Trade Development Symposium

Regional pacts have become a permanent and increasingly important feature of the world trading envi- ronment. Currently, more than half of world commerce takes place among countries linked by such pacts. Furthermore, these trade agreements have grown not just in number, but also in depth. Many agreements deal with matters that remain outside the WTO’s scope or capacity to address, such as rules pertaining to investment and competition policies.

For some WTO members, regional and bilateral pacts have become the preferred way to interact with their trade partners. The deadlock of the Doha negotiations may exacerbate these tendencies. The rela- tionship between the WTO – and previously the GATT – and regional trade agreements has been limited to evaluations of such pacts in the context of obligations imposed by GATT Article XXIV and the Ena- bling Clause, as well as the enhanced notification procedures of the more recent transparency mechanism. While these obligations have led to an improved understanding of these trade deals by making more in- formation available, they have achieved little else. Under current circumstances, this may not be sufficient.

This session looks into the possibility of establishing a more organic link between the WTO and regional trade pacts, moving away from the perception that regional pacts are little more than second-best options,

and instead recognising them as valuable agreements in their own right. Many of today’s regional pacts are as complex and sophisticated as the WTO, and there is a body of rules and practices at the regional level from which the multilateral trading system could benefit. In fact, rather than ignoring regional pacts or regarding them with suspicion, the WTO could embrace them by providing, at least initially, a dedi- cated place or forum for them inside the WTO. There, all matters relating to regional trade pacts, their rules and practices could be subject to informed discussion among all WTO members, including those that actively participate in regional agreements and negotiations

The WTO as an institution is not what it used to be a decade ago. Many countries have since joined, and shifts in the balance of global economic and political power have transformed the playing field. Accord- ingly, new needs and different expectations have emerged, including demands for a reform of the deci- sion-making process to increase its fairness, inclusiveness, and transparency. Meanwhile, trade negotia- tions under the Doha Round have reached an impasse, generating uncertainties about the future of the WTO as a forum for negotiation. This has  prompted critics to argue that the WTO’s decision-making

rules, principles and practice - many of which are carried over from the days of the GATT system - are ill-suited to the challenges of our times.

There has been considerable debate as to whether institutional reform is needed - and in what form - ever since the WTO was first established, with numerous proposals being put forward. But as with any inter- governmental institution, change must come – and be agreed to – from the inside. This raises the question of how such a process can be initiated at the global trade body. Adding to these difficulties, years of near- exclusive focus on the Doha  Round have inhibited institutional evolution, to the point of diminishing some of the WTO’s permanent, non-negotiating functions, such as the work of its regular committees. In the run-up to the 2009 Ministerial Conference, several proposals geared toward strengthening the func- tions of the WTO’s regular committees were put forward, many of which remain applicable to the present situation. A co-ordinated discussion, however, remains outstanding.

Against this backdrop, the session will explore possible options for tackling institutional reform in the WTO, with the view of strengthening the multilateral trading system: How could a reform agenda be ini- tiated at the WTO and what should be its content? Should fundamental principles and practices, such as the notion of single undertaking, be re-considered? These are some of the questions that will be raised by the panel members.

The current paralysis in the Doha Round is arguably hampering the ability of the multilateral trading sys- tem to respond and adapt to emerging global trade and sustainable development challenges, particularly those that cannot be solved through bilateral or regional trade agreements. Despite a recovery in world merchandise exports, the effects of the financial crisis and global recession are still hampering faster eco- nomic recovery. High oil prices, persistent unemployment, and measures designed to reduce budget defi- cits have undermined short-term growth prospects.

Meanwhile, estimates place the number of hungry people in the world as one billion in 2009, catapulting food security back to the top of the political agenda. As growth in demand continues to rise faster than supply, food prices are expected to remain high in the coming years. Low stocks, rapidly growing demand for biofuels, and rising energy prices have also contributed to higher food price volatility, further exacer- bated by export restrictions and other similar policies imposed by major food exporters.

As governments are confronted by the urgent need to curb GHG emissions and initiate a transition to a greener economy, they face a widening range of concerns, ranging from loss of competitiveness, carbon leakage, or the need to promote the widespread diffusion of green technology. These concerns have direct implications for intellectual property protection, tariff, and substitution policies. While these issues have been omnipresent in the mind of both trade and climate negotiators, they have not been fully addressed, let alone resolved, in any of these forums. As a result, plurilateral responses and unilateral action have prevailed in recent years, for better or worse. This has, in turn, raised concerns about policy coherence and WTO compatibility, as illustrated by recent disputes on energy subsidies.

Finally, the multilateral trading system needs to take better account of the increased geographical frag- mentation of global supply chains and the growing importance of non-tariff measures, including behind the border rules and regulations, not to mention the link between trade and exchange rate policies.

How should the system respond to these emerging challenges? Is the WTO rulebook sufficiently equipped to deal with them? Should WTO Members address them in parallel with efforts to revive the Doha Round? And, if so, in what way and through which process? These are some of the questions that participants in this final roundtable are expected to address