Abu Dhabi, 1 March 2024
The European Commission was instrumental in brokering important outcomes at the 13th ministerial meeting of the World Trade Organization (MC13) that ended Friday in Abu Dhabi. After a week of intense engagement, EU negotiators secured important agreements on e-commerce, new rules to improve global services trade, environmental cooperation, and strengthening the position of developing countries in the global trading system.
However, over the past months, the EU had worked for ambitious results to revitalise the WTO at a time of rising geopolitical tensions, including a comprehensive agreement on global fisheries subsidies, agriculture reform, and meaningful progress on dispute settlement. The EU regrets that, despite willingness by a large majority of WTO members, it was not possible to find compromises on these issues.
E-commerce remains duty-free
WTO Members agreed to renew the “e-commerce moratorium” until MC14, maintaining duty free trade in online services, including apps, games and software, as well as digitally transmitted content such as music, video, and other digital files. The EU invested considerable time and political effort to build a coalition in favour of this extension, which will help the growth of an already booming global trade in digital services. The e-commerce moratorium has been in place since 1998 and is crucial for businesses – notably SMEs – and consumers around the world, enabling them to engage in electronic commerce and to access electronic services more cheaply and easily. It is also key for businesses in developing countries to expand globally. Digital trade already accounts for close to a quarter of global trade and will only continue to grow in importance. The EU will continue to develop efforts at the WTO towards creating a more inclusive, predictable, and rules-based global trading system that is fit for the digital economy, including seeking a long-term solution for customs duties on electronic transmissions.
Boost for global trade in services
The EU welcomed the entry into force of new rules to facilitate and simplify trade in services. Businesses will now enjoy clear, predictable and effective authorisation procedures in more than 71 markets. The EU was at the forefront of this initiative, which will support economic growth for us and our partners in the largest and fastest growing sector of today’s economy.
Supporting development
The EU played a leading role in delivering outcomes that will integrate developing countries more firmly into the global trading system. 123 WTO Members finalised a deal to facilitate investment and support development. This new Agreement on Investment Facilitation for Development (IFD) aims to harness the economic potential of foreign direct investment to boost development in poorer countries. The next step will be to incorporate this agreement into the WTO rulebook. The accession of two new members – Timor Leste and Comoros – to the WTO this week, highlights the value countries around the world still place on a shared global rules base for trade and investment. Ministers also adopted a decision to help least developed countries as they graduate to a higher level of development. Beyond supporting least developed members, WTO members took a step towards improving clear and effective implementation of special and differential treatment for all developing countries in the key areas of standards for market access.
Environment and sustainability
Important progress was made at MC13 on the contribution of trade to environmental sustainability, taking forward work on tackling plastics pollution, phasing out fossil fuels and promoting the circular economy, among others.
The Coalition of Trade Ministers on Climate met under the co-leadership of the European Commission to discuss policies on driving decarbonisation. Ministers from 61 countries also adopted voluntary trade-related actions to tackle the climate crisis.
No deal on global fishery subsidies
The EU deeply regrets that a handful of WTO members blocked a comprehensive agreement on global fisheries subsidies. A deal was on the table to build on the outcome reached at the 12th Ministerial Conference, and fulfil the mandate set by the UN Sustainable Development Goal 14.6 to ban harmful fisheries subsidies worldwide.
The EU worked with partners from across the development spectrum to find common ground for a robust deal to expand the rules to prohibit subsidies that contribute to overcapacity and overfishing.
[The failure to reach a deal will have the most adverse impact on Small Island Developing Countries, who rely on sustainable fish stocks for the livelihood of their fishers, which is crucial for their sustainable economic development.]
Industrial policy
We regret that there was no agreement at MC13 to launch deliberations on key trade challenges (Trade and Industrial Policy, policy space for industrialisation, Trade and environment) despite such a deal being supported by the EU and a majority of other delegations. The blockage of this future-oriented agenda by a small number of countries is a setback that weakens the role of the WTO as a key forum to address contemporary challenges.
Further international cooperation will continue to be necessary to address these issues, and the EU will maintain its leadership role in this respect.
