Yesterday trade officials from across the globe convened in Buenos Aires to kick off the World Trade Organization (WTO) Conference.
The conference is held every two years and was previously held in Nairobi, Kenya in 2015. Macri opened the conference remarking the “historic event” which creates the larger opportunity to improve upon trade agreements that have not always benefited all members. Recognizing this current era of “profound global transformation,” Macri claimed it is the responsibility of all WTO members to “face 21st century challenges” and convert them into opportunities. The WTO recently highlighted that global trade of goods will have grown 3.6 percent from 2016 and that its members introduced fewer measures to restrict trade since the year prior.
What remains to be seen is what type of leadership, if any, the US will provide at this year’s conference. US Trade Representative Chief Robert Lighthizer has remained largely critical of the meetings, stating that he would use the opportunity to “advocate for US economic trade and interests, including WTO institutional reform” and will leave the meetings a day early. On Monday, Lighthizer spoke at the meetings criticizing that the WTO is “losing focus” and that it was “impossible” to negotiate WTO rules when the current rules are not being followed.
The Trump administration has made it known its anti-globalist policies after it threw away its opportunity earlier this year in the Trans-Pacific Partnership, its tough-talk negotiations with NAFTA, and its hard stance on “America First.” In addition, the Trump administration has blocked the appointment of new judges to sit on the WTO’s seven-member appellate body which assists in resolving transnational trade disputes. Macri countered these sentiments by remarking that the problems of the WTO “can only be resolved with more WTO not less WTO” and those who pursue “primacy of national interest” do not contribute in the overall improvement of the entity.
Perhaps in response to these doubts, WTO Director General Roberto Azevêdo expressed his confidence in this year’s event stating: “We are all the WTO. All 164 members. We all have an equal stake in the system, and an equal interest in ensuring that it can continue to serve the people of our countries, our communities, and the wider world. Therefore, I think we all have a responsibility to preserve and champion the system. And we have a great chance to do this, right here, right now.” To be clear, there is wide agreement that changes must be made to the institution and how its partner countries relate to one another. The WTO has recently set the bar low for its goals and objectives in order to prove it is succeeding little by little as some of its more ambitious goals to create trade agreements among countries with different-sized economies (and cultures and incomes) have failed.
Last week, however, there was speculation of some good news, regarding Mercosur-EU relations and a possible “political agreement” to be made during this week’s WTO Conference. Several current and former Macri administration officials have opined their confidence in the meetings this week. Former Foreign Minister and WTO Conference President, Susana Malcorra, added fuel to the fire stating “there’s interest to use the WTO platform to announce the decision.” Minister of Production Francisco Cabrera commented that the negotiations with the EU are “going well” and hopes to finish off an agreement this year, though he recognized the complexities involved with the continued negotiations and the different approaches each partner country has.
The most important parts of the negotiations include pushes for duty-free exports to the EU of beef and ethanol for 700,000 tons and 600,000 tons respectively. Previously, in 2004, the EU offered duty-free on 100,000-ton supplies of beef, however EU negotiators claim that EU citizens no longer consume as much meat. One recent setback occurred this March when it was revealed that the Brazilian meatpacking industry illegally sold expired meat products and forged sanitary permits.
EU Trade Commissioner Cecilia Malmstrom also stated that they were close to an agreement, and are committed to doing so “as soon as possible.” In addition, an anonymous Mercosur official was confident that there’s “more than a 70 percent chance” that the two blocs will reach an agreement to be officially signed in mid-2018 prior to important political elections within the EU. The timing is critical for these decisions as political movements throughout the globe have been pushing back (and forth) about free trade.
The WTO conference’s location is also indeed important to recognize as part of the Mercosur-EU negotiations. Argentina has widely been praised as stepping into the international limelight and it would be another win for the Macri administration to secure an agreement after 20 years of hard-fought negotiations. Both the Argentine government and Argentine businesses alike look to this week to lay down framework to relaunch Argentina on the map. Daniel Funes de Roja, President of the Food Product Industries (COPAL), stated that the WTO Conference and the G-20 create both challenges and opportunities. “A challenge, because of the current volatile international context which requires restraint and balance. An opportunity, because Argentina can be seen in a new light.” Normalized, specific guidelines on trade, and by extension, investment, allows Argentina’s economy to have a baseline to stabilize itself and build from there.
As Macri hits his two-year mark in his presidency, confidence in his political outlook remains positive, shown through his surprising success during his mid-term elections. In addition, according to research done by Management & Fit for Clarin, Macri was shown to have increased optimism in Macri’s ability to solve problems, as well as the general political situation. With big wins like a possible Mercosur-EU agreement, Macri’s approval may continue to soar, allowing him to continue his political and economic measures for Argentina’s future.