How to Negotiate Successfully at the WTO
With major trading countries holding positions that appear to be far apart, it may not be possible to negotiate anything at the WTO these days. And perhaps that is fine. The WTO has achieved so much already, and relying on it as the arbiter of existing rules may be enough. Currently, it serves as the main constraint on the use and abuse of antidumping duties, as well as protectionist domestic regulations. Having the WTO as the global oversight body for rules against protectionism is extremely valuable.
On the other hand, there may be ways to make additional progress on trade liberalization at the WTO, and it would be a shame to miss the opportunity. The spread of agriculture subsidies is actually an opportunity for liberalization: because more countries are now doing this, a proposal to stop would have a more balanced impact.
If trade negotiators want to think big, they could push for some kind of “grand bargain,” where governments who are big providers of agriculture subsidies make real cuts in exchange for disciplines on, for example, state-owned enterprises and e-commerce.
Alternatively, they could think small and push for more sectoral deals like the ITA-II. This deal reflects the traditional form of trade liberalization: lowering tariffs on a multilateral basis. As much as people tout new issues in trade negotiations, there are few initiatives more beneficial than removing tariffs. Currently, a similar deal on tariff reductions for environmental goods is being negotiated.22 More sectoral tariff liberalization of this sort might be a good area to pursue.
Along the same lines, the trade in services talks going on in Geneva could be brought formally into the WTO framework.23 This liberalization mirrors, in terms of its focus on liberalization, the tariff reductions on information technology and environmental goods.
But more generally, putting aside the question of the best strategic approach, there is a fundamental question for governments: Are you willing to address your own protectionism? If the answer is no, the whole process may be doomed from the outset and is not worth the time and effort. It may be possible to reach a trade deal, but the liberalization in it is unlikely to be significant. In this regard, bilateral and regional trade deals have proliferated, but their tariff reductions and services liberalization are preferential (i.e., discriminatory) and they do not address some of the most pressing issues, such as trade remedies and agriculture subsidies. While such deals may have political value, their economic benefits are limited.
It is often said the WTO is a member-driven organization. It is up to the governments, then, where they want to drive it. Recently, it seems as though governments have chosen to get out of the car for a pit stop (to put the classic “bicycle theory” in a new vehicle). But the reality is, the WTO cannot liberalize trade unless governments want to do so.
Unfortunately, every government seems to have a reason why its own agriculture subsidies or other sacrosanct protectionism should be excluded from disciplines. The focus is always on addressing the kinds of protectionism that others engage in. With that attitude, though, real trade liberalization becomes almost impossible to achieve.
Losing the WTO as an effective forum for trade liberalization would be a setback for free trade. Despite its existing successes, there is much more the WTO could achieve, as trade liberalization is most beneficial when carried out multilaterally. It is therefore in the interests of all governments to make the WTO work by committing to trade liberalization in relation to their own protectionism.
1. World Trade Organization, “The Doha Round,”
2. Michael Froman, “We Are at the End of the Line on the Doha Round of Trade Talks,” Financial Times, December 13, 2015,
http://www.ft.com/cms/s/0/4ccf5356-9eaa-11e5-8ce1-f6219b685d74.html. (“One way or the other, this week’s WTO ministerial conference in Nairobi will mark the end of an era.”)
3. “World Trade Organization Strikes ‘Historic’ Farming Subsidy Deal,” BBC News, December 20, 2015,
4. World Trade Organization, “Export Competition: Ministerial Decision of 19 December 2015,” WT/MIN(15)/45, WT/L/980, December 21, 2015.
5. “WTO Deal on Export Competition Sets New Rules without Enforcement Mechanism,” Inside U.S. Trade, December 19, 2015,
6. For example, Brazil has been accused of subsidizing its sugar industry. See House Committee on Agriculture, Full Committee Hearing: Foreign Subsidies: Jeopardizing Free Trade and Harming American Farmers: Global Sugar Subsidies on the Rise, 114th Cong., 2nd sess. (2015),
http://agriculture.house.gov/uploadedfiles/10.21.15_roney_testimony.pdf. (“The value of this indirect subsidy of the Brazilian cane sugar industry, by way of the subsidy of the cane ethanol industry, along with related government benefits, has been placed at $2.5–3.0 billion per year.”)
