Published :
Updated :
For all latest news, follow The Financial Express Google News channel.
The multilateral trading system, under the framework of the World Trade Organization (WTO), has been facing a set of complex challenges in producing an optimal outcome over the last couple of years. Prolonged negotiations on various trade issues without any outcome have already disappointed many of the WTO members. The situation has now worsened due to the tariff war launched by United States (US) President Donald Trump in the beginning of the year. Trump's declared assault against the rule-based multilateralism has already made many wary of the future of the WTO. Nevertheless, there is also a move to keep the WTO functional through some reforms. One of the possible reforms is advancing the plurilateral trade negotiations.
As mentioned in this column last week, plurilateral negotiation is a system where like-minded countries join together to discuss, cooperate, and advance in areas of their common interests not yet addressed by the WTO. So, under a plurilateral agreement, only participating countries are subject to a new set of disciplines, and those unwilling to consider new disciplines in a trade policy area can stay out.
At present, almost all the members of the WTO are parties to at least one of 16 plurilateral agreements, which are under various stages of negotiations. Only 12 members of the WTO are not a party to any plurilateral talks. Among them, four are from South Asia (Bangladesh, India, Nepal, and Sri Lanka), which is interesting. Some may interpret this as the so-called common position of South Asia in the WTO, which was once considered relatively high but lacked a clear commitment. Instead, under the guise of the South Asian common position, it often becomes India's stance in multilateral trade negotiations, supported by some other countries in the region.
Six years ago, this scribe was in Geneva to attend a week-long programme at the WTO. At that time, he had the opportunity to meet the then-Bangladesh Ambassador and Permanent Representative in Geneva. This scribe asked him whether Bangladesh should get involved in the plurilateral negotiations on e-commerce and other related issues, and what the country's actual position is in this regard. The reply, in written form, was that getting involved in any plurilateral talk depended on how much Bangladesh is aware of the challenges it faces and would face in future on a number of fronts. "Based on that appreciation, it will be necessary to take positions that need to be articulated, defended with appropriate statistical and other basis," he added. "Once that happens, it would be the question of whether to take part in the plurilaterals. For sure, when that moment comes, there will be more to deal with as others who are taking part, would have progressed."
The essence of the diplomat's answer is that the country is not well prepared to join any plurilateral talks. Six years later, it appears that the official position of Bangladesh is almost the same as reflected in the General Council of the WTO on February 17-18, 2025. A key agenda of the meeting was the inclusion of e-commerce and investment facilitation as plurilateral agreements in the WTO rule book. Around three-quarters of the members of the WTO have negotiated an investment facilitation deal, while around half of the members have joined the e-commerce agreement. Only a few countries, however, opposed the inclusion of these two agreements in Annexe 4 of the WTO agreement. These countries were Bangladesh, Brazil, Indonesia, Pakistan and Turkey.
Brazil and Turkey did not technically object to the inclusion of the e-commerce deal in the WTO rule book but expressed their inability to support the latest version of the text. Bangladesh, Indonesia, and Pakistan clearly objected to the inclusion of the e-commerce plurilateral agreement in Annex 4. In the meeting, Bangladesh said that it was not ready to support using Annex 4 for the e-commerce initiative because it had not properly studied the impact. To become a part of the WTO framework, any plurilateral agreement has to be included in Annex 4 of the WTO agreement, which is officially titled the Marrakesh Agreement Establishing the World Trade Organization. For this, it is necessary to get approval of all the members of the WTO or at least not opposed by any member, as every member has a veto power. If a single member applies the veto or raises an objection to the inclusion of any deal or any move, it cannot be included.
Indonesia and Pakistan did not oppose the inclusion of the investment facilitation agreement under Annex 4. Pakistan, like Bangladesh, however, added that it was not ready to support using Annex 4 for the e-commerce agreement because it needed to know more about how the provisions for reviewing the moratorium would relate to the separate extendable WTO-wide moratorium. (www.tradebetablog.wordpress.com, February 24, 2025)
It isn't easy to understand why Bangladesh took an open position against including the e-commerce plurilateral deal in the WTO framework instead of remaining silent. As the country does not join any plurilateral initiative, no such agreement will be binding for Bangladesh. Moreover, by arguing that it had 'not properly studied the impact' of the e-commerce plurilateral agreement, the country also exposed its weakness in following the many critical developments in international trade. By joining the plurilateral talks, it is possible to meticulously follow the developments centring the same and get a clear idea of what other countries think about the system.
As Bangladesh is set to strip off the Least Developed Country (LDC) category by the end of 2026, the country has to deal with several complex and new issues after the graduation. To deal with those issues, hectic preparation is necessary, and apparently, the country has been working on that for the last couple of years.
Nevertheless, there is a dearth in the country's capacity in international trade negotiations and homework on the complex dynamics of global trade. Over the decades, the governments did not take adequate measures to develop human resource in this regard despite getting international funds. Still there is no adequate support for those who want to improve their capacity on WTO-related issues and other areas of global trade. The activities of WTO wing of the commerce ministry face disruption due to frequent transfer of the officers. Bangladesh Tariff and Trade Commission (BTTC) has been suffering due to lack of sufficient budget and undue interference of the ministry. The need for capacity building is urgent, as demonstrated by Bangladesh's decision to refrain from joining any plurilateral talks.