A crucial meeting aims to remake the WTO to fit the new global order

With the global rules-based order collapsing, the United Nations faces an existential crisis as the United States leads other countries in defunding and withdrawing from key agencies such as the World Health Organization.

The World Trade Organization (WTO) may soon join the endangered list.

On March 26, its 166 member states will meet for their 14th Ministerial Conference over three and a half days in Cameroon. Dubbed a “reform ministerial”, this is unlike any since the WTO was established in 1995.

Whether the organisation will survive these “reforms” is uncertain. Whether it should survive will be even more controversial.

This biennial ministerial conference occurs against a backdrop of war, accelerating climate change, geopolitical polarisation, coercive unilateral trade sanctions, fractured supply chains and competition to control critical mineral resources.

But none of that will be addressed.

Instead, reform proposals driven by its more powerful members – carefully curated through an unorthodox process over the past year – are being pushed ahead without a consensus of members and despite repeated objections from a number of developing countries.

The US agenda

Significantly, the Trump administration has not formally withdrawn from the WTO. Instead, the US has demanded reforms that would legitimise the use of tariffs against other countries and shield its actions from challenge via the WTO’s dispute system.

It repeated those demands three days before the meeting, asserting “the current global order in international trade, overseen by the WTO, is untenable and unsustainable”.

Middle powers such as New Zealand, Australia, Norway and the United Kingdom – so-called “friends of the system”, whose economies are premised on the WTO’s free-trade model – are supporting this process.

New Zealand Trade and Investment Minister Todd McClay has been reappointed vice-chair. As a minister-facilitator he will be responsible for steering through the reform agenda.

New Zealand’s ambassador to the WTO, Clare Kelly, has been chairing the Dispute Settlement Body, which the US has paralysed by blocking the appointment of new judges.

She will merely “update” members at the meeting, with no discussion of revitalising the appeal process (or the hotly disputed weaponisation of tariffs by the US) on the agenda.

Next year, the ambassador will chair the WTO General Council in charge of implementing the reform agenda.

Changing the rules

Three items dominate the first two days of a packed program. Their titles sound relatively innocuous, but the intent is to rewrite the fundamental tenets of the WTO: multilateralism, most-favoured-nation treatment, consensus decision-making, and development.

“Decision-making” aims to dilute the multilateral model that accords all states an equal voice irrespective of their relative size or wealth.

Article Ten of the Marrakesh Agreement which established the WTO – its constitution – mandates decision-making by consensus. Reformers have proposed an alternative of “responsible consensus” which will make it easier to push through preferred outcomes.

Multilateral negotiations involving all WTO members will give way to deal-making among groups of countries. This plurilateral approach will allow more powerful members to negotiate on their favoured topics and marginalise developing countries’ priorities.

Under “development and industrialisation”, the aim is to limit how countries define their own level of development. “Special and differential treatment” would simply allow them more time to adopt the rules that already apply to (and work for) developed countries.

This would ignore calls by developing countries for genuine reform to support industrialisation in ways that help their own economies.

“Levelling the playing field” is essentially about China, which the US asserts has now gained an unfair advantage since joining the WTO.

The US wants new rules to restrict state support for industry and to limit the application of most-favoured-nation treatment that ensures all WTO members are treated the same.

In practice, these reforms will fall most heavily on state-supported industrialisation in poorer countries, not China. Meanwhile, the unlevel playing field on agriculture, which allows the US and European Union to maintain massive subsidies, remains off the agenda.

Developing countries left out

The meeting agenda is inseparable from the process. Six facilitators from countries aligned to the reform agenda will oversee breakout groups at the meeting that poorer countries will struggle to engage in.

The facilitators’ summary reports will be consolidated into a “single takeaway” document, which ministers are asked to endorse. This will inform the next “facilitated” implementation phase at the WTO headquarters in Geneva.

The agenda provides little time for collective discussion by all members, corrections or alternative reform proposals. Nonetheless, the US has advocated for an even quicker and more streamlined process.

Nor is the US alone in seeking to remake the WTO. Many of the EU’s demands mirror those from Washington, with the middle powers in support. It’s likely the reform agenda will be endorsed at the Cameroon meeting and continue back in Geneva.

Many developing countries fear their own priorities, which have been supported by previous formal mandates, are now effectively gone. With their voices further marginalised, they will need to assess whether they even have a future at the WTO.