World Trade Organization Makes Scant Progress on Revising Rules

Ministers from 164 countries concluded negotiations at a biennial World Trade Organization meeting Wednesday without agreements on how to modernize global trade rules, underscoring concerns about the global commercial arbiter's ability to resolve trade disputes.

Countries from the U.S. to India and South Africa clashed over how to regulate everything from electronic commerce to illegal fishing as trade ministers questioned the WTO's efficacy at a time when the Trump administration is questioning the way multilateral organizations approach conflict resolution.

"Clearly this organization is not working well," said Pascal Kerneis, managing director at the European Services Forum, which represents service-industry firms in international trade talks. "There are countries that came here and clearly said in their speeches that they don't want to move their positions at all."

But while expectations for a breakthrough at the summit were low, many participants had hoped to find ways to foster e-commerce and combat illegal fishing.

Progress was minimal and while the U.S and 70 WTO members agreed to "initiate exploratory work" on e-commerce issues, trade ministers waited until the last minute to renew a 1998 moratorium on imposing duties on electronic-commerce transactions. It was nerve-rattling for technology companies following the talks, executives said.

Alibaba Group Holding chairman Jack Ma this week urged WTO members to keep the moratorium, saying new regulations could stifle growth and hurt smaller companies and startups in the developing world.

The U.S. and other countries said they were pleased to be among the WTO members that will begin work on e-commerce negotiations. Such talks are considered a precursor to a potentially broader WTO-wide agreement.

"Initiatives like this among like-minded countries offer a positive way forward for the WTO in the future," U.S. Trade Representative Robert Lighthizer said in a statement.

The new e-commerce talks are important "because it's a sign of support for...negotiations under the WTO umbrella at a time when people are worried the U.S. is not committed to the WTO," said William Reinsch, a veteran Washington trade-policy maker and lawyer, now a fellow at the Stimson Center think tank. But, he added, "it does not have immediate practical significance unless you think they'll be starting talks early next year."

Many trade representatives were also critical of U.S. efforts to stymie the WTO's dispute-resolution system, which relies on a seven-seat appellate court to settle complaints. The U.S. has blocked attempts to replace judges on the court, which will soon be down to just three justices, WTO officials say.

"It is one of the most important issues as of now to protect the WTO," Suresh Prabhu, India's trade representative, said earlier in the week. "The dispute-settlement mechanism is a very important part of the WTO, so we should definitely keep that in mind."

Some trade officials said in private meetings that the U.S. had abandoned its role as a lead advocate of multilateral consensus, making it harder to reach big agreements.

Mr. Lighthizer left the talks a day before the summit concluded, and after saying Monday that the WTO was "losing its essential focus on negotiation and becoming a litigation-centered organization."

Many negotiators were also disappointed over failure to protect the world's oceans from illegal fishing that depletes deep-sea species and destroys coral formations that take hundreds of years to evolve.

Rémi Parmentier, a political adviser at Bloom, an advocacy group that works to preserve marine environments, said governments spend as much as $30 billion annually to subsidize illegal fishing. He said global leaders had agreed at the United Nations in 2015 to eliminate such subsidies by 2020, and now those hopes seem dashed.

The WTO's "members cannot even agree to stop subsidizing illegal fishing. Horrendous," the European Union's trade commissioner Cecilia Malmström said in a Twitter post Wednesday.

Mr. Lighthizer supported the EU's position, saying on Twitter that subsidized illegal fishing "is an existential threat to the planet."

Roberto Azevêdo, the director-general of the WTO, said in closing comments that the summit's results were particularly disappointing.

"In taking this work forward we need to do some real soul searching," Mr. Azevêdo said.

Jacob Schlesinger in Washington contributed to this article.

(END) Dow Jones Newswires

December 13, 2017 18:04 ET (23:04 GMT)