No agreement on agriculture
Despite the constructive and pragmatic engagement of the EU and other Members to find compromises towards an agreement, the WTO Members could not agree on advancing agriculture reform at MC13. The divergences across the membership were too large to be solved. This failure is unfortunately to the detriment of the most vulnerable countries who count most on the multilateral trading system.
Dispute settlement reform
AT MC13, WTO members recognised the progress made – and reaffirmed their commitment to finding agreement to restore – a fully functioning dispute settlement system by the end of 2024. The EU has consistently called on the WTO membership to make headway on reforming the dispute settlement system, which is critical to the WTO’s overall legitimacy and to stopping the erosion of trade rules. It is also vital in providing stability for companies to invest and export. However, a solution still needs to be found on a reformed appeal system.
Solidarity with Ukraine
Trade ministers from around the world expressed support for Ukraine at a Solidarity Event, hosted by the EU in the margins of the Ministerial Conference. The event marked the two years since the start of the full-scale war of aggression by Russia against Ukraine. Remembering the victims of the war, WTO Members in attendance reaffirmed their continued support for Ukraine as they called for the end of the war.
Quote(s)
At a time of rising geopolitical tensions and political uncertainty, I welcome that MC13 delivered some positive results for the global trading system. The EU led from the front in all these outcomes, working with partners from around the globe. The decision to extend the e-commerce moratorium, in particular, is crucial for digital trade – a key growth area in the global economy and a top priority for the EU. We also made important progress on development and sustainability, to the benefit of all members. However, we were disappointed at the lack of breakthroughs in a number of important areas. The EU engaged intensively to find deals on fisheries subsidies, agriculture package and a dynamic WTO reform agenda. Agreements were within reach, supported by an overwhelming majority of members, but ultimately blocked by a handful of countries – sometimes just one. The EU will continue to actively support work on a more inclusive and fit-for-purpose global trade rulebook and to show leadership and engagement. We hope all our partners will replicate this can-do approach.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade
Source – EU Commission
Questions and Answers on WTO 13th Ministerial Conference
What were the main outcomes of MC13?
After a week of intense engagement, EU negotiators secured important agreements on new rules toimprove global services trade, environmental cooperation, and strengthening the position of developing countries in the global trading system. WTO Members also agreed to renew the “e-commerce moratorium” until MC14, maintaining duty free trade in online services, including apps, games and software, as well as digitally transmitted content such as music, video, and other digital files.
However, over the past months, the EU had worked for ambitious results to revitalise the WTO at a time of rising geopolitical tensions, including a comprehensive agreement on global fisheries subsidies, and meaningful progress on dispute settlement. The EU regrets that, despite willingness by a large majority of WTO members, it was not possible to find compromises on these issues.
What happened with the ecommerce moratorium?
WTO Members agreed to renew the “e-commerce moratorium” until MC14, maintaining duty free trade in online services, including apps, games and software, as well as digitally transmitted content such as music, video, and other digital files.
The e-commerce moratorium gives businesses and consumers around the world access to a wide range of innovative and affordable electronic services, allowing them to reach new markets or new audiences, and to participate in global value chains or global conversations. In this way, it supports the global digital transition, providing opportunity, legal certainty and predictability in the EU and worldwide. It also supports companies in developing countries – small businesses in particular – by facilitating access to the digital inputs and the online markets necessary to grow their business within and outside of their national borders
The e-commerce moratorium has been in place since 1998 and is crucial for businesses and consumers around the world, enabling them to engage in electronic commerce and to access electronic services more cheaply and more easily.
What happened with the new rules to simplify trade in services?
The EU welcomed the entry into force of new rules to facilitate and simplify trade in services. Businesses will now enjoy clear, predictable and effective authorisation procedures in more than 71 markets. The EU was at the forefront of this initiative, which will support economic growth for us and our partners in the largest and fastest growing sector of today’s economy.
How did MC13 help least developed and developing countries?
The EU played a leading role in delivering outcomes that will integrate developing countries more firmly into the global trading system.
123 WTO Members finalised a deal to facilitate investment and support development. This new Agreement on Investment Facilitation for Development (IFD) aims to harness the economic potential of foreign direct investment to boost development in poorer countries. The next step will be to incorporate this agreement into the WTO rulebook.
