By David Lawder
WASHINGTON (Reuters) – U.S. Trade Representative Katherine Tai has a vision for reforming the World Trade Organization: rekindling the dynamism that marked its creation in 1995, when countries were committed to hashing out grievances and seeking compromise as they shaped the global trading system.
Her problem is getting past the entrenched positions and competing national interests – including those of the United States – that have kept the organization from evolving over the past quarter of a century, trade experts say.
Tai recently told reporters that the WTO, which was established to regulate and facilitate international trade, cannot return to its prior status quo and needs new vision and energy to stay relevant in a rapidly changing global economy.
“My vision for WTO reform is that WTO members come to Geneva or wherever it is that they might convene and bring their honest selves,” Tai said. Members should “be prepared to fight for the vision of the WTO that” they want.
Tai is bringing that outlook to a four-day WTO ministerial meeting that begins on Tuesday against the backdrop of a global trading system scarred by the coronavirus pandemic and the tumult of the trade wars launched by former U.S. President Donald Trump during his four years in office.
Trump, who was skeptical about free trade and multilateral agreements, had threatened to withdraw from the organization. The WTO’s dispute settlement system was paralyzed two years ago by U.S. opposition to Appellate Body judge appointments, with Washington arguing that the body had overstepped its mandate.
Tai has repeatedly voiced the Biden administration’s commitment to the WTO and has sought to engage with U.S. allies on reforms for the organization.
“She’s saying all the right things. She’s underscoring the importance of a well-functioning WTO,” said Wendy Cutler, a former USTR negotiator and current director of the Asia Society Policy Institute in Washington. “The question is whether the U.S. is playing the leadership role to help broker these deals, as it has done in the past, and perhaps that’s not as evident as it used to be.”
ELUSIVE CONSENSUS
Two issues are seen as high priorities for the first ministerial meeting under new WTO Director-General Ngozi Okonjo-Iweala – a long-sought deal to curb harmful fishery subsidies and a waiver of intellectual property rights for COVID-19 vaccines. (See Factbox https://www.reuters.com/markets/deals/what-could-wto-ministerial-conference-achieve-2021-11-23)
Pressure for the latter is building from India and other developing countries, along with activist groups, with some WTO members said to be threatening to block progress on other issues without a vaccine waiver.
Tai in May announced U.S. support for the waiver to allow more widespread vaccine manufacturing in developing countries, but negotiations over it have deadlocked amid opposition from Switzerland, Britain and some other European countries.
In the fishery subsidies negotiations, Tai is pushing a U.S. proposal to ban subsidies for fishing fleets that use forced labor, including an explicit recognition that it is a problem. The demand has drawn opposition from India and other developing nations.
Jamieson Greer, who was USTR chief of staff during the Trump administration, said he doesn’t see Tai backing down from that demand given the Biden administration’s focus on workers’ rights, so his expectations are low.
“We’re looking at the WTO ministerial that doesn’t have many, if any, consensus documents or outcomes,” said Greer, who is now a trade lawyer with King and Spalding in Washington. He added that these may be replaced by plurilateral statements, which would not necessarily be considered a failure.
“I think it probably will underscore that the WTO cannot solve a lot of these intractable problems.”
Okonjo-Iweala told reporters on Thursday that she hopes the increased U.S. engagement spearheaded by Tai can bring parties together toward compromise, especially on COVID-19 and the fisheries issue.
HARD CHOICES
Tai has yet to engage in major multilateral negotiations, but since taking office in March, she has managed to score some bilateral trade victories, including deals with the European Union to end a 17-year aircraft subsidies dispute and ease U.S. steel and aluminum tariffs with duty-free quotas for European producers.
Cutler, who led numerous negotiations for USTR until November 2015, including on a Pacific Rim trade deal that Trump later abandoned, said the WTO ministerial meetings are working negotiating sessions where outcomes are not prearranged.
“My experience is that in negotiations like this, a lot is done in the last week when ministers are there,” she said. “I think it’s too early to write the obituary for the WTO. Anything can happen that week, and when ministers get together and when they’re faced with some hard choices, that’s when compromises sometimes get reached.”
(Reporting by David Lawder; additional reporting by Emma Farge, Philip Blenkinsop and Andrea Shalal; Editing by Paul Simao)
