After four days of intense discussions, the World Trade Organization (WTO) ministerial conference in Yaoundé ended on Monday without an agreement on key issues (reform, e-commerce, and agriculture), against a backdrop of strong tensions between India, Brazil, and the United States.
The WTO’s moratorium prohibiting the imposition of tariffs on digital trade, in place since 1998, has expired. This is a significant setback for developing countries, who were calling for its renewal, with the United States at the forefront.
“The inability of WTO members to reach a concrete political agreement in Yaoundé is particularly concerning,” said John Denton, secretary-general of the International Chamber of Commerce. Despite this, it does not automatically mean tariffs will be imposed. However, concerns remain amid global economic tensions.
“We worked hard on several issues,” said WTO Director-General Ngozi Okonjo-Iweala, stating that “we simply ran out of time.” The conference, with 166 member countries, was supposed to conclude on Sunday afternoon. The lack of outcome disappointed many, including UK Secretary of State for Business and Trade Peter Kyle, who called it a “major setback for global trade.”
Negotiations on various topics entered a tough bargaining phase on March 28. No compromises were expected on agriculture due to deep disagreements. However, talks on WTO reform seemed close to adoption, albeit minimally, according to diplomatic sources and experts. Tensions arose on March 29, particularly when Brazil linked e-commerce negotiations to the agricultural issue as a protest against the lack of agreement. Several countries refused to move forward with reform without progress on e-commerce.
Agriculture, being the sector with the least progress in the WTO’s 30-year history, was a major sticking point. Efforts to establish a work program on agricultural negotiations have been ongoing for years. The goal in Yaoundé was to adopt a declaration laying the foundation for further agricultural discussions in Geneva, Switzerland.
Members also failed to agree on the priority issue of WTO reform, which aimed to establish a roadmap to revitalize the institution amid geopolitical tensions, negotiation deadlocks, and rising protectionism. Disruptions in global trade due to conflicts in the Middle East further complicated matters.
The WTO, with its dispute settlement mechanism partially paralyzed due to Washington’s judge appointment block, struggled to conclude agreements due to consensus rules. Reforms in multiple aspects are needed to overcome a deep crisis challenging its central role in international trade regulation. The completion of a reform agreement was also tied to resolving another issue concerning e-commerce tariffs.
As is customary at ministerial meetings, countries negotiated the extension of a moratorium prohibiting tariffs on digital transactions. This agreement, renewed every two years approximately, has now expired. WTO head Ngozi Okonjo-Iweala noted that while this is not the first time the moratorium has expired, it takes time for countries to decide on imposing tariffs.
The United States sought a permanent extension this time, a proposal opposed by many developing countries, led by India, due to fears of revenue loss. A potential compromise was in sight for a five-year extension, but Brazil insisted on a maximum of two years, according to the Brazilian Ministry of Foreign Affairs.
