Ottawa Ministerial: Officials Call for "Sustained and Meaningful Political Engagement" for WTO Update

1 November 2018

Thirteen international trade ministers gathered in Ottawa on 24-25 October to issue a call for action to strengthen the World Trade Organization (WTO), with officials weighing options for modernising the global trade club by way of updating its negotiation process, improving its dispute settlement system, and ensuring the effective implementation of existing rules, among other ideas. 

Canada’s Minister of International Trade Diversification Jim Carr hosted the meeting, which was attended by WTO Director-General Roberto Azevêdo and officials from Australia, Brazil, Chile, the European Union, Japan, South Korea, Kenya, Mexico, New Zealand, Norway, Singapore, and Switzerland. This group intends to develop proposals for solutions to modernise the WTO, while looking to bring on board other participants from the organisation’s total 164 members. 

“The current situation at the WTO is no longer sustainable. Our resolve for change must be matched with action: we will continue to fight protectionism; and we are committed politically to moving forward urgently on transparency, dispute settlement, and developing 21st century trade rules at the WTO,” ministers said in a joint communiqué late last week.

During the meeting, ministers called on the international community to back efforts towards updating the WTO system, fighting trade-restrictive measures, and promoting the better functioning of the existing system through transparency efforts and other measures. 

“Rather than standing back, arms folded and looking grumpy about it saying ‘the WTO isn’t working,’ we instead get on with saying ‘how do we make it work, make it work better, make it fit for the future?’" said Australian Trade Minister Simon Birmingham, according to comments reported by Bloomberg. 

Ministers also emphasised the importance of the body’s enforcement mechanism and the envisioned development of new trade rules that are apt for 21st century needs. 

Ministers call for resolution to Appellate Body impasse, streamlined negotiations

In the joint communiqué issued following the meetings, the ministers outlined their top priorities for WTO modernisation, including on dispute settlement, and referred to the importance of making sure the Appellate Body can remain functional. 

“We are deeply concerned that continued vacancies in the Appellate Body present a risk to the WTO system as a whole,” ministers said. 

The Appellate Body has three judges out of its normal docket of seven, which is the absolute minimum it needs for operating, given that three Appellate Body members must sign off on any ruling. 

However, two other judges’ terms will expire at the end of next year, and US trade officials have repeatedly blocked the start of selecting processes to fill the increasing number of vacancies. 

“We acknowledge that concerns have been raised about the functioning of the dispute settlement system and are ready to work on solutions, while preserving the essential features of the system and of its Appellate Body,” stated the communiqué released in Ottawa. 

“We share a willingness to explore alternate dispute settlement mechanisms, including mediation,” said Carr at the closing press conference

Ministers outlined the need for a revamped negotiation process within the WTO, calling for the conclusion of the fisheries subsidies talks as well as the need to adapt to new “realities” that have emerged since the WTO’s creation in 1995, such as the UN’s Sustainable Development Goals (SDGs). 

The fisheries subsidies negotiations are aiming to wrap up by the end of 2019, with WTO members negotiating on possible disciplines to subsidies for illegal, unreported, and unregulated (IUU) fishing, subsides that contribute to overcapacity; and subsidies that contribute to overfishing and overfished stocks. Related issues being treated under the fisheries talks include notifications and transparency, as well as special and differential treatment. (See Bridges Weekly, 14 December 2017

How to treat development-related considerations, as well as the different needs and capabilities among developing countries, was also a priority listed in the communiqué. “We need to explore how the development dimension, including special and differential treatment, can be best pursued in rule-making efforts,” the ministers stated. 

Supporting the implementation of existing international rules was also mentioned as a key goal going forward, with ministers calling for a strengthened notification system and greater transparency within the organisation. 

Looking ahead

Talks remained positive and forward-looking at the meeting, according to several ministers. 

“For decades now, the WTO and the GATT before it have been indispensable in facilitating and safeguarding international trade. In these two short days, we’ve seen nations roll up their sleeves, engage, and express their eagerness to find solutions and begin to build consensus towards change,” Carr said in his closing press conference. 

The GATT refers to the General Agreement on Tariffs and Trade, which was the precursor to the present-day World Trade Organization. 

“The WTO is ultimately a consensus body, but this small, diverse group is a catalyst to spur action and prompt meaningful reform, and I look forward to bringing both my American and Chinese counterparts up to speed on the outcomes of our work in the coming days,” said Carr. 

Mexico’s Undersecretary of Foreign Trade at the country’s Economy Secretariat, Juan Carlos Baker, expressed similar sentiments, telling reporters in Ottawa that there will be multiple occasions on the international trade calendar to advance these efforts. 

“We are going to waste no opportunity whatsoever in terms of political events [to discuss WTO reform]. I am sure that we will use these occasions to speak about what we’re doing,” he said, according to comments reported by Reuters. 

Indeed, a key question going forward will be how to build broader convergence with major economies such as the US and China, which did not attend the Ottawa gathering, and what other steps may be needed in addition to WTO modernisation to resolve mounting trade tensions between Washington and Beijing. 

Although no concrete reform plans were formalised, officials mentioned that the meeting in Ottawa was meant to start a broader discussion, with multiple checkpoints to assess progress and next steps. The next WTO Ministerial Conference will take place in June 2020 in Astana, Kazakhstan, although the smaller group agreed to meet again in January 2019 to continue talks, most likely referring to an informal gathering of trade ministers that is held every year on the sidelines of the World Economic Forum’s (WEF) Annual Meeting in Davos, Switzerland. 

These issues will likely be raised in other multi-country settings as well, such as the upcoming G20 Leaders’ Summit in Buenos Aires, which Azevêdo suggested was a key opportunity to find ways to "preserve and strengthen the trading system in the interests of all," according to comments reported by the Australian Financial Review. 

ICTSD reporting; “Trade Chiefs Say WTO No Longer Sustainable and Needs Reform,” BLOOMBERG, 25 October 2018; “WTO head Roberto Azevêdo warns of 'severe' harm from global trade war,” AUSTRALIAN FINANCIAL REVIEW, 18 October 2018; “WTO member group vows to reform rules on subsidies, dispute settlement,” REUTERS, 25 October 2018.

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