Outlook on the Global Trading System in 2015 Taeho Bark Graduate School of International Studies Seoul National University January 29, 2015 Prepared for 2015 CommonWealth Economic Forum

1. Uncertain Global Trading System The multilateral trading system under the WTO is facing unprecedented challenges despite the success achieved at the Bali MC9 in December 2013 - The WTO is also becoming increasingly outdated as it could not keep up with the rapidly changing global trading environment At the same time, regionalism is rising around the world - The proliferation of the RTAs tends to divert attentions as well as human resources from the multilateral trade negotiations

2. The Year 2015 for the Global Trading System The year 2015 is extremely important for the global trading system - April 15th marks the 20th anniversary of the establishment of the WTO - The 10th Ministerial Conference of the WTO will be held in Kenya in December With regard to the global trading system, issues in 2015 will be similar to those of previous years - The WTO’s continuous efforts to promote multilateralism and further pushes for major Mega-RTAs will be made simultaneously throughout the year

3. The WTO’s Agenda in 2015 To start implementing the trade facilitation agreement and prepare the work program for the remaining Doha Round issues Now is the time for the WTO members to discuss frankly about the future of the Doha Round - They should consider every potential options including the declaration of the Doha Round’s failure - The mini Ministerial Conference can be held before the summer break

4. The Plurilateral Negotiations Relevant parties will make efforts to conclude the ongoing plurilateral negotiations on Information Technology Agreement (ITA-II) and Trade in Services Agreement (TISA) - If they are successfully concluded, uncertainties in the global trading system will be reduced to some extent In the case of TISA, participants should discuss ways to effectively multilateralize the agreement

5. Outlook on the Mega-RTAs (1) None of the recently launched Mega-RTAs has been concluded The TPP seems to have made most progress - Some experts predict that the TPP could be completed within the first half of this year - The US and Japan have yet to make final compromises on several sensitive products - Once concluded, it would be essential to allow new members to join, particularly East Asian economies with great economic potentials

5. Outlook on the Mega-RTAs (2) The slowly moving RCEP may not be able to achieve its 2015 deadline The CJK FTA has not made further progress due to political conflicts in North East Asia To generate substantial economic benefits, both the RCEP and CJK FTA negotiations should aim for high-quality RTAs

5. Outlook on the Mega-RTAs (3) The TTIP negotiations have been moving slowly so far The US and the EU may accelerate the TTIP negotiations this year If concluded, it would become the largest RTA in the world The TTIP may focus more on the convergence of regulations rather than the elimination of trade barriers - If regulatory convergence is achieved through the TTIP, it will provide a valuable precedent for the multilateral trading system to follow

6. The Relations between Multilateralism and Regionalism Multilateralism and regionalism will coexist and move forward in parallel - In such a difficult economic environment, they seem to be sharing burdens rather than competing against one another The ongoing Mega-RTAs should be pursued to supplement the multilateral trading system The WTO’s Committee on RTAs (CRTA) should strengthen its role in collecting and disseminating information on the Mega-RTAs

7. Outlook of the Global Trading System in 2015 (1) The outlook of the global trading system will continue to be uncertain in 2015 Moreover, trade officials are losing confidence in their work and start to show symptoms of negotiation fatigue The global trading system faces the most serious crisis since the establishment of the WTO 20 years ago - The global trading system is at a crossroads

7. Outlook of the Global Trading System in 2015 (2) Depending on the efforts made in 2015, the global trading system could either seize a momentum to revitalize or collapse - If the WTO cannot find viable solutions to the remaining issues of the Doha Round, the multilateral trading system will suffer from irreversible damages to its credibility - The global trading system will then be dominated by regional agreements causing huge costs to the world economy

8. Importance of Political Leadership All nations must understand the far-reaching implications of the failure of the global trading system, particularly the multilateral trading system In this context, it is crucial to draw political leaders’ attention on the current global trading environment We should persuade politicians to exert their political leadership by reminding them that the failure to sustain the multilateral trading system will generate enormous costs