EU’s Lange optimistic for MC12 because ‘the U.S. is back’

The chair of the European Parliament’s International Trade Committee believes the World Trade Organization’s 12th ministerial conference, set to begin later this month, has a good chance of success because the U.S. under the Biden administration is again playing a leadership role in the negotiations.
“The United States are back on track and that’s a good signal for the WTO,” Bernd Lange told reporters on Thursday. “No doubt, without the commitment by the United States and also a clear common approach with the European Union, there is no engine for the WTO. That’s for sure.”
Lange this week led a delegation of INTA Committee members to Washington, DC, where they met with U.S. trade officials and lawmakers.“It’s clear in the European interests and I guess in the U.S. interests as well that we need a strong multilateral trade regime where all the countries are in the tent, specifically the big elephant in the room, China,” he said. “We discussed a lot about China here.” “They have to respect the multilateral system as well,” he continued. “They are a member of the WTO and therefore we have to really develop the WTO.”
Another reason for Lange’s optimism, he said, is the approach taken by WTO Director-General Ngozi Okonjo-Iweala, who took the helm of the embattled organization in March. “It’s a member-state driven organization, but she uses power as a secretariat to start processes and try to find compromises -- a really dynamic person,” Lange said. The U.S.’ reclaiming of a leadership position at the WTO alongside the EU, coupled with Okonjo-Iweala’s efforts, “make me a little bit more optimistic than perhaps some months ago,” he said.
The U.S. will head into the MC12 very differently than it did the WTO’s last ministerial, which took place in Buenos Aires in December 2017. At that time, the role the U.S. would play at the ministerial was largely unknown. President Trump regularly railed against the WTO and U.S. Trade Representative Robert Lighthizer, only a few months after taking office, had not given a major WTO-oriented policy speech.
Biden USTR Katherine Tai, however, traveled to Geneva in October and said the U.S. was committed to the WTO, though she said it needed reforms. Lange called Tai’s speech “a signal” that the U.S. is back.
However, not everything has changed. For one, the U.S. still does not have an ambassador to the WTO. President Biden has nominated USTR Deputy General Counsel Maria Pagán for the post and the Senate Finance Committee held her nomination hearing in October, but she has not yet received a Senate vote. (President Trump nominated Dennis Shea to be the U.S. WTO ambassador in July 2017, but the Finance Committee didn’t hold his confirmation hearing until the following January, after MC11. He was confirmed in March 2018.)
The Biden administration also has continued to block appointments to the WTO’s Appellate Body, a practice begun by the Trump administration in the summer of 2017. The Appellate Body is without any members, rendering it unable to hear any appeals.
The WTO writ large, meanwhile, is in a vastly different situation. WTO ministerials typically provide negotiators with a concrete deadline for talks. But members did not strike a multilateral deal in Buenos Aires; the last consensus agreement was reached in 2015, putting more pressure on members for MC12. Many see it as a key bellwether for the WTO’s relevancy.
The negotiations on fisheries subsidies are a microcosm of the WTO relevancy issue, as the talks have lingered well past a “by 2020” deadline set in the United Nations Sustainable Development Goals. But Lange said he was optimistic a deal in Geneva, where MC12 will take place, is in the offing. “We have to be realistic regarding the outcome, but of course I expect we will have a positive outcome on fisheries,” he said. India’s proposed 25-year overfishing exception for developing countries not engaged in distant-water fishing is problematic, Lange acknowledged. Issues involving China also linger, he noted, without getting into specifics. The U.S. has pushed for a forced-labor prohibition in the fisheries text, which China has opposed. The European Parliament has been vocal about its broad concerns over Chinese forced labor and has even held up the ratification of the EU-China Comprehensive Agreement on Investment over those concerns.
Lange believes WTO members will be able to agree on a declaration covering trade in health that could launch negotiations in that area. Members also hope to have “some ideas, reflections on the modernization of the WTO” as well as “some reflection” on transparency for agricultural subsidies, he said.
Lange added that he has heard “some critical voices about modernization coming from India and some other countries, but we want to stabilize the system and need more dynamics in the system.”