GENEVA (Sputnik) — Susana Malcorra, the minister and chair of the 11th WTO Ministerial Conference (MC11), which is set to take place on December 10-13 in Buenos Aires, has commented to Sputnik on the uncertainty of the post-Brexit arrangements between London and Brussels.
"It’s a very interesting contradiction: one could envision that the WTO is going through a crisis, but at the same time, some of the most challenging issues that the world is facing, such as Brexit and the situation between the EU and the UK, are eventually impossible to work on without the WTO," Macorra said, adding that this controversy proved the necessity of a "rules-based" international trade system that would meet the interests of all the parties.
Malcorra stressed that the upcoming conference would not be a venue for discussing their relations after the "divorce."
"MC11 will not be the venue to discuss or to address the issue of Brexit and how the EU and the UK resolve their differences in that situation. … Regarding whether WTO could be the safety net after the 'divorce,' eventually, I guess, the rules that have been agreed by all members in the WTO context could be the reference to leave the relations open when the Brexit finalizes," Malcorra said.
Global Trade in Turmoil
Susana Malcorra has also touched upon the recent turmoil in global trade and collapsing trade deals.
"In general, it is important that while regional and sub-regional agreements are facing challenges, that puts more opportunity and more responsibility on the multilateral setting of the WTO. So, what I think is that while there are challenges that we can actually consider as opportunities for improvement, one cannot deny the existence and the importance of a good fair trade system," Malcorra said.
According to her, ensuring a continued and improved global trade framework will be among the chief topics to be addressed by WTO trade ministers and other officials at MC11.
"That is going to be the theme in Buenos Aires. Yes, there is probably some room for improvement, but let’s not talk about differences in the world's trade system, because that system is what has brought us to where we are in the world that would otherwise be a jungle," she said, adding that there have also been some upsides, such as the talks between the European Union and Latin America's trade bloc Mercosur on an interregional trade agreement.
The WTO is experiencing difficulties since the administration of US President Donald Trump has been blocking the appointment of judges at the WTO Appellate Body, explained by Washington by the fact that the WTO rejected the US' appeals on members of the dispute settlement body. According to EU Trade Commissioner Cecilia Malmstrom, this US action is "killing the WTO from inside."
"I do recognize the fact that there is an issue around the appellate body and the problem of that is, it is something that affects the dynamic in the WTO, so I’m sure the ministers will find a way to discuss this on the sidelines," Malcorra said, stressing that the issue will not be on the formal agenda of the conference.
Trump's decision has sparked concerns about the future of the world trading system, with the function of the world's most important trade dispute resolution body uncertain. The WTO director general, Roberto Azevedo, has called for a quick resolution of the issue, stressing that the US decision was already impacting the WTO's work. Appointments to the Appellate Body have to be agreed to by all 164 WTO member states, and states are reluctant to switch to the alternative procedure of majority voting.
The US move followed the country's previous pullout from the Trans-Pacific Partnership (TPP) in early 2017 after the renegotiation of the North American Free Trade Agreement (NAFTA).
The US-EU Transatlantic Trade and Investment Partnership (TTIP) is also in limbo after US President Donald Trump hailed a shift to bilateral trade deals from regional blocs. Since then, the remaining 11 TPP members tried to recover from the blow of US withdrawal and discussed pushing ahead with a revamped post-US deal at November's APEC Asia-Pacific Economic Cooperation summit in Da Nang, but a new deal has so far not taken shape.
During his election campaign, Trump repeatedly criticized the WTO for ruling against the United States in trade disputes and called it a "disaster" that needs to be either renegotiated or abandoned by the United States. The US president has generally been highly critical of multilateral trade blocs and stated his preference for bilateral deals.