By: Ade O’NEAL
Reform of the World Trade Organization (WTO), trade facilitation, and under-representation by Caribbean States at the WTO were some of the hot-button issues ventilated over the course of the two-week Study Tour in Geneva organized for students enrolled in the Masters in International Trade Policy (MITP) Programme at the Shridath Ramphal Centre for International Trade Law, Policy & Services (SRC) of The University of the West Indies. During the Study Tour, which is a key component of the MITP Programme, students engaged with academics, ambassadors and other diplomats, agency heads and fellow students to gain a greater appreciation for all things trade.
A Broken Multilateral System & WTO reform
We have heard it before – the multilateral system is under threat; small island states do not get their money’s worth from participating in multilateral institutions; and it is a waste of taxpayers’ money. These statements stem from our population’s inability to see tangible gains from engaging in the multilateral system coupled with increased instances of protectionism and insularity across the world. Critics also use the failure to conclude the Doha Development Round and the Antigua Gambling Dispute to peddle the narrative of a broken multilateral system.
At its core, the WTO is a forum that allows for the reduction of obstacles which impede international trade, while at the same time ensuring a level playing field for small states. In a recent interview at the residence of Barbados’ Ambassador to Geneva, Barbadian Matthew Wilson, Chief Advisor and Chief of Staff to the Executive Director of the International Trade Centre, stated that:
For small states multilateralism is extremely important. It is where we have a voice. It is where we have open dialogue where we can put our priorities on the table. It is very important that we be rule makers and not rule takers and the best way to do that is to be involved in the multilateral process.
Notwithstanding this advice, Barbados and its CARICOM neighbours’ voice is often missing from topical issues which affect them in the multilateral environment ranging from e-commerce to WTO reforms.
There is no shortage of WTO reform proposals under discussion. The European Union, Canada, Japan all have their own proposals addressing same. These proposals address inter alia the:
- Self-Classification Mechanism – At present this mechanism allows countries to determine their classification i.e. developed or developing country status. Currently 2/3 of the membership claim developing country status. These countries include large economies like China to smaller economies like Barbados. Some proposals proffer alternatives to this mechanism of self-designation such as using metrics and criteria to determine the development status of each member.
- Full Consensus – At present, all negotiations are concluded by consensus of all WTO Members. With 164 WTO Members to date, a consensus approach to decision making has the potential to delay the conclusion of agreements. Some proposals encourage the use of a majority mechanism where negotiations can be concluded in the absence of full consensus.
- Transparency Obligations – Stronger commitments are being sought to ensure more effective notification by WTO Members to ensure greater monitoring of compliance with obligations.
There are no proposals from Barbados or CARICOM addressing the above. The three examples above would have implications for us. For example, if WTO Members agree to eliminate the self-designation approach to developing country status, and use instead criteria proposed by some countries, this may be detrimental to CARICOM countries. For example, the US has proposed the use of a high gross national income (GNI) per capita as disqualifying criteria which would mean that Barbados would be classified as a developed country, with the consequence that it could not access special and differential treatment at the WTO. Similarly, more onerous transparency obligations would result in a further strain on our human capacity in our CARICOM states.
Barbados has a highly open economy, which means we depend on international trade. It is therefore imperative that this trade is conducted as seamlessly as possible.
Trade facilitation refers to the process of improving the efficiency of the movement of goods through ports as well as the simplification, harmonisation, use of new technologies and other measures to address procedural and administrative impediments to trade.
The World Customs Organization indicates that trade facilitation initiatives benefit the private sector, governments and consumers. The private sector is benefitted because trade facilitation enhances competitiveness through reduction in delays and costs; the government is benefitted because it leads to more efficient collection of revenues as well as economic development resulting from increased trade; and consumers are benefited because lower customs charges may lead to more competitive prices.
Delays at the border can be barriers that are much more restrictive than the duties on imports, that is, tariffs. So while Barbados can remove tariffs to make trade and investment more attractive, without accompanying trade facilitation measures it would be difficult to fully take advantage of opening up our market.
It is therefore essential that our processes work and function correctly due to our dependence on imports, exports and investment.
It was difficult to overlook the small number of CARICOM officials present in the multilateral institutions in Geneva. This poses a risk for us. As Chester Karrass stated eloquently, “You don’t get what you deserve, you get what you negotiate.” Therefore, if we are not at the table to negotiate, chances are our views will not be seriously considered. Issues peculiar to the Caribbean are often considered in the wider gambit of Latin America and the Caribbean.
The benefit of being represented is that you have the opportunity to shape the conversation. Jamaican-born, Pamela Coke-Hamilton, who also serves as Director of International Trade and Commodities at UNCTAD lamented the need for greater involvement of the region in developmental organisations. She opined that there was no substitute in getting priority areas addressed. In preparing for greater representation in the multilateral system there needs to be greater preparation and collaboration across ministries and agencies in the Caribbean. Further, governments should invest heavily in disciplines which prepare trade professionals to navigate in this arena. The MITP is but one.
All things considered, Barbados should remain committed to the ideals of multilateralism while at the same time condemning any attempts which seek to undermine the fairness and equity of this system. In my view, therefore, in concert with its CARICOM neighbours, Barbados should:
- Lobby for greater reforms to the WTO which take into account the challenges the current framework pose to small States;
- Lend its voice to developmental issues by developing concrete proposals for discussion.
Mr. Ade O’Neal is currently a student of the Masters in International Trade Policy (MITP) programme offered by the Shridath Ramphal Centre for International Trade Law, Policy & Services of The University of the West Indies, Cave Hill. The SRC is the Caribbean’s premier trade policy training, research and outreach centre.