Exclusive Interviews, WTO crisis and reform

Interview: WTO needs members’ pragmatism to succeed

The World Trade Organization needs to function in a more flexible and pragmatic way in order to deliver its potential economic benefits – with ad hoc solutions working better, in some circumstances, than the application of rigid rules.

This is the view of Keith Rockwell, who for almost three decades was right at the heart of WTO activity as the organisation’s chief spokesperson.

The energetic American became well-known to generations of journalists, and the wider international trade community, as the man with a front-row seat at all of the WTO’s formative moments since 1996.

Now retired – and hence free to express his own views, rather than those of the institution he served – Rockwell spoke to Chris Horseman about the last ministerial conference MC12, reforming the institution’s dispute settlement system, special and differential treatment for developing countries – and his ex-boss at the WTO, director-general Ngozi Okonjo-Iweala.

Borderlex: Some have said that euphoria over the success of MC12 has tended to cover up the paucity of what has actually been agreed in certain areas. Would you agree?

Keith Rockwell served as spokesperson for the World Trade Organization until May 2022. Photo credit: WTO.

Rockwell: No, I would not.  Remember that days – or hours – before the meeting began, people were expecting no positive outcome at all and predicting the collapse of the global trading system.

Given what is going on at present with Ukraine and Russia, some commentators were painting things in a very dark way. And the fact of the matter is, things were very tough.

But an agreement was reached; not on one or two things, but on five things in all*.

Does that mean that we’re done? No – there is more work to do.

Granted, rolling over the moratorium on e-commerce transmissions [until the next WTO ministerial] is really just kicking the can down the road. And there are four years now to get ahead on disciplining subsidies likely to lead to overfishing and overcapacity in the fisheries sector.

But had we not achieved these things, under extremely trying circumstances, the situation now would have been extremely bleak. I think people need to say that this was a very impressive achievement.

What has also become clear is that the idea that everyone can just meet virtually to work these things out is nonsense. You have to have people sitting around in a room, in a very old-fashioned way, going over pieces of text. That’s how it gets done, and it gets done in a pressure-packed way. The idea that you can do this over SMS texting is pretty far-fetched.

One of the trickiest areas of WTO policy is special and differential treatment for developing countries. Can the organisation continue to treat all self-proclaimed developing countries in the same way?

Well, everyone is clear about the status and the position of least-developed countries. But it was [former WTO director-general] Pascal Lamy who posed the question: “Is China a poor country with a lot of rich people, or a rich country with a lot of poor people?” And that remains an open question.

I think the way forward is to encourage developing countries to choose not to take advantage of the concessions available to them if they don’t need to.

There was controversy in the run-up to MC12 about countries making use of the TRIPS waiver for COVID-19 vaccines – but China publicly said, we’re not going to take advantage of these concessions, we don’t need to.

I think the strains on the system arising from the principle of special and differential treatment are going to continue, and if you try to do address that in a dogmatic way, then you are not going to resolve it. But if you go case-by-case, it can work.

Besides, what is it that helps development? Is it being exempted from the rules, or it is embracing the rules? Is it making the necessary if sometimes painful domestic reforms that are required, or is it saying, “I need policy space”? That is of course a highly political question.

Many believe that the best way to make the WTO work more effectively is to make more use of plurilateral negotiations. But countries like India and South Africa see this as an affront to multilateralism. Who is right?

Remember, three-quarters of the WTO membership are currently signed up to participate in one plurilateral negotiation or another – and all concessions created as a result of these negotiations are extended to all on a ‘most-favoured nation’ basis.

Plurilaterals are undoubtedly a way forward. They are not new.

And if you were to block them from being conducted in the WTO, then the protagonist countries would go ahead and do these agreements anyway, but they would do this somewhere else, in a different forum. Then the meetings wouldn’t be open to all members, and it would be outside the scope of the WTO, and there would be no MFN.

The dispute settlement function within the WTO is not working well. In a recent article for the Hinrich Foundation you argued that WTO members needed to decide how ‘binding’ they want dispute settlement to be. How could it be effective if it isn’t binding?

Well, how effective it is now? When it takes 12 years to resolve the Airbus-Boeing subsidy dispute – how effective is that?

You have developing countries that are terrified of signing up to any new negotiated agreement because they don’t want to be dragged into court by well-heeled lawyers from Brussels or Washington. If you put in place a dispute settlement with teeth, and it winds up biting a lot of developing countries on the backside, then they’re going to say, I don’t think I want to sign up to this.

Robert Lighthizer [the US’s Trade Representative under Donald Trump] complained that the WTO system is geared towards litigation and not towards negotiation – and [current USTR] Katherine Tai has said the same thing. And they’re not wrong. We have had 600 dispute settlement cases since the creation of the WTO – and just one or two multilateral agreements

The system is supposed to be set up in such a way as to encourage the resolution of disputes. But it’s become a political tool, a cudgel to bang people over the head with.

What if you said that, as a first order of business, countries should try to go to arbitration? Or use the good offices of the WTO director general, which are under-used?

I don’t know how you fix that. But it’s very encouraging that the Americans are now reaching out to people and holding meetings on reform of the dispute settlement system.

WTO director-general Ngozi Okonjo-Iweala, in office for little more than a year, played a key role in piloting MC12 to a successful conclusion. What’s your assessment of her role?

She undoubtedly was the right woman in the right job at the right time.

Being the WTO DG is one of the hardest jobs in the world. She’s understood that she has to learn on the job. She’s an economist, and she understands very clearly now that the WTO is run by lawyers! But she worked tirelessly to get the deal over the line at MC12.

Dr Ngozi believes that the WTO secretariat has to have a bigger role than it currently does. She’s doing things very differently from how they have been done before. When she’s questioned on this, her response is: ‘If the old ways of doing things are working so well, why do we have so little to show for it?’ It’s not easy for people to come up with answers to that question.

Will there ever be an agreement to update the WTO agreement on agriculture?

It’s a very, very complicated set of circumstances at present. What’s been lost is the original ‘bargain’ in the Doha Round [the agriculture negotiations which ran from 2001 to 2008], which was that you would agree cuts in your domestic agricultural support in exchange for improved market access.

But there are now no real discussions on a WTO agreement on market access for agricultural goods. So people are saying to the subsiding nations, in effect: ‘We want you to unilaterally disarm’.

As long as market access is off the table, you’re talking about deep cuts in countries’ support for their agriculture sector – in exchange for what? I realise that that’s a very mercantilist point of view, and you can build an argument that says it’s a good idea to cut support to agriculture from a domestic policy perspective anyway. But – that’s not how it works in the WTO.

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*Key MC12 outcomes are: an agreement on a COVID-19 vaccine intellectual property waiver, a multilateral agreement on fisheries subsidies, a commitment to start talks on reform of the WTO, an extension of the moratorium on e-commerce negotiations, and a deal to exempt UN food aid donations from national export restrictions.

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