Countries at the WTO conference in Kenya will try to save the regulator from new challenges


NAIROBI, December 15. Representatives of the countries members of the world trade organization (WTO) will be discussed at the Ministerial conference in the Kenyan capital Nairobi the future of the organization, which is under question due to the active use by countries of protectionist measures to protect national economies from the crisis, but also due to the creation of new regional trade alliances, which play a growing role in world trade.

The key question of the conference, to be held 15-18 December is the future of the Doha round of negotiations, the last of nine rounds of international trade negotiations that have defined the rules for world trade.

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The Doha round, which has continued without result for 14 years, had to open a new stage in the development of the WTO. The Doha round began in 2001 with the aim of reducing the number of customs tariffs on trade in agriculture and industrial goods, remove non-tariff barriers and to reduce subsidies for the development of agriculture. Developing countries were to become the main beneficiaries of these negotiations that could open the markets of developed countries for their products.

However, while the majority of the Doha round negotiations have not reached the final point and obviously will not reach it and in Nairobi, said the head of the Department of trade negotiations Ministry of economic development Maxim Medvedkov.

“In particular, are not completed negotiations on market access of goods, due to the fact that countries differ widely in their assessments, on the basis of what methods these negotiations to reduce tariffs should go. For the same reasons have not reached some reasonable point in the negotiations on market access for services, for the most part of trade rules. In Nairobi, the Ministers must make a key decision: what to do with the Doha round negotiations”, – he explained to journalists.

Successful completion or continuation of the Doha round will help to preserve the role of the WTO in regulating world trade. Many experts argue that the WTO is inferior to the role new global trade alliances, such as the Eurasian economic Union (EEU) or the TRANS-Pacific partnership (chamber of Commerce). The final failure of the negotiations will put the future of the organization under question.

The countries-participants of the WTO there is no consensus about what to do with the negotiations. So, developing countries led by India are of the opinion that the Doha round should be completed in full, and no matter how much time it will take 5 years or 15.

To admit, that failed

Another group of countries – USA, Canada, some European countries – believes that the Doha round has run its course.

“Time for 14 years in the country are unable to agree, the process must stop and admit that they have not fulfilled this mandate. Instead, the mandate to produce another, which would include new elements, because for 14 years in global trade have fundamentally other tasks, for example, in the system of regulation of issues associated with value chains, or regional trade agreements”, – said Medvedkov.

Some progress in the Doha round occurred in 2013, when it was adopted the Bali package is the first legally significant since the founding of the WTO. Thus, on the basis of Balinese stage, the countries officially adopted the agreement on trade procedures, the five documents of the agricultural unit, including an agreement on food security and the Declaration on export competition, and four documents included in the unit to support least developed countries.

World trade organization – the largest multilateral international framework governing trade and political relations of the parties on the basis of a number of binding agreements. The main objective is to further develop international trade and ensuring economic operators a fair competitive environment.

The WTO is the successor in force since 1947 the General agreement on tariffs and trade. Now included in WTO countries and territories accounted for 98% of world trade. Russia joined the WTO in 2011 after 18 years of negotiations, however, still many businessmen, politicians and experts have expressed doubt in expediency of this step. The Russian delegation will be headed by the Minister of economic development of Russia Alexei Ulyukayev.

Kazakhstan, Russia’s partner in the Eurasian economic Union should officially become a WTO member at the conference in Nairobi.

Another important question that would be raised in Nairobi, – the compliance with WTO rules of the new regional agreements, including the TRANS-Pacific partnership (TPP), as well as strengthening the organization’s role in monitoring such agreements.

The negotiations to establish TPP are 16 countries in the region, including the U.S. and Japan. China is not a party to the negotiations to establish TPP and instead promotes the concept of an Asia-Pacific free trade area (FTAAP). Russia is wary of the establishment and the TTP is not involved in the negotiations. Putin in an article published on the eve of the APEC summit in November, said that the private nature of the negotiations to establish TPP is not conducive to the development of the region.

In his address to the Federal Assembly, Putin called for the elaboration on the creation of large-scale economic partnership between the countries of the Eurasian economic Union (EEU), Shanghai cooperation organization and ASEAN, noting that together these countries account for almost a third of the world economy at purchasing power parity. Meanwhile, Russia insists that new trade agreements should be based on WTO principles.

Regional alliances require serious intervention

Medvedkov stressed that for many countries today, it is obvious that the growing number of regional agreements requires monitoring and a more serious intervention by the WTO.

“It is necessary to ensure that regional agreements developed on the basis of the rules that are already in the WTO and that can be expanded,” he said.

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However, he stressed that in Nairobi will be included in the final Declaration item in which the Ministers recognized that the WTO is the main organization for the implementation of rules for global trade and that regional trade agreements should be subordinated to the WTO rules in the future.

“The Ministers, including from the countries of the TPP, in Nairobi confirmed the primacy of the WTO rules and what they are willing to submit to the regional transactions,” he said.

However, how these intentions will be realized, is under discussion.

“There is a proposal on rules regional trade agreements: they are to create within the WTO a permanent transparency mechanism for regional trade agreements and to strengthen the role of the Committee on regional agreements – the WTO body exists – in the analysis of new agreements for compliance with WTO rules”, – said Medvedkov.

He stressed that we are not talking about the possibility of a ban of the regional agreements, namely on strengthening the role of the WTO in this area.

With regard to certain trade issues, the negotiations are almost completed only in three directions.

So, according to Medvedkov, the Ministers will be invited to take a decision on the work programme in the field of electronic Commerce and for the next two years to forego customs duties on electronic transmission (transmission of electronic data, for example, BY sale). According to Russian law, such fees are not established, although such proposals were repeatedly voiced by Russian politicians.

Another point, which actually has the consent of Ministers, the principle of abstinence from dispute settlement procedures for the protection of intellectual property rights for reasons not related to the violation of the WTO agreement.

Also reached an agreement in principle on a ban on the use of export subsidies in agriculture. This item is very important for the Russian producers, especially specializing in the production of meat and milk. Such subsidies create unequal conditions for competition with manufacturers of other countries, unlike our grants and have the capacity to keep lower prices for their products.

“The only disagreement here is when this obligation will come into force in 2020 or 2026,” said Medvedkov.

In addition, will address issues concerning the rules for food aid and state trading enterprises to support the export of agricultural products.

Russia’s Position

Prime Minister of Russia Dmitry Medvedev, speaking at a meeting of the Council of heads of governments of the SCO member in an expanded format, said that Russia is not against international partnerships and associations, but pointed to the need to establish uniform rules of action in the economic sphere due to lower the indicators of international trade and the increased volatility of currencies.

There are still serious economic challenges, continue to decrease the indicators of international trade, investment activity, increased the volatility of currencies, in any case, many currencies, combined with a very sharp fluctuations of world prices for energy resources and raw materials

Dmitry Medvedev