Low hopes, sharp divides: WTO conference points to continuity outcome

Trade ministers from 166 economies will meet in Yaoundé, Cameroon, from March 26 to 29 for the World Trade Organization’s 14th Ministerial Conference (MC14), its top forum for setting priorities and negotiating global trade rules.

 

Expectations this time are low for an institution that governs 98 per cent of global trade, worth over $35 trillion, due to a deep divide over its direction. One group — led by India, South Africa and Brazil —wants to preserve consensus, inclusiveness, and a balance between development and trade. The other, led by advanced economies, is pushing for faster decisions and smaller group deals, often at the cost of WTO’s core principles. The former warns this shift could weaken the WTO’s multilateral foundations and sideline development concerns — effectively “kicking away the ladder” that once helped rich economies industrialise. This divide underpins most disagreements in WTO talks.

 

Here are six defining issues at MC14 — and what they are likely to deliver.

 

Agriculture: It remains central to India’s WTO agenda, with its key demand that public stockholding for food security be treated as WTO-compliant. The major problem lies in the WTO’s flawed subsidy formula, which uses 1986-88 reference prices and inflates India’s support estimates by seven to eight times, pushing it artificially close to breaching limits.

 

The United States (US) and the European Union (EU) are not interested in correcting the formula and oppose broad exemptions, citing trade distortion risks, leaving India with only a temporary “peace clause” since 2013. With some countries seeking to reopen past commitments and positions sharply divided, prospects for a breakthrough at MC14 are slim.

 

The ecommerce moratorium: First agreed in 1998, it bans Customs duties on electronic transmissions, such as downloads and digital content. Developed countries, led by the US, want to make it permanent, locking in duty-free digital trade as the global economy shifts towards data and services. With the digital economy projected to grow from about $16 trillion today to nearly $50 trillion in the next two decades, driven by artificial intelligence, this Custom duty-fee free regime for electronic transmission largely benefits US technology firms that dominate cross-border digital trade.

 

India and other developing countries argue that the moratorium erodes their future tax base as trade shifts from physical goods to digital formats. They also contest its scope. Most developing countries believe digitally delivered services remain outside the moratorium, while the US and its allies seek to include them.

 

The likely outcome at MC14 is another temporary extension, preserving the uneasy compromise.

 

Plurilateral agreements: They are emerging as a systemic challenge to the WTO. India opposes them, arguing that they undermine consensus-based rulemaking by allowing a subset of countries to negotiate deals that are later brought into the WTO. This lets advanced economies push their priorities while sidestepping issues critical to developing countries, such as farm subsidies and special and differential treatment, risking a two-tier system dominated by a few.

 

At MC14, India faces pressure not to oppose the Investment Facilitation for Development (IFD) pact, which could set a precedent for adoption of more plurilateral deals. Having blocked it with South Africa at MC13, India may now stand alone as South Africa’s position appears to be shifting, under pressure from other African countries linked to China’s Belt and Road Initiative.

 

Special and differential treatment or SDT: The debate over SDT highlights a deeper fault line in the WTO. In 1995, developing countries accepted stricter rules on intellectual property and services in return for flexibilities such as longer transition periods and policy space. That bargain is now under strain. The US and the EU argue that large emerging economies should no longer receive such benefits and want SDT limited mainly to least-developed countries. India counters that development gaps remain wide and removing SDT without revisiting the original bargain would make the system more unequal. The dispute goes to the heart of fairness and legitimacy, with no resolution likely at MC14.

 

The WTO’s dispute settlement system: Once its strongest pillar, it remains weakened. The Appellate Body has been non-functional since December 2019 after the US blocked new appointments. While panels continue to issue rulings, appeals “into the void” prevent final decisions, undermining enforceability. Interim arrangements exist but are partial and fragmented. India supports restoring a fully functional two-tier system, but the broader disagreement over reforms remains unresolved. MC14 is unlikely to change that.

 

Reform of WTO decision-making: This is equally divisive. Developed countries argue that the consensus principle slows progress and advocate more flexible approaches, including greater reliance on plurilaterals. India and others see consensus as the foundation of the system, ensuring that all members — large and small — have an equal voice. Diluting it would shift power towards major economies and weaken the development dimension of the WTO. Here, too, discussions will continue without resolution.

 

Continuity — not breakthrough — is the most likely outcome at MC14: Extensions, more talks, and few decisions. For India, the challenge will be to protect policy space and build effective coalitions in an increasingly divided system.

The author is the founder of GTRI