COVID-19, E-commerce & services, Latest news, MC12, WTO crisis and reform, WTO dispute settlement, WTO Fish

The WTO’s new ‘Geneva Package’: What’s been agreed?

WTO trade ministers have brought the institution’s 12th ministerial to a successful conclusion with a compromise deal on a package of measures on a TRIPS waiver, agriculture, fisheries and WTO reform.

The deal, which has been christened the ‘Geneva Package’ by diplomats, also includes a 2-year extension of the existing moratorium on duties on e-commerce.

The chair’s gavel fell to wrap up the ministerial meeting at just before 5am Geneva time on Friday – almost 36 hours later than the originally scheduled end time.

Negotiations over the final details of the TRIPS waiver, designed to facilitate production of COVID-19 vaccines by developing countries, took up most of the final hours of negotiation.

The deal will be a confidence boost for the beleaguered WTO organisation – although many elements of the final agreement were only reached after the original proposals were substantially watered down.

As has been the case in most recent ministerials, India was at the heart of the negotiations at MC12.

It initially attracted criticism from a wide range of delegations for taking an obstructive approach to the negotiations. But India’s proved to be an effective tactic of brinkmanship, as it found itself at the heart of negotiations in the final 24 hours to secure deals which were more to its liking than what had been on the table before.

By contrast, the United States held a very low profile at the meeting. Russia prevented what could have been a politically very difficult situation by adopting a policy of quiet cooperation in the background.

Compromise formula reached to enable TRIPS waiver for COVID-19 vaccines

A deal has finally been done on the TRIPS waiver issue, more than two years after the pandemic first struck. It comes some eighteen months after India and South Africa first proposed a waiver of the normal intellectual property rules, under the WTO’s TRIPS agreement, to facilitate vaccine production by poorer countries.

The waiver will apply for five years – and it will apply only to vaccine production.

The UK and Switzerland – both major centres of pharmaceutical research and development – had led the objections to proposals to extend the waiver to therapeutic and diagnostic treatments as well.

In the end, it has been agreed that “no later than six months” after MC12, WTO members “will decide on its extension” to cover these products. These opens up the prospect of the TRIPS waiver row re-erupting when this issue comes back to the table towards the end of this year.

The very last issue to be decided was the question of whether developing countries with a significant share of global vaccine production – read ‘China’ – should be specifically excluded from the waiver’s provisions.

But after last-minute discussions between the US and China, all references to percentage share of global production were dropped.

The relevant footnote now simply states: “Developing country members with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this decision”. China has already made such a commitment.

Developed countries have also agreed to soften their objections to vaccines being made under waiver being re-exported.

The text now states that eligible members “shall undertake all reasonable efforts” to prevent the re-exportation of the products manufactured.

There is a specific exemption in cases where vaccines are exported for “humanitarian and not-for-profit” purposes.

Non-binding pledge to keep markets open if pandemic strikes again

Separately from the TRIPS waiver, ministers have also agreed a 29-point statement on the WTO response to the COVID-19 pandemic and preparedness for future pandemics”.

This includes a commitment to ensure that any future emergency trade measures designed to tackle a pandemic situation, where these are deemed necessary, are “targeted, proportionate, transparent, temporary, and do not create unnecessary barriers to trade or unnecessary disruptions in supply chains”.

Members have also pledged to “exercise due restraint” in imposing bans on exports of healthcare products – something which was a feature of the initial stages of the current pandemic.

E-commerce moratorium extended until MC13

The global tech industry had been seriously worried at the outset of MC12 about the risk of the moratorium on imposing duties on e-commerce being allowed to lapse, if a wider agreement failed to emerge.

After repeatedly claiming that it would veto any extension, India eventually agreed to a further rollover until MC13 – repeating a pattern which has been seen in all of the most recent WTO ministerials.

But the stay of execution is, once again, a temporary one.

The moratorium is extended until MC13, “which should ordinarily be held by 31 December 2023”, the text says.

