When the WTO starts its work for 2009 this week, three items must be at the top of the agenda: debating the role and mandate of the agency’s Director-General (Pascal Lamy’s current four-year term will expire this August); setting a date for a full Ministerial Conference this year in Geneva; and forging a forward-looking agenda for that meeting.
In the absence of political direction – and consumed by the task of closing the Doha Round – the WTO Secretariat and the Geneva-based negotiators that do much of the day to day work of the organization have effectively been ‘playing dead’ with regard to how the WTO could respond to the challenges of climate change, the food crisis and financial mayhem. What should be the role of the Director-General in addressing these challenges? How can the WTO membership support that role? After over ten years of the WTO, what institutional changes are needed? What is the fall back strategy if the Round fails? A Ministerial meeting this year must address questions regarding a long-term vision for the multilateral trading system, including the WTO’s role in global economic governance, the values it should protect and support, and the need for institutional reforms.
Ensure Debate on the Role and Mandate of the Director-General
On 31 December 2008, the deadline for the WTO’s 153 members to present nominations for the next Director-General of the organization expired. The incumbent, Pascal Lamy, was the only nominee. The decision by WTO members not to propose contenders to Lamy’s quest for re-election signals, at best, their confidence in Lamy’s continued leadership and, at worst, the perceived lack of viable alternatives. For many members, there are also concerns about rocking the leadership boat given the uncertain political environment and the tenuous future of the Doha Round.
Were there to have been contenders for the WTO’s top post, the formal process for the selection would have required each of the nominees to set out a clear agenda for their prospective tenure and to engage in several months of discussion with WTO members until the end of March. The WTO members would then have embarked on a two month selection process, ending with the election of the agency’s new head from a pool of candidates by the end of May 2009.
In the last two hotly-contested Director-General elections, such deliberative processes served as a vehicle for WTO members and organized stakeholders – including business communities and NGOs across the world, as well as academics – to reflect on the performance of the organization and debate how the multilateral trading system should address the myriad social, development and environmental challenges and expectations it confronts. This in turn helped to build public understanding of the institution, boost public accountability, and bolster the legitimacy of the multilateral trading system.
This year, with only one nominee at hand, WTO Members must nonetheless use the appointment process to ensure that there is vigorous debate on the challenges facing the organization and the changes the Director-General should pursue. They must then provide a clear mandate to the Director-General. Here, even in the absence of contenders, Lamy himself needs to demonstrate that he can be an agent for change by catalysing debate. He should seize the opportunity to explicitly and publicly present a forward-looking vision for the multilateral trading system, the WTO system and its Secretariat, and propose a comprehensive action plan for his second term for Members to consider.
Commit to Ministerial Leadership
WTO members must also commit to a full Ministerial meeting early in the New Year. Regular ministerial-level meetings are vital to the good governance, credibility and strength of any international organization, most of which, like the World Health Organization or the World Intellectual Property Organization, have boards that meet at least annually. The Boards of the World Bank and International Monetary Fund meet bi-annually. Such meetings provide the opportunity for Ministers to set strategic direction, provide budgetary oversight, approve work programmes, and address emerging political challenges or crises.
At the WTO, the Ministerial Conference of the full membership is the organization’s supreme governing body and equivalent to the WTO’s board. Ministers are thus responsible for the regular oversight of the WTO and evolution of the multilateral trading system, the functioning of its permanent contractual arrangements between its members, and they are the highest authority when it comes to agenda-setting. The Ministerial Conference is the only formal forum the WTO system currently has for Ministerial-level policy discussion engaging all Members. The Agreement Establishing the WTO stipulates it should be held every two years.
The WTO has not, however, had a broad-ranging Ministerial meeting since the launch of the Doha Round. Indeed, over the past decade, Ministerial meetings have been dominated by efforts to push ahead with the Doha Round or bypassed altogether in favour of informal mini-ministerials, usually focused on limited aspects of the negotiations and sometimes hosted not so informally by the WTO Secretariat. Since the 2005 Hong Kong Ministerial, the scheduling of the next full Ministerial Conference has been ducked altogether.
Whether the lack of formal, regularized, systematic Ministerial engagement by the WTO’s full membership has been good for the Doha Round remains an open question. What is clear is that restraining the scope of Ministerial meetings or postponing them weakens the institutionality of the multilateral trading system and undermines its spearhead position in global governance. The Doha Round must of course be on the agenda of a Ministerial Conference – even if only to take stock of progress – but the global community is rightly demanding an agenda that is far broader.
Focus on Vision and Values…and the Reforms that Follow
In late 2008, Lamy foreshadowed the question of timing for the next mandated Ministerial Conference. He rightly called for progress this year on a ‘more global portfolio of WTO activities’ alongside the Doha Round, highlighting the importance of work on trade finance, Aid for Trade, and monitoring trade measures taken in relation to the financial crisis. But the vision for a Ministerial Conference will need to be still broader.
In 2009, Ministers should also discuss the integrity of the multilateral trade system in light of the Doha impasse and the proliferation of preferential trading schemes; engage in agenda-setting discussion on economically and politically difficult issues; reconsider the WTO’s strategic direction and review its mandate; reflect on the performance of the Secretariat; and debate what is needed by way of institutional reforms to ensure the agency is fit for purpose.