The World Trade Organization got two new members, Comoros and Timor-Leste, showing that the WTO is an attractive and relevant organization for developing countries. Responding to the development challenges of WTO members is at the centre of the WTO reform agenda and of the Ministerial. The Conference helped find and define practical solutions such as best practices to improve implementation of the available flexibilities under the special and differential treatment (SDT) provisions, so that developing countries have time and policy space to adapt to the different rules and regulations of the WTO.
What progress has been made on sustainability issues?
TheCoalition of Trade Ministers on Climate convened for the second timeon the margins of MC13. The Coalition has called for stronger engagement by WTO Members on trade, climate and sustainable development, and identifying a number of actions Ministers can take collectively and individually to advance the trade and climate agenda.
A first-ever “Ministerial conversation on trade and environment” took place during MC13, where ministers expressed their desire that WTO Members come together and deliver on sustainable development and reflect on how the WTO can contribute to address the triple global crisis of climate change, biodiversity loss and pollution. Taking policy deliberation forward as part of WTO reform could not only strengthen the WTO as the key international forum for global trade governance but also help members when designing their domestic policies in response to these global challenges.
Three plurilateral initiatives – the Dialogue on Plastics Pollution and EnvironmentallySustainablePlastics Trade(DPP) with 78 members; theTrade and Environmental Sustainability Structured Discussions(TESSD), with 76 WTO members; andFossil Fuel Subsidies Reform(FFSR), with 48 WTO members – have presented the progress they have made to set ambitious work programmes to further these initiatives. Members have developed deliverables in the form of best practices and reports, such as an analytical summary of discussions on environmental goods and services and renewable energy, a compilation of best practices in the development of trade-related climate measures, a mapping on trade policy aspects of the circular economy and a compilation of national experiences on subsidies.
What happened with the Fisheries Subsidies Agreement?
The EU deeply regrets that a handful of WTO members blocked a comprehensive agreement on global fisheries subsidies. A deal was on the table to build on the outcome reached at the 12th Ministerial Conference, and fulfil the mandate set by the UN Sustainable Development Goal 14.6 to ban harmful fisheries subsidies worldwide. The EU worked with partners from across the development spectrum to find common ground for a robust deal to expand the rules to prohibit subsidies that contribute to overcapacity and overfishing.
What was the outcome on agriculture ?
Despite all the efforts of the EU to broker compromises and reach an agreement on agriculture, the WTO Members could not agree on agriculture at MC 13, due to wide divergences of views and unrealistic demands.
The EU strongly regrets that no agreement could be reached, notably because of wide divergences of views, in particular on the issue of public stockholding for food security purpose. While public stockholding programs may be essential for food security, it is important that they are implemented in a way which limits negative impacts on other countries. Politically and economically unrealistic demands on market access could not gather consensus. Negotiations, in order to succeed, have to be realistic and inclusive as well as respect a balance of interests and sensitivities for all Members.
The EU remains committed to working towards reaching a balanced and realistic outcome on agricultural reform at WTO MC14.
What are the priorities for the EU in WTO agricultural negotiations?
The EU is committed to an open, fair, inclusive and transparent multilateral trading system,which delivers on the interest of farmers and contributes to global food security.
The EU considers that the top priority should be the reform of trade-distorting support implemented by many other countries, to the detriment of our farmers. Thanks to the reforms of the CAP, most of support given to our farmers does not have negative effects on trade, contrary to the support given some other countries. It is crucial to advance on “repurposing” the
agricultural subsidies towardsforms which do not have negative impacts on trade. EU’s direct payments decoupled from agricultural production as well as environmental programmes are a good example of such policy. The EU’s policy is a positive example of such direction of reforms implemented in line with the reform objective of the WTO Agreement on Agriculture.
The EU is also committed to deliver on specific outcomes for the most vulnerable countries at the WTO, including in relation to export restrictions. The EU also supports work towards outcomes on cotton which could help the livelihoods of the African cotton producers.
The EU is also open to negotiate on all issues of importance to other Members. In this context, we consider a solution to the issue of public stockholding for food security purposes is needed and should be one of the priorities of our work alongside the reform of trade distorting support.
