competition, public procurement, direct investments, customs formalities. A new round of negotiations therefore had to be opened quickly to deal with it.
However, the WTO will very quickly be considered by its opponents as the incarnation of doctrinaire free trade and not a kind of UN dedicated to preventing trade wars. The riots which accompanied the Seattle Ministerial Conference (1999) confirmed that the journey of the young organization would not be that of a long, quiet river. The opening of the cycle will be decided two years later at the Doha Conference, convened just a few weeks following the attacks of September 11, 2001.
Despite a more peaceful climate, consensus was only obtained by postponing to the following Conference the inclusion on the agenda of the so-called Doha cycle of certain themes, notably the “Singapore subjects” – supported by the industrial countries but refused by emerging countries (competition, public markets, investments, trade facilitation).
Contestation of American-European leadership
The Cancun Conference (2003) in turn failed. We are then witnessing the first burst of brilliance of what we do not yet call the “global South”. The emerging countries, grouped in a coalition led mainly by Brazil and India and, more discreetly, by China (joining the WTO in 2001), affirm their rejection of the American and European leadership which had dominated previous cycles.
From then on, the United States lost interest in the negotiation. However, the 2007/2008 crisis is a reminder of the need for multilateralism. The G20, which brings together the large emerging countries and the old industrial powers, does not fail to call for a rapid conclusion of the Doha round, which no one believes in.
After this interlude, the invasion of Crimea, Chinese toughening, the slowdown in international trade, the failures of the global value chain, the « Made in the World » de l’OMCthe climate threat, the rise in inequalities, the deindustrialization of old powers, are accelerating the obsolescence of the Doha program and revive protectionist reflexes.
Emergence of plurilateralism
Whereas, during its first fifty years of existence, the GATT had completed eight rounds of multilateral negotiations, the WTO in thirty years will not have concluded any! The Doha Round, never officially completed, will slowly be forgotten. Ultimately, only an agreement on trade facilitation (the only “survivor” of the subjects of Singapore) which entered into force in 2017 and another, very timid, on fishing subsidies which remains to be ratified by a sufficient number of members.
Weak results but with a positive element: de facto, these two agreements were able to free themselves from the strict multilateralism which imposed consensus for a more realistic “plurilateralism” which only requires the support of two thirds of the members. In any case, the WTO has failed in its first mission: to supervise multilateral negotiations.
The multilateralism of the GATT and then the WTO is based on non-discrimination in trade between members. On the one hand, the same customs regime for one member must be applied to all the others (so-called most favored nation or MFN clause). On the other hand, once the product has cleared customs, it must be treated like local products (national treatment).
The WTO gradually marginalized?
Today, the MFN clause only applies to an increasingly small part of international trade. The reasons ? The preferences and exceptions granted to developing countries (otherwise poorly defined) and, above all, the proliferation of free trade treaties under GATT Article XXIV (and GATS V) which are exceptions to the MFN clause . From 38 in 1994, there will be 367 at the end of 2023.
Indeed, from the 1990s, many members, including the United States and the European Union, opted for this type of agreements, first regional and then, more and more often, intercontinental (like CETA between the EU and Canada).
Failing to be negotiated at the WTO, trade liberalization and regulation are increasingly done in bilateral negotiations that are themselves long and difficult. These treaties often introduce “new subjects” neglected or ignored by the WTO, putting their primary function into perspective, which is the reduction of customs duties.
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Described as “new generation” agreements by the EU or deep integration (deep integration) by economists, they more and more frequently include Singapore subjects, social and environmental clauses and a multitude of other themes more or less linked to trade. They contribute to marginalizing the WTO which only controls these agreements symbolically.
One of the great advances in international politics and law was the dispute settlement procedure. In the WTO, unlike the GATT, it becomes de facto automatic when a complaint is filed by a member of the organization. Ultimately, the organization can authorize sanctions if the “respondent” does not follow the requirements of the Appellate Body within a “reasonable period”.
600 complaints filed
For supporters of multilateralism, the procedure was a success: 623 have been filed over 30 years. But for its adversaries, whether they come from the anti-globalization left or the sovereignist right, the Appellate Body would have arrogated to itself an abusive supranational power. What legitimacy might its seven judges claim to interpret the treaties and impose their jurisprudence? With the return of isolationism helping, the United States, which does not hesitate to use extraterritoriality, has never come to terms with this “exorbitant” power which sometimes had the presumption to disavow them.
Failing to impose reform of the dispute settlement procedure, the United States took advantage of the consensus rule to refuse the appointment of new judges to the Appellate Body. Since December 2019, appeals have been made “in a vacuum” making any final judgment and therefore any possible sanction impossible.
The two major functions of the WTO, international trade negotiations and the dispute settlement procedure, have today become ineffective, as confirmed by the failure of the 13th WTO Ministerial Conference in Abu Dhabi (26 February – March 2, 2024). The current geopolitical instability and the strong protectionist push reactivated under the Trump presidency do not leave much hope even though the energy and environmental transition, the digital revolution or even food and health insecurity would require multilateral cooperation that The WTO would be intended to orchestrate.
After having repeatedly announced its death a little prematurely, the great institutional innovation that was the WTO ended up entering a sort of brain death.
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