Crucial trade talks got underway in Switzerland at the weekend after the much-delayed Twelfth Ministerial Conference (MC12) of the World Trade Organisation (WTO) finally started in Geneva.
New Zealand’s Trade Minister Damien O’Connor is there, having recovered from covid-19 and dodged weather-related shutdowns of key airports to make his connecting flight.
Ahead of his departure, O’Connor said as a small exporting nation at the bottom of the Pacific, New Zealand strongly believed in rules-based trade.
“Small, open economies like New Zealand’s have long relied on, and benefited from, a strong multilateral trading system,” he said.
“The MC12 is an important opportunity to reinforce the importance of the WTO to global trade and economic interests.”
MC12 is the first ministerial conference of the WTO since December 2017.
In that time, serious problems have eroded its effectiveness.
These have including unilateral American trade blockages during the Trump administration, which have not been significantly rolled back by President Biden.
Trump’s actions also hamstrung important functions of the WTO, such as its appellate court, by blocking the appointment of new judges.
That body has not sat since December 2020, due to what the WTO itself called “paralysis”.
Reforming the WTO is something O’Connor is keen on, but efforts to find a solution led by New Zealand officials in Geneva have so far not been adopted by delegates as a whole.
One New Zealand official suggested a good outcome in Geneva would be if “things don’t get any worse”.
“This is about injecting some new confidence into the global trading system.”
Stephen Jacobi
Trade analyst
MC12 has a range of subjects on its agenda, including environmental challenges like subsidies for fossil fuels and ocean fishing.
New Zealand strongly supports an end to both two practices, saying they are exactly the opposite of what should be done.
But from New Zealand’s point of view, agriculture will still be the big issue to be dealt with in Geneva, or perhaps elsewhere at a later date.
However progress is looking very difficult.
Agricultural talks in the leadup to MC12 focussed mainly on food security, which many countries said was being eroded by the war against Ukraine, the pandemic and climate change.
“Food shortages and price hikes are pushing millions more people into poverty,” said the WTO Director-General Ngozi Okonjo-Iweala.
Many delegates agreed with this – others called for fewer trade distorting subsidies and restrictions, which matches New Zealand’s position.
But other delegates were doubtful of reaching consensus on this matter and most issues were left unanswered prior to the start of MC12.
Despite these problems, there are signs that New Zealand has learnt to live with the faults of the WTO.
In the five years since WTO Ministers last met, total primary sector exports have risen from $38.2 billion to $54.3b.
Some of this growth has stemmed from bilateral trade deals that bypass the WTO’s multilateral approach.
Another cause is that prices for some export products have risen sharply, allowing more money to be earned from each tonne of goods.
But even though New Zealand got some wins on the side, O’Connor insists rules based international trade would benefit New Zealand exporters and bring economic security.
In contrast with the strong views of O’Connor and other delegates, trade dissenters continue to accuse the WTO of either ineffectiveness or having the wrong goals.
An American activist, Deborah James, said most countries that experienced strong economic growth during the WTO’s 27 year existence did so by integrating trade chains with China, not by adhering to the WTO rule book.
A New Zealand colleage, Jane Kelsey said since its inception, the WTO’s agenda was skewed in favour of rich countries and their corporations at the expense of the Global South.
“It aims to lock countries into a neoliberal agenda that put profits and property rights ahead of everything else and undermines democracy and peoples’ fundamental rights,” she said.
In contrast, a long standing trade advocate, Stephen Jacobi, said MC12 was important even if specific issues were not resolved.
“This is about injecting some new confidence into the global trading system,” he said.
“That is more important even than the actual outcome of the meeting.”