What happened with Dispute Settlement reform?
AT MC13, WTO members recognised the progress made – and reaffirmed their commitment to finding agreement to restore - a fully functioning dispute settlement system by the end of 2024. The EU has consistently called on the WTO membership to make headway on reforming the dispute settlement system, which is critical to the WTO’s overall legitimacy and to stopping the erosion of trade rules. It is also vital in providing stability for companies to invest and export. However, a solution still needs to be found on a reformed appeal system.
The multilateral rules-based trading system has brought stability and predictability to global trading conditions and has been an engine of prosperity for many decades. The EU has always been and will continue to play a leading role in the WTO’s ongoing reform process. The WTO must now be equipped to deal with evolving 21st century challenges. It is urgent to reform the WTO in its three functions: rule making, negotiations and dispute settlement.
What happened with discussions on industrial policy?
The EU regrets that there was no agreement at MC13 to launch deliberations on key trade challenges (Trade and Industrial Policy, policy space for industrialisation, Trade and environment) despite being supported by the EU and a majority of other delegations. The blockage of this future-oriented agenda by a small number of countries is a setback that weakens the role of the WTO as a key forum to address contemporary challenges.
Further international cooperation will continue to be necessary to address these issues, and the EU will maintain its leadership role in this respect.
What have WTO Members Discussed on Ukraine?
Trade ministers from around the world expressed support for Ukraine at a Solidarity Event, hosted by the EU in the margins of the Ministerial Conference. The event marked the two years since the start of the full-scale war of aggression by Russia against Ukraine. Remembering the victims of the war, WTO Members in attendance reaffirmed their continued support for Ukraine as they called for the end of the war.
Russia’s war of aggression against Ukraine continues to have devastating global and regional impacts, including on Ukraine’s economy and ability to trade. The destruction of significant parts of Ukraine’s transportation, port infrastructure, and grain storage facilities as well as mining of agricultural land is impeding Ukraine’s ability to produce, export, and import normally. This violates the principles and values of the WTO.
WTO members have praised Ukraine’s achievement of reopening grain exports by its Black Sea corridor to the global markets. Russia weaponized food, and hit the world’s most vulnerable with its sea blockade. We welcome the establishment in 2022 of the EU Solidarity Lanes, which allowed the exports of around 67 million tonnes of grain since May 2022 from Ukraine to global markets. This benefits all countries, notably the countries most in need. In this context it is necessary to ensure free, full, and safe navigation in the Black and Azov Seas and ensure that sea routes and ports are not threatened or blocked by threat of or use of force.
Source – EU Commission
Closing statement by Executive Vice-President Dombrovskis at 13th WTO Ministerial Meeting
The EU arrived here in Abu Dhabi with an ambitious and forward-looking agenda to revitalise this organisation and update the global rulebook. Multilateral co-operation within the WTO matters more than ever, at a time of geopolitical tensions, political uncertainty and the growing weaponisation of trade.
I am pleased that we end this long week of complex negotiations with some positive results, notably on e-commerce as well as important progress on development and sustainability.
On digital trade, we are very relieved that the“e-commerce moratorium”is now extended until MC14, maintaining the free trade of online services, such as the transfer of music, film, games, computer software or app updates. This is crucial for businesses – notably SMEs – and consumers around the world, enabling them to engage in electronic commerce and to access electronic services more cheaply and easily.
Almost one quarter of global trade is digital and will only continue to grow in importance.
The EU invested considerable time and political effort to build a coalition in favour of extending this deal to trade digitally without customs duties.
Going forward, we will continue our efforts at the WTO to create a more inclusive, predictable and rules-based global trading system that is fit for the digital economy. In particular, we will seek a long-term solution for customs duties on electronic transmission.
We were also delighted to celebrate the entry into force of the agreement on services domestic regulation. This will make trading for services easier within several dozen countries, to the benefit notably of smaller companies. It will reduce domestic services costs by an estimated savings of 110 billion euros.
