It’s busy in Geneva these days. An overview of some of the latest developments by Robert Francis and Iana Dreyer.
Statement on sustainability expected for MC12
The second round of discussions at the WTO on how to incorporate sustainability within the global trade system concluded last week with a real sense of optimism among participants that a strong statement could be presented at MS12 at the end of the year.
Launched in November last year by 53 WTO members with the backing of the incoming Director General and known as the “Trade and Environmental Sustainability Structured Discussions (TESSD),” the forum aims to advance work on trade and environmental sustainability and enable commitment-free conversations to happen without fear of being shut down by one country.
Unusually for the WTO, the sponsors have taken the decision to include civil society in the preparatory work, with representatives from NGOs, academics, and international organisations speaking during the first two days of discussions, though the third day took the form of the more familiar huis clos members-only meeting.
The initiative is being driven by various members combining developed countries (such as Canada, the EU, and New Zealand) with lesser developed countries (Chad, Moldova, and Senegal), all of whom are said to be very active in the discussions.
China and the US are noticeable for their absence, but both are said to have spoken during last week’s meeting and, crucially, are not currently blocking the process.
The US even helped come up with last week’s communiqué from the G7’s trade ministers, which states that the TESSD represents “an opportunity to build momentum” when it comes to making trade a solution in the fight against climate change.
There are concerns however from civil society that India and South Africa could seek to disrupt the process and sow doubt among others in their region.
EGA and EGS in the lead
The issues currently in the frame include environmental goods and services, green aid for trade, fossil fuel subsidies, trade-related climate measures including border carbon adjustments, greening trade, and priorities for developing countries.
Of these, a quick look at the agenda for last week’s meeting reveals that environmental goods and services is very much the primus inter pares given the time allocated, whilst the more controversial issues of fossil fuel subsidies and border carbon adjustments were relegated to smaller segments on the final day.
These issues have been identified as the priorities for the group, but others are bubbling away under the surface. The challenge, as ever, is to try and reach consensus whilst not diluting the ambition of the final statement.
Indeed, with more countries, including developing countries, now joining in the climate conversation, the task of coming up with a statement which satisfies all has become much harder than it was a decade ago.
One mooted solution could be for smaller groups of like-minded countries to make statements on one or more of the above issues, such as environmental goods and services, whilst the overall statement remains overarching and broad in nature.
More structured meetings are pencilled in for July and September, at which point the actual wording of the overarching statement will start to be agreed.
The TESSD could be a game-changer for the WTO if it brings climate and broader environmental topics into the institution.
Fish subsidy talks: developing country exemption options narrowed down
Fish subsidy negotiations continue on a rolling basis. According to Geneva-based trade expert and former WTO official Peter Ungphakorn, negotiators on Monday have discussed specific ‘formats’ for exempting – full or in part – the world’s poorest countries from the obligations enshrined in the agreement.
The main challenge is to avoid that countries with large fishing fleets despite still being nominally poor – get exempted and continue subsidizing industrial-scale fishing.
Options on the table, according to developing countries “voluntarily opt out of special treatment,” “have rules to prevent large players enjoying exemptions,” “list countries specifically eligible,” “vary it by country,” Ungphakorn tweeted. Signs are China might be ready to play game and not seek sweeping exemptions for its fishing fleets. This remains to be confirmed.
IP waiver talks: EU postpones the release of its COVID-19 proposals
WTO members met on Monday (31 May 2021) to discuss a proposed waiver on TRIPS rules to help boost access to medical care and vaccines in developing countries. The meeting mainly focused on a revised proposal by South Africa, India and other allies in this affair. The meeting yielded nothing new. The supporters and opponents basically said the same things they have been saying for the last few weeks.
The United States has said it supports “any proposal that could address the immediate need for increased vaccine production and distribution,” indicating that the scope of India’s and South Africa’s proposal might be too broad. The new proposal covers more than just patents on vaccines: it also wants a waiver on a range of IP protections on medical and pharmaceutical countries. The US has also not indicated it would be tabling new text, but is waiting for a new text to emerge “which it can agree to,” according to WTO sources.
The European Union reiterated its intention to propose a new WTO ‘deal’ on boosting vaccine access globally. Plans to announce the deal on Wednesday (2 June) this week were postponed following yesterday’s meetings in Geneva.
G7 trade ministers agree on subsidies, disagree on Appellate Body
For those who missed it or were on an extended bank holiday week-end, last Friday’s trade ministers communiqué for the G7 revealed some of the remaining dividing lines between the United States and most of the other G7 meetings. There is one area of consensus however: “We call for the start of negotiations to develop stronger international rules on market-distorting industrial subsidies and trade-distorting actions by state enterprises. We will continue our efforts to tackle unfair practices that force companies to transfer technology to the state or to competitors. We recognise the critical importance of engaging with other WTO Members on these issues,” says the G7 communiqué.
Apart from that: “we engaged in frank and constructive discussions regarding reform of the WTO Dispute Settlement System, and committed to continuing these discussions ahead of our meeting in October .”
Australia complaint against Chinese anti-dumping duties on barley proceeds to panel
Apart from the panel in the complaint by Malaysia against the EU’s REDII regulation regarding palm oil, the Dispute Settlement Body also agreed on Friday to establish a complaint filed by Australia against China’s 73.6% anti-dumping and 6.9% countervailing duties on its barley.
The Chinese duties are only one set of import restrictions imposed on Australian exports following Canberra’s support for an international inquiry on China’s handling of the COVID-19 virus issue. Australia safely picked the fight on an issue that the WTO can manage politically: a ‘standard’-looking trade defence WTO dispute.