COVID-19, health, MC12

WTO Corner: Plastics, vaccines trade data, European Parliament, UK WTO prescriptions

The number of small developments related to the upcoming WTO 12th ministerial conference is growing exponentially, and it’s a genuine challenge to keep track of everything as there are so many moving parts. Here a selection – for today. Put together for you by the Borderlex Trio Rob Francis, Chris Horseman and Iana Dreyer.

WTO plastics pollution initiative ready for kick-off at MC12

This week the WTO published a Ministerial Statement on Plastics Pollution and Environmentally Sustainable Plastics Trade which is one of the plurilateral initiatives to be announced at MC12.

The initiative proposes a number of actions which can be undertaken by the willing to tackle plastic pollution from a trade perspective. The statement, dated 22 November, has attracted 60 co-sponsors so far, with other members invited to join in the lead up to next week’s ministerial conference.

The statement will be formally launched by ministers in Geneva on 1 December, together with the other plurilateral agreements on Trade and Environmental Sustainability Structured Discussions (TESS-D) and fossil fuel subsidies.

The document notes that “recent research by the United Nations Conference on Trade and Development indicates trade in plastics accounts for as much as 5% of global trade – or more than 1 trillion US dollars in 2019 – almost 40% higher than previously estimated, with more trade in plastics still unaccounted”.

Signatories to the statement plan to identify actions that can “support global efforts to reduce plastics pollution” as well as “improve the understanding of global trade in plastics, including flows of plastics embedded in internationally traded goods or associated with them (such as plastic packaging), and enhance transparency regarding trade policies relevant to reducing plastic pollution and more environmentally sustainable plastics trade”.

They also plan to share best experiences regarding how to move to more environmentally sustainable plastics trade and address “trade-related capacity building and technical assistance needs of developing members, in particular least developed members and vulnerable Small Island Developing States”.

There is further a pledge to “engage and support actions in other international processes” such as the United Nations Environment Assembly, the International Organization for Standardization, and the Basel Convention, as well within the WTO itself. Discussions with these fora would cover issues such as the definition of plastics, standards, design, and labelling, as well as how to improve data gathering on trade flows and supply chains.

The statement also mentions the need to hold “dedicated discussions” on how “trade-related cooperation” could help reduce “unnecessary or harmful plastics and plastic products” and how to “promote trade in goods and services … that can reduce plastic pollution”.

The stated aim of the statement is to “look for concrete, pragmatic, and effective outcomes on these actions and understandings at the latest by MC13”.

European Parliament digs in on demand that EU support TRIPS waiver

The European Parliament is set to adopt a resolution tomorrow on its priorities for MC12 in which it will call for the EU to “support the granting of a temporary waiver from certain provisions of the TRIPS agreement for COVID-19”.

The amendment on the waiver, which was put forward by the Greens group and adopted narrowly during this afternoon’s plenary session by just five votes, will be confirmed tomorrow in a further vote on the report as a whole. Such votes are usually a formality.

This is the latest in a series of parliament votes where the institution has supported such a waiver and therefore set itself up in opposition to the European Commission which prefers to prioritise voluntary and compulsory licencing.

The Parliament’s resolution goes on to warn that the WTO “is at risk of losing legitimacy if not all members commit to a successful outcome of MC12”.

It asks that WTO members find “as a minimum, a multilateral agreement on prohibiting unsustainable fisheries subsidies, as well as on pandemic response, a limited package on agriculture, and on launching work towards institutional reform, including a process that would lead to a fully functioning dispute settlement system by MC13 at the latest”.

“Without substantial outcomes at MC12,” the report states, “some members might look for alternative forums for rule-making, which might jeopardise the future of the multilateral trading system”.

On health, the resolution supports eliminating tariffs on pharmaceutical and medical goods and abolishing export restrictions, both of which were addressed in a previous version of the declaration destined for minister approval at MC12.

MEPs also call for the establishment of a new permanent Committee on Trade and Health at MC12 “in order to assist governments with implementing existing exceptions and flexibilities in international trade law and to lay the groundwork for a trade pillar for the negotiations on a future international treaty on pandemic response”.

Regretting the “stalemate” around the Appellate Body, MEPs urge the United States to “commit to starting a constructive negotiation process on dispute settlement reforms at MC12 so that a fully functioning system is in place no later than MC13”.

In an unspoken reference to China, parliamentarians also call on the Commission and Council to “cooperate with all WTO members in order to start a discussion on establishing new rules to address current gaps in the rulebook on unfair trade practices, counterfeiting, market-distorting subsidies, state-owned enterprises and forced technology transfer”.

