EU secures results at WTO Ministerial but important work remains to reform global trade rulebook

This article is brought to you in association with the European Commission.

The European Commission was instrumental in brokering important outcomes at the 13^th ministerial meeting of the World Trade Organization (MC13) that ended Friday in Abu Dhabi. After a week of intense engagement, EU negotiators secured important agreements on e-commerce, new rules to improve global services trade, environmental cooperation, and strengthening the position of developing countries in the global trading system.  

However, over the past months, the EU had worked for ambitious results to revitalise the WTO at a time of rising geopolitical tensions, including a comprehensive agreement on global fisheries subsidies, agriculture reform, and meaningful progress on dispute settlement. The EU regrets that, despite willingness by a large majority of WTO members, it was not possible to find compromises on these issues.  

E-COMMERCE REMAINS DUTY FREE 

WTO Members agreed to renew the “e-commerce moratorium” until MC14, maintaining duty free trade in online services, including apps, games and software, as well as digitally transmitted content such as music, video, and other digital files. The EU invested considerable time and political effort to build a coalition in favour of this extension, which will help the growth of an already booming global trade in digital services. The e-commerce moratorium has been in place since 1998 and is crucial for businesses – notably SMEs – and consumers around the world, enabling them to engage in electronic commerce and to access electronic services more cheaply and easily. It is also key for businesses in developing countries to expand globally. Digital trade already accounts for close to a quarter of global trade and will only continue to grow in importance. The EU will continue to develop efforts at the WTO towards creating a more inclusive, predictable, and rules-based global trading system that is fit for the digital economy, including seeking a long-term solution for customs duties on electronic transmissions. 

BOOST FOR GLOBAL TRADE IN SERVICES 

The EU welcomed the entry into force of new rules to facilitate and simplify trade in services. Businesses will now enjoy clear, predictable and effective authorisation procedures in more than 71 markets. The EU was at the forefront of this initiative, which will support economic growth for us and our partners in the largest and fastest growing sector of today’s economy. 

SUPPORTING DEVELOPMENT  

The EU played a leading role in delivering outcomes that will integrate developing countries more firmly into the global trading system.  123 WTO Members finalised a deal to facilitate investment and support development. This new Agreement on Investment Facilitation for Development (IFD) aims to harness the economic potential of foreign direct investment to boost development in poorer countries. The next step will be to incorporate this agreement into the WTO rulebook. The accession of two new members – Timor Leste and Comoros – to the WTO this week, highlights the value countries around the world still place on a shared global rules base for trade and investment. Ministers also adopted a decision to help least developed countries as they graduate to a higher level of development.  Beyond supporting least developed members, WTO members took a step towards improving clear and effective implementation of special and differential treatment for all developing countries in the key areas of standards for market access. 

ENVIRONMENT & SUSTAINABILITY 

Important progress was made at MC13 on the contribution of trade to environmental sustainability, taking forward work on tackling plastics pollution, phasing out fossil fuels and promoting the circular economy, among others.  

The Coalition of Trade Ministers on Climate met under the co-leadership of the European Commission to discuss policies on driving decarbonisation. Ministers from 61 countries also adopted voluntary trade-related actions to tackle the climate crisis. 

NO DEAL ON GLOBAL FISHERIES SUBSIDIES

The EU deeply regrets that a handful of WTO members blocked a comprehensive agreement on global fisheries subsidies. A deal was on the table to build on the outcome reached at the 12^th Ministerial Conference, and fulfil the mandate set by the UN Sustainable Development Goal 14.6 to ban harmful fisheries subsidies worldwide.  

The EU worked with partners from across the development spectrum to find common ground for a robust deal to expand the rules to prohibit subsidies that contribute to overcapacity and overfishing. 

INDUSTRIAL POLICY 

We regret that there was no agreement at MC13 to launch deliberations on key trade challenges (Trade and Industrial Policy, policy space for industrialisation, Trade and environment) despite such a deal being supported by the EU and a majority of other delegations. The blockage of this future-oriented agenda by a small number of countries is a setback that weakens the role of the WTO as a key forum to address contemporary challenges. 

Further international cooperation will continue to be necessary to address these issues, and the EU will maintain its leadership role in this respect. 

NO AGREEMENT ON AGRICULTURE

Despite the constructive and pragmatic engagement of the EU and other Members to find compromises towards an agreement, the WTO Members could not agree on advancing agriculture reform at MC13. The divergences across the membership were too large to be solved. This failure is unfortunately to the detriment of the most vulnerable countries who count most on the multilateral trading system.  

DISPUTE SETTLEMENT REFORM 

AT MC13, WTO members recognised the progress made – and reaffirmed their commitment to finding agreement to restore – a fully functioning dispute settlement system by the end of 2024. The EU has consistently called on the WTO membership to make headway on reforming the dispute settlement system, which is critical to the WTO’s overall legitimacy and to stopping the erosion of trade rules. It is also vital in providing stability for companies to invest and export.  However,  a solution still needs to be found on a reformed appeal system.   

SOLIDARITY WITH UKRAINE  

Trade ministers from around the world expressed support for Ukraine at a Solidarity Event,  hosted by the EU in the margins of the Ministerial Conference. The event marked the two years since the start of the full-scale war of aggression by Russia against Ukraine. Remembering the victims of the war, WTO Members in attendance reaffirmed their continued support for Ukraine as they called for the end of the war.  

Quote(s)

At a time of rising geopolitical tensions and political uncertainty, I welcome that MC13 delivered some positive results for the global trading system. The EU led from the front in all these outcomes, working with partners from around the globe. The decision to extend the e-commerce moratorium, in particular, is crucial for digital trade – a key growth area in the global economy and a top priority for the EU. We also made important progress on development and sustainability, to the benefit of all members. However, we were disappointed at the lack of breakthroughs in a number of important areas. The EU engaged intensively to find deals on fisheries subsidies, agriculture package and a dynamic WTO reform agenda. Agreements were within reach, supported by an overwhelming majority of members, but ultimately blocked by a handful of countries – sometimes just one. The EU will continue to actively support work on a more inclusive and fit-for-purpose global trade rulebook and to show leadership and engagement. We hope all our partners will replicate this can-do approach.

Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade