WTO: Outcome of Nairobi round

In December of last year, the World Trade Organisation (WTO) held its tenth Ministerial Conference. It was WTO’s first such gathering on the continent where trade as a contributor to development and prosperity is vital. The outcome of the meeting was a mixed bag. One of the major results that came out of Nairobi is that the Doha Development Round is dead in the water, and the world has moved on from that stalled round.
An important issue is the relevance of WTO. Experts such as Dr Shekhar Shah, former economic advisor to the World Bank argues that after the new trade initiatives such as the Trans-Pacific Partnership, one must come to the conclusion that the WTO is dead. This view is also echoed by other experts in developing countries since WTO has struggled to negotiate new commitments in recent years. However, Dr. Vaqar Ahmed of SDPI disagrees. He contends that until the time new trading arrangements become successful, the WTO will continue to provide the overarching framework for the exchange of goods and services. Furthermore, mega-regional trade agreements such as TPP cannot provide for dispute resolution and consumer welfare as laid down under WTO.
The deliberations of the moot touched upon issues that have put the last nail in the coffin of Doha round. The final declaration states that many members believe that “new approaches” are needed to move negotiations forward. The discussion in Nairobi has made it clear that the landscape for the WTO as an institution and a negotiating forum for the global trade would look significantly different in the post-Nairobi world. However, many developing countries including India have shown their displeasure with the new path taken by the WTO.
The most significant outcome of the WTO meeting is creation of a level playing field for agricultural exports. The advanced economies have decided to eliminate export subsidies for agricultural export. However, it is worth noting that the new agreement only covers export subsidies, as no concessions have been made on domestic subsidies that remain in place. The developing countries have been given until 2018 or 2020 on the products for which export subsidies were notified. Also, WTO members have agreed to new rules to discipline the activities of state-owned trading enterprises in agricultural and to limit the benefits of export financing support. Lastly, WTO members called for duty-free and quota-free access for cotton from least-developed countries (LDCs).
Decisions were reached for the specific benefit of LDCs, including enhanced preferential rules of origin and preferential treatment for services providers. The rules of origin agreement establish a set of guidelines to make it easier for exports from LDCs to qualify for preferential market access. Regarding services, a waiver was agreed whereby non-LDC Members can grant preferential treatment to LDCs without breaching their WTO obligations.
The WTO has agreed to expand the Information Technology Agreement to eliminate import duties on 201 IT products, which account for over $1.3 trillion of global trade per year. The negotiations commenced in 2010 and had involved members representing the major exporters of IT products. The elimination of duties will be staged with 65 percent of the list of products becoming duty-free on July 1, 2016, and the duties affecting almost all of the outstanding products phased out by 2019. Finally, at Nairobi the neighbouring country Afghanistan has become a full-fledged member of the WTO.
For Pakistani agricultural exports, Nairobi meeting brought some blessings according to the trade minister who states that Pakistan will have a level playing field after the elimination of agriculture export subsidies. However, Dr. Vaqar Ahmed says that Pakistan enjoys market access arrangements such as GSP/FTAs but faces different challenges such as raising productivity by addressing energy and regulatory barriers. Also, the country’s export subsidies are small compared to competitors and there is pressure from IMF to reduce them further.
It is unfortunate that Pakistan has not acceded to ITA and has opted to stayed away from it. For the larger good of IT exports, ITA can become a substantial help. Similarly, sooner or later Pakistan and Afghanistan will go into WTO litigations since Pakistan has refused to sign a motor vehicle agreement and to open up the road link for India and Afghanistan until now.