The next ministerial conference of the World Trade Organization, scheduled for June in Nur-Sultan, Kazakhstan, may be the last chance for the WTO to reclaim its central role in the multilateral trading system. With all too few successes in the 21st century about which to boast, WTO members must prove anew there that they can negotiate new rules and put them into effect. To improve their prospects for success in Kazakhstan, they must agree now on the issues most likely to have chances to generate consensus by June and pursue negotiations on those issues immediately.
In the countdown to Kazakhstan, five issues seem most ripe for negotiating success. Those issues, as I argue in a new paper titled “Reviving the WTO: Five Priorities for Liberalization“released today by the Cato Institute, are free trade in medical goods, free trade in environmental goods, new disciplines on fisheries subsidies, investment facilitation, and digital trade. These should be considered the five first pieces of WTO reform.
First, the COVID-19 pandemic has made clear the interdependence of countries for medicines and medical supplies, revealing the wisdom of a free trade agreement in medical goods. Even before the pandemic struck, the average bound tariff on medical products for all WTO members was 26 percent, with some tariffs as high as 65 percent. The intense pressures of the pandemic resulted in the imposition of new trade restrictions; at least 75 national governments imposed restricted on exports of medicines and medical supplies.
A new WTO agreement should aim to eliminate all tariffs on imports and all export restrictions on drugs and other medical goods. In addition, WTO members should agree to promote transparency in all national measures taken to fight the virus; end price-inflating “buy local” requirements for medical goods; eliminate unnecessary regulatory and administrative barriers that hinder medical trade; and adopt international standards to help ensure the safety and quality of imported medical goods.
Second, after nearly two decades of negotiations, WTO members must finally reach an agreement to end tariffs on environmental goods. This would free up trade in a sector that accounts for about $1 trillion in global trade annually and encourage the proliferation of climate-friendly and other new technologies worldwide.
The main hold-up here has been the inability of the negotiating countries to agree on a list of “environmental goods.” Some interest groups have proffered proposed lists that contained virtually everything, including (literally) the kitchen sink. China, the European Union, and the United States have squabbled over whether bicycles are environmental goods.
There is time between now and June to resolve these disputes and agree on a final list. There is need also to make certain that this final list will be a “living” list to which new environmental goods can be added as they are invented in the years to come.
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