NZ Defends The WTO Rules-Based System – Except When It Doesn’t
“A group of 66 countries, including New Zealand, has made a total mockery of claims to the high ground as defenders of the WTO’s ‘multilateral rules-based system’ ”, says Dr Jane Kelsey, Professor Emeritus in Law at the University of Auckland, who is attending the 14th World Trade Organisation (WTO) ministerial conference in Yaoundé, Cameroon.
As Professor Kelsey explains, “for several years, supposed sticklers for the WTO rules, who call themselves ‘Friends of the System’, have been complicit in a process dubbed ‘reform by doing’, designed to avoid having to play by the rules of the WTO’s constitution, the Marrakesh Agreement.”
That strategy includes a sub-set of countries negotiating new plurilateral agreements on cherry-picked topics, without a mandate but using WTO resources. The United States (US), European Union (EU) and other, mainly wealthy countries, have made it clear they see this as the future of the WTO. Developing countries have strongly criticised the systemic impacts that will see their priorities marginalised even further.
One such “Joint Statement Initiative” is on electronic commerce. Negotiations on text were concluded in July 2024. To adopt it as a plurilateral agreement in the WTO requires consensus of all 166 members at a Ministerial Conference. The number of participants has dwindled from 91 to 66, so consensus was not going to happen.
Rather than abide by those WTO rules the participants, including New Zealand , announced today that they will go ahead anyway and seek approval through their domestic processes, while continuing to press for its adoption in the WTO.
Adopting a plurilateral agreement outside the WTO, as with the Trans-Pacific Partnership Agreement, would be relatively uncontroversial.
But they are actually passing this off as a WTO instrument. The press release called it the “WTO Agreement on Electronic Commerce”. The text is on WTO letterhead with an incomplete WTO document number. An Annex creates a parallel process for arbitration, cross-referenced to the WTO’s own processes.
“Perhaps most outrageously”, Jane Kelsey says, “it provides for the WTO Director-General to receive notifications of adoption of the agreement by individual WTO Members, which she has no mandate to do”.
Professor Kelsey points to the dangerous precedent this creates: the US talked last week of adopting “interim” plurilateral agreements that do not have consensus support in the WTO.
“In helping to spearhead this first precedent, New Zealand has aligned itself with the US in snubbing its nose at the ‘rules-based’ multilateral trade regime that it purports to champion.”