Amidst global debates on financial instability, climate, energy, the massive explosion of private standards, technology transfer, and food security as well as development and the reduction of poverty, the WTO should not and cannot claim all global problems as its turf or demand to be the forum for their discussion. It should, however, seek to ensure trade policies and laws do not thwart solutions but supports them; governments do need to decide where and how to discuss inevitable linkages. This will demand a clearer vision on the place and role of the WTO among the family of international organizations.
The ongoing financial crisis reinforces the urgency of this task. As governments critically review the performance of key global financial regulators and the Bretton Woods Institutions, trade Ministers need to ensure that the multilateral trading system is not neglected in discussions on how to improve global economic governance, particularly as many governments face domestic pressures to retreat from the rules-based system they have designed. This task will demand high-level political commitment from Ministers. It will require them to think harder about and clarify the values needed to govern global trade for sustainable development and the reforms this demands.
Momentum in any future trade negotiations will necessitate clearer articulation of how the WTO can deliver on the needs of developing countries. While coalition-building has helped the poorest countries increase their participation in the negotiations, they remain left out of key decision-making at critical moments. The major trade powers – the U.S., the EU, but also Brazil, India and China – will need to persuade the weakest WTO members that continuing to engage is worth it and that they will have a greater say. After seven years of Doha negotiations under the Bush Administration, the Obama Administration has a particular responsibility to take leadership on vision, values, and delivering on development promises to developing countries.
Following greater clarity on vision, institutional reform should also be high on the agenda of a Ministerial meeting. Here, Lamy should deliver on his first-term promises to lead members in discussion of internal reforms that would better equip the agency for the future and to execute its existing responsibilities. Remember here that the WTO is entrusted with a set of standing international treaties, most of them designed to operate irrespective of the negotiating function of the organization. Top items for discussion should be overhauling the WTO’s trade policy review mechanism (its main instrument for monitoring the regulatory environment within members) and the Secretariat’s role in trade-related technical assistance, alongside immediate efforts to tackles the constraints to developing countries’ use of the WTO’s dispute settlement system.
Some will caution that Ministerial attention to these broader issues may detract from the Round or that Ministers should only be gathered to seal a final Doha deal. Here, we should recall that Ministers are not simply trade negotiators: they are quite capable of wearing multiple hats (that is what they do by default almost everyday). As the board of the WTO, trade ministers have a critical responsibility for the organization’s evolution and should be vital players in debate on reform of global economic governance. It is time for them to show up for this work.
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Dr. Carolyn Deere, Director, Global Trade Governance Project
Global Economic Governance Programme, University College, Oxford
Resident Scholar, International Centre for Trade and Sustainable Development (ICTSD)
The views expressed in this article are those of the author and should not be attributed to any organization with which she is affiliated.
January 15th, 2009 at 3:56 pm
[...] For the first time in the 14-year history of the WTO, the race for the next leader of the global trade body will be uncontested. As nominations closed 31 December, current WTO Director-General Pascal Lamy emerged as the sole candidate for the four-year position. Lamy, who has headed the organisation since September 2005, confirmed his intentions to run for a second and final term in early November (see BRIDGES Weekly, 6 November 2008, http://ictsd.net/i/news/bridgesweekly/32641/). The French national’s first term was dominated by gradual advances, but ultimate stalemate, in the seven-year-old Doha Round of trade talks. At the centre of the collapsed negotiations lies continued disagreement between industrialised and developing nations – a gap that Lamy was unable to bridge. In a letter to WTO General Council chair Bruce Gosper announcing his intention to seek re-election, Lamy highlighted the successes of, and challenges remaining, for the global trade body following his first term. “We have seen the Doha negotiations move closer to the finish line; we have seen the Aid For Trade agenda take a prominent place as a necessary complement to trade opening; we have welcomed five new members into the organisation; we have worked to enhance the participation of all members, in particular the poorest, in the activities of the organisation” Lamy wrote. “We have seen all of this and much more but it is undeniable that, today, the tasks ahead of us remain challenging, in particular in view of the current world financial turmoil. “I stand ready to continue to serve the WTO for a second term and to make a contribution to reinforcing multilateralism and development,” Lamy’s letter concluded. Some observers have questioned the significance of Lamy’s uncontested bid, saying that it represents a failure of the WTO’s 153 members to submit another candidate. “The decision by WTO members not to propose contenders to Lamy’s quest for re-election signals, at best, their confidence in Lamy’s continued leadership and, at worst, the perceived lack of viable alternatives,” Carolyn Deere, Resident Scholar at ICTSD and Director of the global trade governance project in the Global Economic Governance Programme at University College, Oxford, commented in a blog (available here: http://www.globaleconomicgovernance.org/blog/2009/01/the-wto-in-2009-the-leadership-challenges/). [...]
February 21st, 2009 at 5:17 pm
[...] Hand in Hand gehen? Die Frage ist weitgehend ungelöst, wie sich gerade auch in der Welthandelsorganisation (WTO) [...]
February 24th, 2009 at 2:32 pm
A Chinese translation of this post can be found at http://ictsd.net/i/news/chinesenews/40194/
March 11th, 2009 at 12:00 pm
A Spanish translation of this post is also now available at http://ictsd.net/i/news/puentes/42658/
November 20th, 2009 at 8:10 am
[...] this will be the organization’s first Ministerial Conference in nearly four years (see my post on this blog in January calling on governments to regularize bi-annual Ministerial Conferences as mandated in the [...]