Shaping tomorrow's trade at the 13th Ministerial Conference (MC13)

Recent engagements in Geneva, where ICC Secretary General John Denton and ICC Head of Trade Valerie Picard convened with key stakeholders including WTO Director-General Ngozi Okonjo-Iweala and prominent ambassadors, underscore the urgency and significance of preparations for MC13. With representatives from Australia, China, India, and the United States among others, the discussions resonated with a resounding message: the preservation of the WTO E-Commerce Moratorium is imperative, and MC13 must yield substantive outcomes to fortify the multilateral trading framework.

Amidst escalating trade protectionism and geopolitical tensions, the WTO stands as a beacon of cooperation and stability, nearly three decades since its inception. Yet, the challenges confronting global commerce demand bold action. From revitalizing the WTO's foundational principles to spearheading reforms across its organizational pillars, there is a collective imperative to usher in an era of inclusive, resilient trade relations.

This paper delineates five paramount areas identified by the global business community, derived from exhaustive consultations facilitated by the International Chamber of Commerce. With insights garnered from diverse industries and regions, these priorities encapsulate the collective aspirations for a more dynamic and equitable global trading landscape.

1.  Put market access back on the agenda.

Since the Covid-19 pandemic, trade restrictions, including subsidies, export controls and investment restrictions, have been proliferating on grounds of national security, resilience, domestic competitiveness and environmental concerns. On average, there were 4,409  new trade restrictions on goods, investments, and services per year between 2020-2023 , compared to an average of 2,845 new trade restrictions in the 2009-2019 period, representing an increase of 55%. As a result, trade is becoming more complex and costly for businesses. [1] Economic studies and history are unequivocal on the negative impacts of protectionism, and the WTO was designed to counter such measures. As stated in the preamble to the Marrakesh Agreement, “reciprocal and mutually advantageous arrangements”, reduction of tariffs and other barriers to trade, and the elimination of discriminatory treatment in trade relations, are the path to jobs and economic development. It is crucial that governments put market access back on the agenda – for companies, diversifying export markets is not a luxury, it is a matter of resiliency. We are therefore calling on all WTO members to reaffirm their commitment to the foundational principles of the WTO as laid out in the Marrakesh Agreement and in existing WTO agreements, including the Subsidies and Countervailing Measures Agreement. Consistent with these principles, WTO Members must uphold and build on existing trade rules and not weaken or retreat from longstanding commitments under current WTO agreements.  As an immediate step in advancing  open and transparent trade, we strongly encourage WTO members to quickly integrate the Investment Facilitation Agreement for Development into WTO architecture.

2.   Agree on a holistic vision for WTO reform.

The global business community places great importance on the WTO and the broader multilateral trading system. However, as is widely recognised, the WTO is in urgent need of reform. And its rules must be updated to ensure it continues to serve the needs of businesses—the ultimate end-users of the global trading system. Whilst WTO Members have been engaged in active discussions on various parts of reform, notably dispute settlement, reform efforts are not being approached holistically. But any chronic imbalance between the organisation’s three functions cannot be sustained — failings in one inevitably weaken the others. Any effort to reform the WTO must address all policy, legal, and architectural issues comprehensively. ICC has proposed a framework that sets out a holistic vision for reform of the WTO from the perspective of the global business community and maps out a comprehensive approach to reform across the three vital functions of the organisation, which would also include establishing a formal mechanism for private sector engagement in the work of the WTO at a technical level.  While we welcome the WTO Director-General’s Business Advisory Group launched as part of a broader effort to engage stakeholders, the WTO must institute a permanent structural change to ensure business and other stakeholder voices are heard when shaping a long-lasting future for the multilateral trading system. We urge WTO members to align behind a holistic vision for reform covering all three pillars of the organisation – negotiations, dispute settlement and monitoring – and agree on a tangible work programme for reform. 

3.  Allow digital trade to thrive.

The Moratorium on customs duties on electronic transmissions has enabled digital trade to flourish since 1998, preventing the imposition of burdensome tariffs and non-tariff barriers. It is high time for a permanent prohibition on customs duties on electronic transmissions. Building on this critical and fundamental safeguard, the  global business community welcomes the substantive progress made by the WTO E-commerce Joint Statement Initiative on E-Commerce and for having reached consensus on several disciplines relating to digital trade facilitation. The task now is to integrate those disciplines into WTO architecture and accelerate progress and ensure a high standard outcome on other key provisions, including cross-border data flows and localisation. It is also imperative that the provisions apply to all sectors, including financial services. Common rules to ensure open, non-discriminatory access to digital and digitally enabled markets are the key to a successful future e-commerce agreement, as is increased market access in terms of increasing participation in and compliance with the Information Technology Agreement (ITA) I & II and launch of ITA III negotiations to help promote connectivity and bridge the digital divide.

4. Establish a formal roadmap to address specific issues on trade and environmental sustainability.  

Concerted and urgent action is needed to put the world back on a trajectory to limit global temperature increases to 1.5° Celsius but this will not happen through unilateral measures: coordination between governments to address barriers to the deployment of climate solutions and enhance the viability of investments in a net-zero future is critical. But instead, business is facing a cacophony of environmental rules, regulations and standards. In the case of carbon border adjustment measures business, we are witnessing the creation of multiple schemes in different jurisdictions, leading to administrative complexity, regulatory fragmentation and political tensions. ICC urges WTO members to establish a roadmap that would cover the entire range of environmental issues, which would serve as the basis for a work programme aimed at developing new or adapting the current rules and disciplines on trade and environmental sustainability, including addressing barriers to the circular economy. As part of this roadmap, it is critical that WTO Members discuss the trade related aspects of carbon border adjustment mechanisms and consider methods to develop a multilateral approach that meets climate goals without violating trade rules. And it is equally critical that WTO Members initiate without delay negotiations on environmental goods and services with a view to achieving ambitious outcomes by the end of 2024.

5. Accelerate full implementation of the Trade Facilitation Agreement.

The WTO Trade Facilitation Agreement (TFA) removes barriers which make it harder for businesses of all sizes to trade internationally but hurt small and medium-sized enterprises the most. By ratifying the agreement, countries committed to reducing red tape at borders – ranging from measures to ensure quicker release and clearance of goods to enhancing better cooperation between border agencies. The benefits of the agreement are indisputable – according to the WTO, in the first two years alone following its entry into force in 2017, international trade increased by US$ 231 billion. Yet too many countries still rely on outdated manual and inefficient procedures and require the assistance to implement the agreement in full. The COVID-19 pandemic demonstrated that efficient, modern and digital border processes are an essential tool of supply chain resilience. ICC calls on all governments to prioritise implementation of the TFA and to provide all necessary support to developing countries through initiatives such as the Global Alliance for Trade Facilitation so that goods can cross borders without unnecessary delays or additional costs.

[1] Global dynamics (globaltradealert.org)