The parliament wants WTO reform to “create an easier path for open plurilateral agreements to be integrated into the multilateral architecture” and “establish a straightforward mechanism which allows the resulting agreements to be incorporated into the WTO structure”.

The resolution also calls on WTO members to consider all possible measures to contribute to limiting greenhouse gas emissions in line with the United Nations Framework Convention on Climate Change, reinforce alignment with the Paris Agreement and climate neutrality” and emphasises the need to advance negotiations on the Environmental Goods Agreement.

“The @EP_Trade resolution is very balanced and I call upon everyone to support it,” tweeted the Chair of the Parliament’s International Trade Committee and Joint Rapporteur for this resolution Bernd Lange. “WTO needs our support!”

World trade in vaccines: WTO launches vaccines trade tracker

The WTO secretariat released a new easy-to-use Vaccine Trade Tracker – put together in collaboration with the International Monetary Fund.

The tracker produces ruthlessly effective graphs, which show who produces and trades vaccines across borders. There is little that is genuinely new to those familiar with the topic – but there is a lot that is made more glaringly explicit than ever.

The number of vaccine producers is very limited. China produces 46.5% of global vaccines, the European Union 19.7% , India 15.4%, followed by the US – 10.7%. Speaking of trade resilience: the world is ‘strategically dependent’ on the big and powerful for its vaccines.

So who trades in vaccines? Mainly China and the EU – which account for the bulk of global exports: 46% of world exports for China, and 30.3% for the EU. The US provides 10.4% of world exports. India’s production mainly stays in India.

Most trade is commercial and most exports go to the richer developing countries who can pay for vaccines. Only 8.1% of world exports are contracted via the COVAX facility aimed at developing countries. Donations to COVAX are also counted as ‘exports’ – 7.5%.

Do go and check the tracker for yourself.

A UK prescription for the WTO’s woes: convergent regional mega-deals?

Progressive convergence between the world’s big plurilateral and regional trading blocs may be a more reliable route to a new global trading system than fundamental reform of the World Trade Organization, a senior UK trade official has suggested.

The idea of “convergent plurilateralism” was floated at a London trade conference today on Monday (22 November) by Crawford Falconer, the former New Zealand trade diplomat who is now chief advisor on trade negotiations at the UK Department for International Trade.

Falconer was speaking at the Margaret Thatcher Conference on Trade, organised by the right-leaning Centre for Policy Studies.

The conference attracted a wide range of speakers from the pro-Brexit ‘establishment’ in the UK, and as such provided a snapshot of current attitudes within the British government and their influencers on attitudes to the WTO and wider trade issues.

There was a good deal of support for the free-trading aims and principles of the WTO, but also frustration at the political logjams within the organisation which were holding up effective reform of world trade rules.

A world of convergent plurilateralism

A number of speakers took the view that free trade coalitions such as the Comprehensive and Progressive Agreement on Trans-Pacific Partnership, to which the UK is currently negotiating accession, could pave the way to a revitalised global trading arena.

“It’s not difficult to envisage the centre of gravity for international trade rules shifting from genuine multilateralism to a convergent plurilateral world,” said Crawford Falconer, in a relatively rare public intervention.

“That’s a serious prospect for about ten years’ time.”

Falconer told the conference that the ‘business as usual’ option would see the WTO system remaining essentially unchanged from the current status quo, but liable to being “eroded in various places over time”.

He commented: “The WTO could still totter on. But the multilateral system has not kept up with changes in the world economy, and people have got on with doing their own thing [in terms of seeking bilateral and regional trade agreements].”

Merging USMCA and CPTPP?

Falconer maintained that big plurilateral agreements like CPTPP or the North American USMCA deal were “more noticeable for their similarities than their differences”.

And, he added: “In time, people may start saying, let’s join these up.”

The alternative, he suggested, would be to remedy the beleaguered WTO system – but he warned that there was a lot of work to do to “reconstruct it as a workable system”.

A similar view was voiced at the conference by Anthony Mangnall, a Conservative MP who is a member of Parliament’s international trade committee.

“CPTPP is the fastest growing region in the world, in economic terms”, he noted. “We are creating these plurilateral systems which in time can merge together. There is a huge opportunity here for us in Britain to lead the process.”

WTO ‘needs repair’ – Mandelson

Former EU trade Commissioner Peter Mandelson, who also addressed the conference, gave a similarly pessimistic appraisal of the state of the global trading system – but said that responsibility for fixing the problem lay primarily beyond the UK.

The WTO system, he said, “needs repair and improvement” – and this remedial work needed to start with the WTO dispute settlement system, which has been hamstrung for the past two years because of a US refusal to approve new appointees to the Appellate Body .

“But changes have to be negotiated, not imposed,” Mendelson commented. “That’s the leadership the system needs from the US, China and others.”

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