Trump administration quietly pays overdue WTO fees – Financial Times

Report on United States’ Financial Contribution to the World Trade Organization and its Implications for Sustainable Development Goals

Executive Summary

This report details the recent payment of over $25 million in overdue membership fees by the United States to the World Trade Organization (WTO). The analysis focuses on the implications of this action for several key Sustainable Development Goals (SDGs), including SDG 16 (Peace, Justice and Strong Institutions), SDG 8 (Decent Work and Economic Growth), SDG 10 (Reduced Inequalities), and SDG 17 (Partnerships for the Goals). While the payment supports the WTO’s operational capacity, it occurs within a context of broader actions that challenge the institution’s effectiveness, presenting a nuanced impact on the global development agenda.

Financial Contribution and Institutional Standing

The United States has settled its 2024 assessed contributions to the WTO, a development that directly impacts the stability and functionality of a key global institution.

• Payment Details: The contribution amounted to SFr23.2 million (approximately $25.7 million), representing 11% of the WTO’s annual budget.
• Reversal of Status: The payment reverses the “administrative measures” imposed on the U.S. in March 2024 due to arrears, restoring its formal standing within the organization.
• Context: This action follows a period of public criticism of the WTO by the administration and a previously announced review of U.S. funding to multilateral organizations.

Implications for SDG 16: Peace, Justice and Strong Institutions

The U.S. payment has a dual effect on the objective of fostering effective, accountable, and inclusive institutions at all levels.

1. Support for Institutional Operations: By providing essential funding, the U.S. contributes to the WTO’s administrative and technical capacity, which is a foundational element of a strong global institution as envisioned by SDG 16.
2. Undermining of Institutional Justice: The contribution is contrasted by the continued U.S. refusal to appoint judges to the WTO’s appellate body. This action effectively neutralizes the organization’s primary enforcement mechanism, hindering its ability to deliver impartial justice in trade disputes and weakening it as a strong institution.

Impact on SDGs 8 & 10: Economic Growth and Reduced Inequalities

The restoration of WTO funding is critical for programs that support developing nations, directly aligning with goals for inclusive economic growth and inequality reduction.

• Alleviation of Budgetary Constraints: The U.S. payment eases financial pressures that had forced the WTO to scale back activities.
• Restoration of Technical Assistance: A primary beneficiary is the WTO’s technical assistance to developing country governments. This support is crucial for enabling these nations to participate more effectively in the global trading system, thereby promoting sustained, inclusive, and sustainable economic growth (SDG 8).
• Promoting Equitable Trade: By empowering developing countries to navigate complex trade rules, this assistance helps create a more level playing field, contributing to the goal of reducing inequality within and among countries (SDG 10).

Analysis of SDG 17: Partnerships for the Goals

The nature of the U.S. engagement with the WTO offers a complex case study for the global partnerships required to achieve the SDGs.

• A Nuanced Partnership: The payment signifies continued U.S. participation in a key global partnership. However, expert analysis suggests the motivation is not a renewed faith in multilateralism but a strategic move to maintain influence and control.
• Selective Engagement: The U.S. approach involves using its financial contribution to maintain its position while simultaneously impeding core functions of the organization. This selective engagement highlights the challenges inherent in strengthening the global partnership for sustainable development (SDG 17).
• Future of the Partnership: The action is unlikely to signal wholesale support for the WTO, as fundamental disagreements over reform persist ahead of the next ministerial conference, indicating continued friction within this global partnership.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 17: Partnerships for the Goals
   • The article’s central theme is the financial relationship between a member state (the US) and a key multilateral institution (the World Trade Organization). This directly relates to strengthening the means of implementation and revitalizing the global partnership for sustainable development. The payment of membership dues is a fundamental aspect of supporting global institutions that govern international cooperation.
2. SDG 16: Peace, Justice and Strong Institutions
   • The article discusses the functioning, funding, and challenges of the WTO, which is a critical institution for global governance. The US payment of its overdue fees, despite its political criticisms, is an action that contributes to the operational stability and strength of this institution. The text also highlights institutional weaknesses, such as the neutered appellate body, which is relevant to the goal of building effective and accountable institutions at the global level.
3. SDG 10: Reduced Inequalities
   • The article mentions that the WTO’s budgetary constraints, caused by non-payment of dues, led it to “scale back activities and technical assistance to developing country governments.” A rules-based trading system and the technical assistance provided by the WTO are crucial for helping developing countries participate more equitably in global trade, thereby helping to reduce inequalities between countries. The restoration of funding directly impacts this function.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 17.10: Promote a universal, rules-based, open, non-discriminatory and equitable multilateral trading system under the World Trade Organization.
   • The entire article revolves around the WTO, the primary institution for the global multilateral trading system. The payment of membership fees by the US is a fundamental action required to sustain this system, even as the administration criticizes its effectiveness and blocks its enforcement mechanisms.
2. Target 17.16: Enhance the Global Partnership for Sustainable Development, complemented by multi-stakeholder partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support the achievement of the Sustainable Development Goals in all countries, in particular developing countries.
   • The US payment of over $25mn is a direct mobilization of financial resources to support a key global partnership institution. Furthermore, the article notes this funding will ease constraints on “technical assistance to developing country governments,” which is a form of sharing expertise to support development.
3. Target 16.8: Broaden and strengthen the participation of developing countries in the institutions of global governance.
   • The article implies that the WTO’s budget shortfall hindered its ability to provide “technical assistance to developing country governments.” This assistance is vital for building the capacity of these countries to participate effectively in the WTO and global trade. The payment helps restore the WTO’s ability to support this participation.
4. Target 10.a: Implement the principle of special and differential treatment for developing countries, in particular least developed countries, in accordance with World Trade Organization agreements.
   • The “technical assistance to developing country governments” mentioned in the article is a practical application of this principle. It helps these countries understand and implement complex trade rules and leverage the system to their benefit. Funding the WTO is essential for the organization to carry out these supportive functions.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Financial Contributions to International Organizations
   • The article provides explicit quantitative data that can serve as an indicator of a member state’s financial commitment to a global institution. Specific figures mentioned are:
     • The total payment of “more than $25mn.”
     • The specific 2024 contribution of “SFr23.2mn.”
     • The US share of the WTO budget, which is “11 per cent.”

     This directly measures the mobilization of financial resources (Target 17.16).

2. Provision of Technical Assistance to Developing Countries
   • The article implies an indicator by stating that budgetary constraints had led the WTO to “scale back activities and technical assistance to developing country governments.” The restoration of this assistance, made possible by the payment, can be measured. Progress could be tracked by monitoring the budget and number of technical assistance programs the WTO provides, which relates to supporting developing countries’ participation (Target 16.8) and reducing inequalities (Target 10.a).

4. Table of SDGs, Targets, and Indicators

Source: ft.com