Sustainability and Development
We made positive headway in the contribution of trade to environmental sustainability. We took forward the work on tackling plastics pollution, phasing out fossil fuels and promoting the circular economy, among others. The EU also hosted a meeting of the Coalition of Trade Ministers on Climate. Ministers from 61 countries also adopted voluntary trade-related actions to tackle the climate crisis.
The EU also played a leading role in delivering outcomes that will integrate developing countries more firmly into the global trading system. Some 123 WTO Members finalised a deal to facilitate investment and support development. This new Agreement on Investment Facilitation for Development (IFD) aims to harness the economic potential of foreign direct investment to boost development in poorer countries. The next step will be to incorporate this agreement into the WTO rulebook.
The accession of two new LDC members – Timor Leste and Comoros – to the WTO this week, highlights the value countries around the world still place on a shared global rules base for trade and investment. Ministers also adopted a decision to help least developed countries as they graduate to a higher level of development.
Beyond supporting least developed members, WTO members took a step towards improving clear and effective implementation of special and differential treatment for all developing countries in the key areas of standards for market access.
Separately, many members here attended our Solidarity for Ukraine event on Sunday, two years since the start of Russia’s brutal and illegal invasion. Attending countries pledged to facilitate Ukrainian exports and supply chains.
Fisheries and Agriculture
We were however disappointed at lack of breakthroughs on agriculture and on fisheries.
We did not progress on an agriculture package, to the detriment of most vulnerable countries, despite our pragmatic engagement. Divergences were too large to be solved.
We deeply regret that it was basically just one WTO member that blocked a comprehensive agreement on banningharmful fisheries subsidiesworldwide.
A deal was on the table to build on the outcome reached at the 12th Ministerial Conference, and fulfil the mandate set by the UN Sustainable Development Goal 14.6.
It is unfortunate that a failure to reach a deal will have the most adverse impact on Small Island Developing Countries, who rely on sustainable fish stocks for the livelihood of their fishers, which is crucial for their sustainable economic development.
Dispute settlement reform.
The EU has consistently called on the WTO membership to make headway on reforming the dispute settlement system, which is critical to the WTO’s overall legitimacy and to stopping the erosion of trade rules.
WTO members recognised the progress made and reaffirmed their commitment to restoring a fully functioning dispute settlement system by the end of 2024. However, a solution still needs to be found on a reformed appeal system. Again, it is disappointing that there was no breakthrough on appeal, despite the overwhelming support of the membership.
The EU will continue to actively support work a more inclusive and fit-for-purpose global trade rulebook and to show leadership and engagement. We hope all our partners will replicate this can-do approach.”
Source – EU Commission
Council conclusions at the end of the 13th Ministerial Conference of the World Trade Organization
- The Council was informed by the Commission on the latest developments in the 13th WTO Ministerial Conference.
- The Council takes note of the results on the least-developed countries graduation proposals and special and differential treatment, as well as the instruments mentioned below.
- The Council approves:
- the Ministerial Decision on dispute settlement reform (WT/MIN(24)/W/22)
- the Ministerial decision on the Work programme on small economies (WT/MIN(24)/W/2)
- The Council approves the Abu Dhabi Ministerial Declaration (WT/MIN(24)/W/12/Rev.1).
WTO Ministerial finds interim solution on e-commerce – BusinessEurope
The 13th WTO Ministerial, which ended today in Abu Dhabi, found a solution until the next Ministerial meeting for the e-commerce moratorium. Commenting on the outcomes, BusinessEurope Director General Markus J. Beyrer said:
“Our expectations were not overly ambitious ahead of the 13th WTO Ministerial given the increasing global divisions about how trade should be disciplined. In this context, the results from MC13 are not ideal but they are better than expected. WTO members agreed to extend for the last time the e-commerce moratorium until the next Ministerial. This was the major business request and is an important step towards preventing new barriers to trade. It adds an obligation for WTO members to find without delay a negotiated solution that renders the moratorium permanent.
We also welcome that the WTO members recognised the importance of safeguarding intellectual property to promote innovation, by avoiding a further extension of the TRIPS waiver. We expect to see a solution regarding the Appellate Body by the end of the year to ensure that existing rules remain enforceable.”
Source – BusinessEurope (via email)