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Info Service on WTO and Trade Issues (Apr26/08) Geneva, 9 Apr (D. Ravi Kanth) — The United States arrived at the World Trade Organization’s 14th Ministerial Conference (MC14) in Yaounde, Cameroon, with a “maximalist” agenda to make the moratorium on customs duties on electronic transmissions permanent. However, after the meeting, the US Trade Representative (USTR), Ambassador Jamieson Greer, has declared that the WTO “isn’t a serious forum.” In a signed article, titled “Another fish story from the WTO – the organization has failed, and the US will chart its own course on trade policy,” published in the Wall Street Journal on 7 April, Ambassador Greer said: “That’s what I was thinking as I sat through the triumphant finale of the four-hour opening session of the 14th Ministerial Conference in Yaounde, Cameroon, on March 26.” He said, “The WTO’s leadership was playing a self-congratulatory song about progress on an incomplete agreement on fisheries subsidies,” adding that he “tried in vain to gauge the reactions of other trade ministers, but comparatively few had even bothered to make the trip.” It is an open secret that trade ministers from several countries failed to attend MC14. At one point, it looked rather unclear whether any meaningful decisions could be taken without their presence, said participants who asked not to be quoted. According to Ambassador Greer, “the US government assessed that only a couple dozen cabinet-level trade ministers attended, with the majority of attendees represented by vice ministers or lower-ranked delegates.” “As WTO staff bopped to the beat, I grew concerned about how productive the next three days would be,” the USTR said. Declaring himself a “skeptic of the WTO,” the USTR said that he “left even more so.” While noting that “the organization was established in 1995 with the aspiration to create certainty for trade based on common market-based rules,” Ambassador Greer said, “it has been on a path to irrelevance for some time and has even undermined US interests.” Several critics and studies have repeatedly pointed out that successive administrations in Washington not only weakened the WTO’s enforcement function by not implementing various rulings but also worked largely to advance their own seemingly high-handed, controversial positions. The USTR said, “The WTO system helped create a world in which China dominates global manufacturing and our trading partners maintain high trade barriers with impunity.” However, he did not elaborate on how the system allegedly enabled China to dominate global manufacturing when a host of industries and corporations in the US and European Union member states moved to set up their facilities in China to take advantage of low wages and the huge market potential that China offered to companies from industrialized nations, as several studies have pointed out. Hitting out at the treaty-based self-designation framework that allows developing countries to avail themselves of special and differential treatment (S&DT), Ambassador Greer argued that “because of their self-declared status as “developing” economies, about three-fourths of members aren’t obligated to follow some of the agreed-on trade rules, and they constantly seek carve-outs from new ones.” Critics, however, point out that the US was also a beneficiary of permanent exceptions, such as the provisions of the Jones Act and farm subsidies, which it negotiated during the Uruguay Round (1986-93) in order to subsidize its wealthy farmers, said several South American countries. In his article, Ambassador Greer maintained that “multilateral negotiations have been lackluster for years,” even though the US managed to secure two major agreements: the moratorium on customs duties on electronic transmissions at the WTO’s second ministerial conference in Geneva in May 1998, and the Trade Facilitation Agreement at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013. Washington also succeeded in putting the Doha work program to bed at the WTO’s tenth ministerial conference in Nairobi, Kenya, in December 2015. These developments made the WTO ineffective, according to several critics as well as developing countries. DISPUTE SETTLEMENT The USTR pointed out that “the WTO dispute-settlement system devolved into a forum for endless litigation, which prevented countries from combating unfair trade practices, rarely led to compliance, and served as a disincentive to settle disagreements.” However, the USTR’s contention runs contrary to the facts: not only did Washington refuse to comply with several rulings, it also paralyzed the WTO’s highest legal arm – the Appellate Body – in December 2019, rendering the dispute settlement system and enforcement function ineffective. Every month at the Dispute Settlement Body (DSB), around 130 countries continue to call on the US to agree to the filling of all seven vacancies on the Appellate Body. For roughly 92 times, Washington has blocked proposals to fill these vacancies. E-COM MORATORIUM In his article, Ambassador Greer said, “the WTO is ineffective and dysfunctional.” He offered one example: “WTO members since 1998 have refrained from imposing tariffs on electronic products – like software and music – that can be transmitted digitally.” He elaborated: “Even though this approach has become the default practice globally, the WTO