ABU DHABI – The World Trade Organisation (WTO) agreed to extend a moratorium on e-commerce tariffs for two years after marathon negotiations in Abu Dhabi, but failed to secure deals on other contentious trade issues, including a crackdown on agriculture and fisheries subsidies.

Speaking at the closing session on March 1, director-general Ngozi Okonjo-Iweala called the WTO a “source of resilience” in a world shaken by geopolitical turmoil. She encouraged negotiators to continue discussions on their unfinished business.

Adding to the challenges at the 13th biennial ministerial conference of the Geneva-based institution are dozens of elections in 2024 in major economies, as incumbent politicians from Brussels to New Delhi feel pressure from farmers, truckers and other workers protesting for relief from inflation and foreign competition. 

At the start of the week, “I said trying to get achievement gains in these headwinds would be tough”, said Dr Okonjo-Iweala, whose term ends in August 2025, during a press conference. “We didn’t achieve all we wanted to, but what we did achieve, I think, was pretty amazing.”

Trade and Industry Minister Gan Kim Yong represented Singapore at the conference and chaired the inaugural Ministerial Conversation on Trade and Sustainable Development. Reiterating Singapore’s strong support for the rules-based multilateral trading system, he said: “Members need to continue to work together to exercise collective leadership and set a forward-looking agenda for the WTO, to ensure that it remains relevant and fit for purpose.

“The work at the WTO does not end here at (this conference), and we must press on to ensure that the WTO continues to deliver meaningful outcomes for all.”

The United States Chamber of Commerce, the country’s largest business lobbying group, applauded the extension, saying in a statement that “the global economy benefits when digital trade stays duty-free”.

As the talks ended past midnight after running for 16 hours on March 1, the last-minute pact to preserve the e-commerce moratorium until March 31, 2026, or the next WTO ministerial conference, was the most important breakthrough. 

Other than the moratorium, members agreed to hasten discussions on the restoration of a fully and well-functioning dispute settlement system by 2024, which is critical for the functioning of the WTO, said Singapore’s Ministry of Trade and Industry.

The members also agreed to review special and differential treatment provisions for developing and least-developed country members, and a set of transition support measures for these members.

New disciplines that would facilitate the services trade by streamlining and simplifying regulatory procedures came into effect during the conference, where Comoros and Timor-Leste were welcomed to the WTO.

It surprised some observers who heard European Union officials say just minutes before a draft agreement was announced that the week-long negotiations were headed for total failure.

Still, falling short on agriculture and fisheries may renew criticism that the nearly 30-year-old WTO – with just two major multilateral accords to its credit – is incapable of brokering the required consensus among its 166 members as the global economy fragments into rival blocs, and wars in Ukraine and Gaza disrupt international trade.

Mr Valdis Dombrovskis, the European Commission’s vice-president for trade, said: “It’s clear that it is often difficult to reach consensus. Despite that, we were very close and there’s a willingness and determination of a vast majority of membership to continue negotiations until it gets over the line.”

India, Indonesia and South Africa had signalled their opposition to renewing the e-commerce moratorium, but supported it in the end. They are among countries worried about losing control of data flows, as well as the market dominance of US Big Tech companies.

About 25 per cent of all global trade is now conducted digitally, and it is expected to continue to rise faster than traditional trade in goods over the next decade.

The problem the WTO faces is how to deal with some governments wanting the authority to collect customs duties from growing sectors of online commerce that are hard to track and measure across borders. 

Among the questions raised in the e-commerce deal is whether this will be the last two-year extension, which Dr Okonjo-Iweala tried to address.

“We agreed to extend with a date for the moratorium to end at the end of that time, but this gives enough time, enough notice, so that business can have the time to adjust,” she said.

Business groups have warned that allowing the moratorium to lapse would cause widespread uncertainty and raise costs. 

Ms Tiffany Smith, vice-president of global trade policy at the National Foreign Trade Council in Washington, said: “It’s a relief to see the moratorium survive by the skin of its teeth. Its collapse would be a significant blow to the rules-based trading system.”

Negotiations went beyond their scheduled end on the night of Feb 29 as India found itself at the centre of the most contentious discussions. Delegates said the world’s most populous nation was blocking a deal on the e-commerce moratorium unless it received one of its main goals – concessions on subsidies for its farmers to meet their domestic food security needs.

Coming into the talks, India said its top priority was a revival of the WTO’s seven-person appellate body, which the US disabled in late 2019 by blocking appointments to empty seats. There was no progress this week towards fixing it, though the members confirmed their goal to find a solution by the end of the year to address that part of their crippled dispute-resolution system. Indian trade minister Piyush Goyal told reporters this week: “We feel sad that some countries are still obstructing significant outcomes which could have helped less developed and developing countries gain confidence in the working of the WTO. We feel sorry that the agenda of some large corporations prevails over public good.” 

In its statement, the US Chamber said trade rules “aren’t worth the paper they’re written on if they can’t be enforced”. It urged work on reforming the dispute settlement system to be made a priority. BLOOMBERG