The symptomatic regression of the WTO multilateralism norm
Updated: Feb 27, 2021
Being the premier international organization for trade-related matters entails high expectations. Such is the burden of the World Trade Organization (WTO) in its goal to promote, monitor, and safeguard the sacrosanct multilateral trade system. As global trade continues to grow and trade issues increase in complexity, the role of WTO and the significance of the trade multilateralism norm it espouses further deepen. With this, the world expects WTO to be the catalyst of broader trade multilateralism grounded on open trade. However, WTO has fallen short in meeting this expectation as it evidently struggles to pass agreements that would further promote the multilateral trade system.
Since its establishment in 1995 following the General Agreement on Tariffs and Trade (GATT) signed in 1947, WTO negotiations have been fraught with tension, discontent, and deadlocks. The protracted Doha Round launched in 2001 took more than a decade to negotiate–still without success– that it has been arguably abandoned by member-states. A dual coalition negotiating dynamic usually etched between developed and developing countries dominated negotiations that rendered it unsuccessful. The roles assumed by each side vary tremendously depending on the issue being discussed. But what is most alarming is that agreements became elusive because member behavior symptomatic of the regression of the WTO multilateralism norm arose.
Farm subsidies had been one of the bottleneck issues during the Doha Round. The chief contention regarding state-funded farm subsidies is that these pose an unfair advantage to foreign commodities, especially when substantial amounts of subsidies are extended by the government, such as in the US and EU. Developing countries demand the reduction of these farm subsidies, in line with WTO principles of nondiscrimination and fair competition. Developed countries responded by asking for additional concessions from developing countries as a bargaining chip and shifting their subsidies to a less market-distorting type. The repeated clash that broke out during negotiations were further aggravated by developed-country policies that maintained and even increased farm subsidies – specifically, the EU Common Agricultural Policy and the US Farm Bills – despite ongoing WTO negotiations pushing for their reduction.
The recurring impasse caused by the issue of farm subsidies highlighted the developed countries’ propensity to act in contrast with the WTO multilateralism norm. The efforts of developing countries to defend the norm and the rejection of developed countries to concede, along with the attempted justification of farm subsidies, underscore the symptomatic regression of the norm on the side of developed countries.
Developed countries are not the only ones guilty of behaving against the WTO multilateralism norm, so too are developing countries. India has been the leading developing country opposing existing WTO disciplines regarding public stockholding, beginning in the 2013 WTO Bali Ministerial. With the aim of reducing poverty and ensuring food security, India and other developing countries argued that public stockholding is a critical policy in meeting the needs of the poor, especially when procurement is administered above the current market price; hence the need to remove any restrictions governing it. Developed countries strongly oppose these demands as they insisted that unrestrained public stockholding goes against WTO principles.
Despite the sidelining of the Doha Development Agenda a decade after its launch, newer issues such as public stockholding continued to steer negotiations away from multilateral outcomes. The objective of India and other developing countries to afford more space for policies leaning towards poverty reduction, rural development, and food security changed the dynamics of negotiations. Developing countries who defended the WTO multilateralism norm in the case of farm subsidies during Doha Round negotiations became the ones manifesting behavior symptomatic of norm regression. This shift can help explain why multilateral outcomes continue to be scarce in WTO negotiations post-Doha Round.
Despite its struggle to pass multilateral agreements, the WTO fulfills its other functions. It serves as a forum for negotiations and dispute settlement, which member-countries intensively utilize. In this light, member commitment towards the WTO multilateralism norm is clear, since participation in ministerial meetings and smaller negotiations remain consistent. Nonetheless, participation in multilateral negotiations is only but one side of the coin. Commitment to the WTO multilateralism norm must come with concrete outcomes in the form of multilateral agreements. Ending negotiations without any concrete outcome is not always favorable. Perhaps this is the very reason for the proliferation of bilateral and regional agreements outside the purview of WTO, where the promise of new agreements is evidently more probable.
The past years for WTO have not been easy. Immediately after its establishment, member-countries have been restless in seeing outcomes delivered, particularly in agriculture. Apparently, the internalization of the trade multilateralism norm espoused by GATT and WTO is not yet the story’s happy ending. Instead, it may have just been the start of a series of tests on the saliency of the organization and the norm it represents, as previous events have shown. Is it then the end of WTO multilateralism? Most probably not. Member participation continues, compliance with existing WTO disciplines remains relatively the same, and perceived violations and deviancy by other members continue to be called out and chastised. Regressive behavior has not yet been normalized.
A warning, however, must be raised. The Organization and its members must cooperate in delivering multilateral agreements for confidence to be restored to the Organization, especially against the backdrop of the COVID-19 pandemic. This pandemic can potentially be a “make it” or “break it” opportunity for the WTO and its members to reverse the symptomatic regression of the norm, which has transpired over the years. Multilateral agreements equally beneficial to all members must be passed vis-à-vis the sensitive areas related to the pandemic. Failure to do so in this critical time will only further bring the WTO multilateralism norm down the path of regression.
Jules Gerard V. Arceo is a senior high school faculty member at Tarlac Montessori School. He also taught at Tarlac State University as a lecturer for three years. He graduated cum laude from the University of Santo Tomas with an A.B. in Asian Studies. He also holds an M.A. in International Studies major in Asian Studies from De La Salle University, Manila. His research interests include international political economy, alliances, and global cooperation.