We zoom in on the MC13 WTO conference, which kicks off this week. What is at stake?
This article has been taken from "The Customs Manager", our weekly Compliance & Cost-Saving Magazine - Edition 07- 2024 - Week 08. To read all the law, guidance, and policy updates on customs & global trade covering the EU, U.S. and the UK, please see here.
The Ministerial Conference, the highest decision-making body of the WTO, is a crucial event that typically convenes every two years. It serves as a platform for all WTO members, which are countries or customs unions, to come together. The Ministerial Conference can decide on all matters under any multilateral trade agreement. This event will be attended by ministers from around the globe, who will be reviewing the performance of the multilateral trading system and shaping the future work of the WTO.
(Un-)Lucky 13!?!
This is the 13th time the Ministerial Conference (MC13) meets, from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirates. We hope that this will not be an unlucky number. What is at stake?
Will countries soon slap customs duty on electronic transmissions?
One of the critical discussions at MC13 revolves around renewing the electronic transaction customs duty moratorium. WTO members have routinely agreed not to impose customs taxes on electronic communications until "the next Ministerial Conference". This is known as the "moratorium on electronic transmissions. This issue has divided the WTO, with some arguing that the moratorium has stabilised digital commerce, while others express concerns about the implications of electronic transfers. Four suggestions are now being proposed for MC13, and the outcome is uncertain. Electronic communications may face customs tariffs if the WTO cannot extend the moratorium. This is a prime example of how the decisions made at the Ministerial Conference can directly impact all of our lives. Or would you like to pay customs duty for your next "electronic transmission"?
Smells Fishy!
The World Trade Organization (WTO) focuses on curbing harmful fisheries subsidies at the 13th Ministerial Conference. The WTO adopted the Agreement on Fisheries Subsidies at the last Ministerial Conference, which prohibits government support for illegal, unreported, and unregulated fishing. At this conference, negotiations are ongoing to formulate additional disciplines targeting subsidies contributing to overcapacity and overfishing at MC13. The WTO will try to reach two-thirds of WTO members to finalise their 2022 commitment to ensure the Agreement enters into effect. Over half of the 110 acceptances are in, and many members want to deposit instruments at MC13. Ministers at MC13 will utilise a chair-provided negotiating text to narrow lingering gaps in their views to complete discussions in Abu Dhabi.
Reform or Die!
Is this the last chance for the WTO? For years, the WTO has been paralysed in its essential decision-making body. At their 12th Ministerial Conference in June 2022, WTO members agreed to review the organisation's functions to better respond to challenges and opportunities in global trade. They adopted an MC12 Outcome Document, committing to a fully functioning dispute settlement system by 2024. The dispute settlement system is a top priority for many delegations, as it could not reach a consensus on the appointment of new Appellate Body members due to US objections. Without it, the WTO is a toothless tiger and cannot respond effectively to any trade disputes. It is paralysed. So, will the WTO membership manage to pull out vital reform to obtain its own survival?
Welcome Comoros and Timor-Leste to the WTO
Relatively uncontroversial will be the welcoming of two new members to the WTO, Comoros and Timor-Leste, the first accession of members after Afghanistan and Liberia joined in 2016. WTO Director-General Ngozi Okonjo-Iweala commended both countries on completing their technical accession procedures and stressed the significance of LDCs joining the organisation. They will now adhere to all WTO rules.
Feeding the world - but how?
Reducing tariffs, subsidies, and export restrictions in agriculture & food imports remain tricky.
For those involved in agri-food trade, the WTO's agriculture negotiations are a complex landscape. They encompass a wide range of topics, from domestic support and market access to export competition and cotton. The Chair of the Agriculture Committee has introduced a draft text for conclusion, which aims to strike a delicate balance between WTO members' opinions. The text outlines seven key negotiating topics, including domestic support, access to agricultural markets, a unique safeguard mechanism, export restrictions, cotton, and procurement of food at government-set prices under developing countries' public stock holding programs. Understanding these topics is crucial as it can help you anticipate potential agricultural policy and procedure changes that may directly or indirectly affect the work of customs managers of food trading companies.
Will the WTO pull their weight and conclude real progress on fighting climate change and protecting our environment?
At MC13, WTO members are not anticipated to make a definitive commitment to addressing the climate crisis. Their engagement may be tentative at best. They will highlight the significance of the multilateral trading system in advancing the UN 2030 Agenda and its Sustainable Development Goals, especially in dealing with global environmental issues like climate change, biodiversity loss, and pollution, but they will not provide solutions. They are now deliberating on the wording of the MC13 final declaration, enhancing processes for the WTO Committee on Trade and Environment (CTE), and conducting the first ministerial discussion on sustainable development. Furthermore, coalitions of WTO members will present specific results and future actions for their projects on plastic pollution, trade and environmental sustainability, and the reform of fossil fuel subsidies. We aim for ongoing communication and collaboration between countries to establish trade and climate policies that support each other.
Supporting the world's poorest nations – But how?
Comprising over two-thirds of the WTO membership, developing economies and least-developed countries (LDCs) benefit from flexibility in applying WTO rules. A primary objective of the WTO is to support the greater participation of these economies in international trade. The Committee on Trade and Development oversees work on achieving this objective. At MC 13, WTO members discuss ten proposals on special and differential treatment by the G90 group of developing economies and LDCs in the Committee on Trade and Development's "Special Session". The proposals aim to strengthen existing flexibilities and enable industrialisation, structural transformation, diversification, and sustainable integration into the multilateral trading system.
Other Matters
There are many other matters that the MC13 is likely to talk about, including intellectual property, the TRIPS agreement, and investment facilitation, amongst many others. Watch this space.
Takeaway
The 13th WTO Ministerial Conference (MC13) will occur from 26 to 29 February 2024 in Abu Dhabi, UAE. The conference will focus on various issues, including renewing the electronic transaction customs duty moratorium, curbing harmful fisheries subsidies, and addressing climate change and environmental issues. The WTO will also welcome Comoros and Timor-Leste to the organization, ensuring they adhere to all WTO rules. The agriculture negotiations will be complex, involving domestic support, market access, export competition, and cotton procurement. WTO members will also discuss proposals for special and differential treatment by developing economies and least-developed countries (LDCs) in the Committee on Trade and Development's "Special Session," aiming to strengthen existing flexibilities and enable industrialisation, structural transformation, diversification, and sustainable integration into the multilateral trading system. Other topics include intellectual property, the TRIPS agreement, and investment facilitation. The outcome of the MC13 will significantly impact the lives of customs managers and the WTO's future work.
Our Recommendation
The WTO is the only body setting the rules for world trade. Any business trading across borders should be interested in a rules-based global trading order. Find out everything you need to know from the experts at the Customs Manager Ltd about the WTO, WTO reform and download all important relevant topics by taking out a subscription to our trade intelligence service, which keeps you up to date with this and twenty other topics that any serious Customs Manager cannot live without.
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