The position of the World Trade Organisation (WTO) as the preferred platform for trade deals has been getting battered as countries across the world bypass it and enter into regional free trade agreements. At the last count, there were 253 agreements that have been notified to the organisation.
Among the recent ones is the Tripartite Free Trade Agreement signed in June 2015 that brings together 25 African countries, among them Kenya, in a single bloc that starts from South Africa to Egypt.
The deal was signed between three regional trade areas—East African Community, Southern Africa Development Community and Common Market for Eastern and Southern Africa. Outside of Africa, the US has recently signed the Transpacific Partnership (TPP) with 12 nations on both sides of the Pacific Ocean.
Six other nations have shown interest in joining TPP. US is also aggressively pursuing the Transatlantic Trade and Investment Partnership (TTIP), a free trade agreement with the European Union. To WTO, the frequency of regional free trade agreements is almost a signal that it is no longer relevant in the ambitions of nations to develop their share of global trade.
Instructively, just in October, WTO director-general Roberto Azevedo addressed himself to the growing trend where nations are more comfortable making trade deals in their region and bypassing the global body. “As I have said many times, these initiatives are important for the multilateral trading system (WTO) but they cannot substitute it.
To start with, there are many big issues which can only be tackled in an efficient manner in the multilateral context through the WTO,” he said in a published statement. But even as Azevedo fights to maintain the relevance of the organisation he has led since 2013, many see the new regional trade deals as a walk away from WTO.
Certainly, this is how Stuart Harbinson, a former WTO chief of staff who currently works for the United Nations Conference on Trade and Development sees it. Writing for the European Centre for International Politics and Economics in September, Harbinson said frustration over WTO negotiations—the 2001 Doha Round in particular—has bred indifference in many capitals.
“Other forms of trade negotiation have been prioritised. Understandable to some extent as this may have been in the past, the risks to the global trading system are now increasing all the time,” he said. The main issues of negotiation at the WTO are the same ones that the developing nations and rich economies have been spurring over in the so-called Doha Development Round.
They include agriculture, non-agriculture market access such as industrial products from developing countries and trade in services such as higher education. Over the 15 years that the Doha Round has been ongoing, the common outcome has been impasse; save for 2013 when a Bali agreement on trade facilitation regarding customs processes was hammered out.
Azevedo himself has already smelt another ‘impasse’ on the Doha Round in Nairobi, if his statement released to the Inter Press Service on December 11 is anything to go by. In the statement, he captured the dilemma the organisation faced on the eve of the conference.
“So how do we take forward the outstanding Doha issues after Nairobi? Opinions are quite divergent on this point. Some members argue that we must keep working on Doha because it is vital for development—and that while Doha is not concluded we must not divert our focus to discuss anything else,” he said.
“Others argue that after years of limited success under the Doha architecture, it is unlikely that this framework could yield any further progress, especially on the more difficult issues. Therefore, these countries are reluctant to continue engaging in negotiations under this current framework. “Obviously, it is difficult to reconcile these views,” said Azevedo.
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