Economic Policy Seminar

Short Report

What future for WTO Multilateral Negotiations?(Frdric Payot)

The World Trade Organization (WTO) is an organization that intends to
supervise and liberalize international trade. Essentially, the WTO is a place
where member governments go, to try to sort out the trade problems they face
with each other. At its center are the WTO agreements, negotiated and signed by
the majority of the worlds trading nations. These documents provide the legal
ground-rules for international commerce. This traduces essentially in contracts,
binding governments to keep their trade policies within agreed limits.
Currently, the organization faces an impasse attempting to complete the
negotiations of the Doha Round, which was launched in 2001 with an explicit
focus on addressing the needs of developing countries. The reasons for this
impasse can be explain by the awareness of the implications of the commitments
that countries undertake in the WTO. The perpetual nature of the commitments
and the trade action by other Members, if the undertaking agreements do not
live up to its commitments lead to a resistance to pressures and unreasonable
demands by other countries. Its important to put emphasis on the poor
economic environment since 2008 in major developed economies resulting in
high rates of unemployment and this could traduce in some resilience to accept
new trade liberalization. Unlike in the past, Developed Countries are not able to
steer the negotiations in a desired directions because of the reasons mentioned
above as well as the formation of a number of issue-based Developing Countries-
alliances, which lead to a deadlock.
This variety of geopolitical and economic circumstances has made
decision-making at a multilateral level difficult to governments. As a result many
governments are now turning to plurilateral agreements in an effort to try to
open trade in a way that they cant do at WTO in a multilateral way. This is not
new for the WTO, since its formation there has been a proliferation of non-
multilateral agreements and the WTO itself can be considered as a set of
plurilateral agreements since does not involve all countries in the world.
Previous multilateral trade rounds suggest that plurilateralism might carve a
path back to multilateral negotiation level. Even if it is possible the problem may
be that the multilateral round has to incorporate a set of norms that are reached
outside of the multilateral level where all voices can be heard. Its consensual
that the outcome of the plurilateral agreements should feed across the board
members on a MFN basis (Most Favoured Nation Clause). But plurilateral
problems arise when members begin to use them as a tactic to run away from
the hard decisions they need to make and this could turn in a stumbling block to
the organization.
Multilateralism must be revived at a time of stalled unilateral
liberalization and fearful protectionism in the wake of the global financial crisis,
and a proliferation of bilateral and regional trade agreements. The onus should
be on plurilateral negotiations, preferably within the WTO framework and one
might think that in a long-term basis they will end up being a multilateral
agreement. That is probably the best hope for trade multilateralism today.

Tiago Matos (14410161)

HEC Lausanne