After four days of intense discussions, the WTO ministerial conference in Yaoundé ended on Monday without agreement on key issues (reform, e-commerce, and agriculture), against a backdrop of strong tensions between India, Brazil, and the United States.
The World Trade Organization’s moratorium on imposing tariffs on digital trade, which has been in place since 1998, has come to an end. A bitter blow for developing countries calling for its extension, led by the United States.
“The inability of WTO members to reach a concrete political agreement in Yaoundé is particularly concerning,” said John Denton, Secretary-General of the International Chamber of Commerce. This does not mean that tariffs will automatically be imposed, but the failure to reach a concrete political agreement in Yaoundé is particularly worrying in this period of strong tensions in the global economy, Denton added.
“We worked hard on several issues, but we simply ran out of time,” said Ngozi Okonjo-Iweala, Director-General of the WTO. The conference, with 166 member countries, was supposed to conclude on Sunday afternoon. “This is not the expected outcome,” said UK Secretary of State for Business and Trade, Peter Kyle, calling it “a major setback for global trade.”
Negotiations on various issues intensified on Saturday, with no compromise expected on agriculture, given the deep disagreements on this highly sensitive topic in many countries.
However, negotiations on Sunday seemed to be moving towards the adoption of an agreement, albeit minimal, on WTO reform, according to diplomatic sources and experts. Tensions arose on Sunday when Brazil linked e-commerce negotiations to agricultural issues in protest over the lack of agreement on the latter. Several countries refused to make progress on reform without advancements on e-commerce, diplomatic sources indicated.
“Agriculture is the sector that has made the least progress in the 30 years of the WTO’s existence,” said Brazilian Foreign Minister Mauro Vieira in Yaoundé.
The WTO, with its dispute settlement mechanism partially paralyzed due to Washington’s blockade of judge appointments, struggles to conclude agreements due to the consensus rule. It needs to reform on several fronts to overcome a deep crisis undermining its central role in regulating international trade.
As at every ministerial meeting, countries negotiated the renewal of a moratorium prohibiting tariffs on digital transactions. Concluded in 1998, it was renewed every two years at WTO ministerial conferences. “This is not the first time the moratorium has expired,” clarified Ms. Okonjo-Iweala. The WTO noted that it takes time for countries that want to impose tariffs to do so.
The United States sought a permanent extension this time. Many developing countries, led by India, opposed this proposal due to fears of lost tax revenue. A compromise seemed to be forming around a five-year extension, but Brazil was reluctant to go beyond two years, according to the Brazilian Ministry of Foreign Affairs.