7. “India Claims Victory In Nairobi By Preserving Its Key Priorities From Doha,” Inside U.S. Trade, December 22, 2015,
http://insidetrade.com/daily-news/india-claims-victory-nairobi-preserving-its-key-priorities-doha; World Trade Organization, “Public Stockholding for Food Security Purposes: Ministerial Decision of 19 December 2015,” WT/MIN(15)/44, WT/L/979, December 21, 2015.
8. “WTO Deal on Export Competition Sets New Rules without Enforcement Tool,” Inside U.S. Trade, December 23, 2015,
http://insidetrade.com/inside-us-trade/wto-deal-export-competition-sets-new-rules-without-enforcement-tool (“The disciplines on food aid are slightly stronger than those included in the draft text circulated on Dec. 17, but stop far short of demands by the European Union, Brazil and others to impose a numerical cap on the amount of so-called monetization of food aid by the United States.”); World Trade Organization, “Export Competition: Ministerial Decision of 19 December 2015,” WT/MIN(15)/45, WT/L/980, December 21, 2015, paras. 22–32.
9. World Trade Organization, “50th Ratification of Trade Facilitation Agreement Received,” October 19, 2015,
10. World Trade Organization, “WTO Receives Six Additional Ratifications for Trade Facilitation Agreement,” December 17, 2015,
12. World Trade Organization, “WTO Members Conclude Landmark $1.3 Trillion IT Trade Deal,” December 16, 2015,
https://www.wto.org/english/news_e/news15_e/ita_16dec15_e.htm. (“As a result of these negotiations, approximately 65% of tariff lines will be fully eliminated by 1 July 2016. Most of the remaining tariff lines will be completely phased out in four stages over three years. This means that by 2019 almost all imports of the relevant products will be duty free.”); “Countries Reach ITA Expansion Deal after Compromise on ‘Critical Mass’,” Inside U.S. Trade, December 17, 2015,
13. World Trade Organization, “Nairobi Ministerial Declaration,” adopted on December 19, 2015, WT/MIN(15)/DEC, December 21, 2015, para. 30. See also, “U.S., Other WTO Members Dispute Meaning Of Ministerial Declaration Language on Doha,” Inside U.S. Trade, December 19, 2015,
http://insidetrade.com/daily-news/us-other-wto-members-dispute-meaning-ministerial-declaration-language-doha; “Statement by Ambassador Michael Froman at the Conclusion of the 10th World Trade Organization Ministerial Conference,” December 2015,
14. “Statement by Ambassador Michael Froman at the Conclusion of the 10th World Trade Organization Ministerial Conference,” December 2015,
https://ustr.gov/about-us/policy-offices/press-office/press-releases/2015/december/statement-ambassador-michael. See also, “U.S., Other WTO Members Dispute Meaning of Doha Language in Declaration,” Inside U.S. Trade, December 23, 2015,
15. European Commission, “WTO Delivers Ground-breaking Deal for Development,” December 19, 2015,
16. Froman, “We Are at the End of the Line on the Doha Round of Trade Talks.”
17. “Joint Statement by Commissioners Malmström and Hogan Ahead of the 10th WTO Ministerial Conference in Nairobi,” December 14, 2015,
18. World Trade Organization, “Nairobi Ministerial Declaration,” para. 31.
19. “Joint Statement by Commissioners Malmström and Hogan.”
20. “MOFCOM Spokesman Comments on the Conclusion of the 10th WTO Ministerial Conference,” December 22, 2015,
21. Government of India, “India Opposes Non Reaffirmation of DDA,” press release, December 19, 2015, Ministry of Commerce and Industry,
22. See generally, Office of the U.S. Trade Representative, “Environmental Goods Agreement,”
23. See generally, European Commission, “Trade in Services Agreement,”