Al-Ahram Hebdo: As the WTO celebrates its 30th anniversary, is the global trade order, which the organization essentially represents, unable to function or practically at a standstill?

Ahmed Maghawry: The inaction of the WTO has multiple causes. But that does not necessarily mean the organization has lost its relevance. In this context, it is important to understand the role of the WTO. The organization is often confused with the broader multilateral trading order. We must recognize that the WTO is only part of it. The multilateral trading order encompasses a wide range of agreements and economic blocs, such as regional and bilateral agreements, free zones, and customs unions like COMESA, the African Continental Free Trade Area (AfCFTA), and the European Partnership. All of these agreements, along with the WTO, constitute the multilateral trading order.

The WTO plays a central role in this complex system. It provides the legal framework and firm rules that govern international trade. These rules are followed by the majority of its 166 member countries.
Despite the challenges it faces, the organization still plays an essential role in the global economy. Since its creation in 1995, replacing GATT, it has been tasked with managing a wide range of trade agreements, including those related to agriculture, industries, and services, and agreements on textiles and trade-related investment measures.
The trade-related aspects of intellectual property rights and the service sector, in general, are key pillars of the contemporary global economy. This vital sector is growing rapidly, making it a key driver of economic development.

AH: Despite the continued growth of the services sector, its regulation remains a major concern. But who is responsible for regulating this vast and complex sector?
AM: The answer lies in the fact that global trade in services is highly professional. This raises questions about the mechanisms for regulating and managing this trade. In this context, it is important to mention Abdel-Hamid Mamdouh, who played a leading role in drafting agreements related to the services sector. This highlights the central role of experts in this field.

AH: Why is this organization so important? And why is it said to be struggling?
AM: The answer lies in its main functions, which are to negotiate trade agreements, monitor the implementation of these agreements, and resolve trade disputes that may arise between member states. These functions make the WTO a cornerstone of the global trade order.
Its role is to negotiate new data, provisions, rules, and agreements. Take, for example, the fisheries agreement. Part of this agreement was concluded during the tenure of previous ministerial cabinets, but the other part is still under negotiation. However, many countries have submitted their instruments of ratification to the concerned organization, meaning the agreement is about to come into force.
In Egypt, the necessary procedures for ratifying this agreement have not yet been taken. However, many member states have completed the ratification process, demonstrating that the negotiation process continues despite certain challenges.
While new agreements have been reached, other negotiation areas remain stalled. For instance, negotiations on the agriculture agreement have been ongoing for over 25 years and have made little progress. Additionally, negotiations on services are facing some obstacles, but it is only a partial deadlock.

AH: What will be the impact of this agreement on trade if it is approved?

AM: The agriculture agreement is one of the most important agreements in the WTO. Its impact on agricultural trade is significant, and thus, the stalemate in negotiations on this issue represents a major challenge for the organization.
I believe that concluding this agreement would reinvigorate the WTO, which has been facing a functional deadlock for some time. However, another concerning aspect is the disappointment of developing countries in not achieving the development goals they had hoped for through this organization.

The lack of a clear definition of development at the WTO is a major obstacle. The Marrakesh Agreement establishing the WTO indeed speaks of improving living standards and increasing the share of developing countries in trade, but it lacks clear mechanisms to achieve these objectives. When the WTO sought to address the issue of country classification, it relied on a simple division into developed, developing, and least developed countries. However, this classification, although simplified, did not meet the needs of developing countries, particularly regarding the issue of redefining development based on their situation.
Development is not just a classification but a dynamic process that requires constant redefinition. At a certain point in history, the idea of dividing countries into these categories became fixed, failing to take into account the changes and evolutions occurring in developing countries.

South Korea struggled to emerge from a difficult economic situation, while China had not yet joined the WTO. Today, after achieving significant economic growth, South Korea is unilaterally seeking to transition from the status of a developing country to that of a developed country.

In 2001, China joined the WTO, marking a decisive and radical turning point in the global trade order. The emergence of a powerful economic force like China as a fundamental player in global trade and investment completely reshaped the landscape of trade and industry, including global supply chains. With advances in modern technologies such as the internet and artificial intelligence, these landscapes have continued to evolve at an increasingly rapid pace. Climate change has also added a new dimension, pushing countries to take unilateral measures to protect their environment. As a result, the WTO has become unable to adapt to a changing world with its rigid system, which is now 30 years old.

AH: How can reform be introduced? 
AM: This is an important question that requires laborious work. In this matter, as the WTO, our current goal is to move negotiations forward. The core problem lies in the WTO’s inability to develop a new concept of development. This concept needs to be comprehensive and take into account the differences between states. Additionally, it must be flexible enough to meet the needs of each state.
The current system is based on the concept of "special preferential treatment," which aims to assist developing countries. But the problem is that the global economic map has significantly changed. There are developing countries like Costa Rica and Brazil that have substantial competitive capabilities in the global economy. Surprisingly, these countries are very rigid in WTO negotiations compared to many developed states. This proves that the current order does not accurately reflect the economic realities at play.

The classification of states as either developed or developing limits the organization’s flexibility. It is not logical for developed states to receive the same privileges as developing countries. The notions of developed and developing countries need to be redefined based on a new philosophy or approach that aligns with each country’s capabilities. This is difficult and complex.

AH: If this change is implemented, how will developing countries benefit?
AM: This concept will face many challenges in negotiations due to the constraints imposed on the WTO. Approval must be unanimous among all member states, and the refusal of just one can derail the entire project. If we accept the concept of a new distribution, we will need to move beyond the traditional classification of developed and developing countries. The WTO is seeking a new developmental agenda. However, the lack of common ground between developed and developing countries makes it difficult to form a unified agenda.

The WTO has been successful because it has focused on specific issues, such as agricultural trade, intellectual property rights protection, investment, services, and anti-dumping measures. Today, developed countries are proposing new issues, such as the relationship between trade and human rights, peace, sustainability, and the environment. These issues are important, but their aspects are not well defined, putting developing countries in a difficult position. As a result, negotiators find themselves drawn into vague negotiations.

AH: How can the WTO benefit Egypt?
AM:  Egypt joined the WTO in 2015. To illustrate the importance of this organization, let's take a quick example: even if the negotiation mechanism within the organization faces some challenges, the mere existence of an agreed-upon system represents significant value for a developing country like Egypt. But what are the other benefits that Egypt can gain? Assuming there are about 30 international agreements, and each agreement contains an average of 30 articles, then Egypt is bound by approximately 900 articles within the framework of the WTO. We can estimate that half of these articles represent rights for Egypt, and the other half represent obligations on it. This system provides a clear framework for international trade relations.

If Egypt can take advantage of its rights within the WTO and also avoid violations that may arise from non-compliance with these obligations, it will help it avoid conflicts that may arise between its legislation, procedures, and international obligations. Consequently, it will be easier for Egypt to formulate a foreign trade policy that is consistent with WTO rules. By understanding its rights and obligations, Egypt can develop an effective foreign trade policy, enabling it to increase its exports, target new markets, and better identify its strengths and weaknesses. We hope that the new ministry will be able to meet these challenges.

* This story was published in Al-Ahram Hebdo (in French) on Wednesday 18 september.