still goes through a performative renewal of this “e-commerce moratorium” on digital tariffs every two years. Doing so consumes enormous time and energy, and many members hold the renewal hostage to trade away for unrelated objectives.” According to Ambassador Greer, “the US and 24 co-sponsoring countries this year proposed a common-sense reform: Instead of settling for another two-year renewal, members should agree to a permanent e-commerce moratorium.” “That would prevent future ministerial conferences from wasting time on a nonissue while demonstrating that the WTO could have a role in future trade negotiations. But even this proposal – the lowest-hanging fruit – wasn’t picked up,” the USTR said. At a time when developing countries are losing tens of billions of dollars in revenue due to the e-commerce moratorium – a figure highlighted in several studies by UN Trade and Development (UNCTAD) – the “maximalist” position adopted by the US as the centerpiece of its negotiating strategy scuttled any outcome at MC14, several countries said on a background basis. Ambassador Greer argued that “despite broad support, the need for consensus among all WTO member countries prevented passage,” adding that “some insisted on a time-limited extension, and some tried to tie their support to the creation of a multi-million-dollar WTO slush fund for “development”.” Faced with intense opposition from many countries at MC14, the US was compelled to lower its demand from a permanent moratorium to a four-year duration. Nevertheless, the USTR maintained that “the US and other e-commerce moratorium supporters showed significant flexibility, and 164 members agreed to a compromise – extending the moratorium for about four years rather than permanently.” He blamed Brazil and Turkiye, writing that “even this modest outcome wasn’t to be, as delegations from Brazil and Turkey insisted on maintaining the two-year renewal cycle.” “These members’ intransigence halted attempts at much-needed reform,” the USTR said, drawing a link between the e-commerce moratorium and WTO reform. “These matters have been referred for further discussion at the WTO’s headquarters in Geneva in a last-ditch effort to find consensus,” he said, warning that “unless members pull a rabbit out of a hat, the outcome from Yaounde is less certainty on e-commerce and worse prospects for a broader reform agenda.” He asked rhetorically, “why is the WTO like this?” Then he answered his own question: “because all 166 members must agree to adopt new rules, and members hold divergent views on a range of issues, down to the purpose of the organization.” “Under these conditions,” he maintained, “consensus is nearly impossible.” However, decision-making by consensus is a treaty-based right that members must adhere to unless the Marrakesh Agreement is upended once and for all, said several trade envoys, who asked not to be quoted. “It wasn’t always this way,” said Ambassador Greer, noting that the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), originated in 1947 and that its focus “on market-based trade meant that it largely excluded communist states.” It is, however, moot why the US launched the Uruguay Round of trade negotiations along with its then-Quad partners – the European Communities, Canada, and Japan. To recall, the US brought in trade in services, trade-related aspects of intellectual property rights, and a binding dispute settlement system into the Uruguay Round of trade negotiations to fundamentally change the GATT system, according to several studies. Without mentioning the US role in previous rounds of trade negotiations – particularly the Uruguay Round – the USTR said, somewhat audaciously: “regardless of whether one agrees with the outcomes of various negotiating rounds, it’s clear that the leaner GATT system functioned reasonably well.” He added: “The US isn’t going to spend 30 years waiting for the WTO to respond to the needs of American workers and businesses.” Again, without offering any tangible evidence, Ambassador Greer said, “the WTO was of no use during the first “China shock”, which crushed American manufacturing, and it’s no help amid today’s huge trade imbalances.” In short, Washington is seemingly warning WTO members that it is “charting its own course on trade policy – working regionally, bilaterally and, where necessary, unilaterally.” Despite the defeat the Trump administration suffered in its own Supreme Court over its reciprocal tariffs – first announced in April 2025 – the USTR claimed that Washington’s “recent wave of reciprocal trade agreements has been the most successful effort in years to open foreign markets while protecting domestic production and disciplining out-of-control imports.” The reciprocal deals remain only a work in progress at this juncture. The USTR asserted that “the US is driving reform on trade globally, tackling tariffs and non-tariff barriers, addressing structural imbalances in trade, and diversifying and securing supply chains.” He concluded: “The WTO is nowhere to be seen on these issues. Instead, it’s spending time on silly fish songs.” Yet, ironically, the US is seeking a permanent e-commerce moratorium from the very same WTO. That only shows that Washington’s demands are unlikely to gain easy passage in the coming days, said participants familiar with the negotiations. +
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