It adds: “Should MC13 be delayed beyond 31 March 2024, the moratorium will expire on that date unless ministers or the General Council take a decision to extend.”

India also succeeded in adding an additional clause to the agreement stating that the WTO General Council “will hold periodic reviews [of the moratorium] … including on scope, definition, and impact of the moratorium on customs duties on electronic transmissions.”

Members agree to refrain from export restrictions on WFP food aid purchases

Among the few concrete decisions to emerge from MC12 is a commitment by member countries to “not impose export prohibitions or restrictions on foodstuffs purchased for non-commercial humanitarian purposes by the World Food Programme”.

But the impact of this clause has been weakened somewhat by a second clause which states that the decision “shall not be construed to prevent the adoption by any member of measures to ensure its domestic food security”.

Declaration on trade and food security

The issue of food insecurity was also at the heart of a separate ministerial declaration on the ‘emergency response’ to the worsening food crisis.

Ministers have agreed to “take concrete steps to facilitate trade in and improve the functioning and long-term resilience of global markets for food and agriculture” – although it is not spelt out what these steps could be.

The declaration reaffirms the importance of keeping trade in agri-food goods flowing, and of not imposing export prohibitions or restrictions “in a manner inconsistent with relevant WTO provisions”.

One concrete commitment is to set up a dedicated work programme in the WTO’s Committee on Agriculture to examine how to improve the effectiveness of an existing WTO commitment to help least developed countries and net food-importing developing countries overcome the worst aspects of food shortages and high price rises.

Talks on WTO reform set to commence

The WTO membership also gave the green light to a programme of negotiations to reform the functioning of the Organization.

The commitment was made as part of the final ‘outcome document’ from MC12 – the status of which stands below that of a ministerial declaration, primarily to avoid western countries and Ukraine having to be co-signatories of a document along with Russia, as would otherwise be required.

The differences of opinion between different members of what needs fixing in the WTO, and how to fix it, have been addressed – by leaving the agenda largely open-ended.

“We commit to work towards necessary reform of the WTO … . we envision reforms to improve all its functions,” the text says.

The “challenges and concerns” relating to the dispute settlement system, “including those related to the Appellate Body”, are explicitly referenced in the text.

The negotiations are to be conducted “with the view to having a fully and well-functioning dispute settlement system accessible to all members by 2024”, it adds.

No reference is made to the role and status of plurilateral negotiations within the WTO framework – although this issue, a key concern of civil society groups and some developing countries, is sure to be addressed when the negotiations get under way.

The text states that the reform negotiations will be undertaken by “the General Council and its subsidiary bodies”. This came after India dropped its initial insistence that the work should be done by the General Council only.

“We will conduct the work, review progress, and consider decisions, as appropriate, to be submitted to the next ministerial conference,” the text promises.

Agreement on watered-down deal on fisheries subsidies

The multilateral agreement on disciplining fisheries subsidies agreed this week as part of the package is a significant achievement after some 21 years of negotiations on the topic. It came at the price of substantially weakening the deal in terms of its scope.

The text of the deal was not immediately published, but the original Article 5 of the draft agreement, which addressed subsidies liable to contribute to overfishing, has been dropped in its entirety. This is to be the subject of further negotiations in the future.

This leaves only bans on subsidies to illegal fishing, and to fishing directed towards stocks which are already overfished.

The existence of a new multilateral agreement, agreed in compliance with UN Sustainable Development Goal 14.6, is however being viewed as a major victory for the WTO, and for the marine environment.

No agreement on agriculture – or public stockholding

One clear area of failure for the organisation, however, is on agriculture.

Differences on the different aspects of the proposed work programme on agriculture meant that “we could not achieve consensus on a new roadmap for future work,” in the words of WTO director- general Ngozi Okonjo-Iweala.

This includes the question of including public stockholding for food security purposes, a point in which India took a maximalist stance which many other delegations found unrealistic.

But talks on agriculture will nevertheless continue on the basis of existing mandates.

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