What can we expect at the twelfth WTO Ministerial Conference? Zee Business Executive Editor Swati Khandelwal highlights 5 key pointers
The twelfth WTO (World Trade Organisation) Ministerial Conference (MC12) will take place during 12-15 June 2022 in Geneva to take a call on at least six crucial issues impacting trade and livelihood. Ministerial Conference is the highest decision-making body of the WTO. MC11 took place in 2017.
Here is a lowdown on the five ‘potential’ deliverables that will be discussed at the MC12.
One, WTO response to the pandemic
The COVID-19 pandemic has caused unprecedented disruption to the global economy and trade. WTO’s response to the pandemic remains the top priority for MC12.
The TRIPS Waiver proposal led by India and South Africa and backed by many WTO members is a key element of the response. This is a proposal to waive patent protections on COVID-19 vaccines temporarily. Implementing this will require easing the existing barriers to issuing compulsory licenses for patents on COVID-19 vaccines.
Looking at the destruction the pandemic has caused, the decision should have been swift. However, under pressure from the Pharma lobby, most developed countries argued for solutions which essentially meant opposing the proposal. The outcome may not be decisive.
Two, Agriculture and Food security
Progress on Agriculture issues could lead to significant improvements in how markets for food and agriculture function by helping to correct distortions in world trade.
At the MC12, negotiations take place on seven agricultural trade topics – public stockholding for food security purposes, trade-distorting domestic subsidies, cotton, market access, the special safeguard mechanism, export competition, export restrictions, and prohibition as one cross-cutting issue, transparency.
Agriculture is a challenging subject to negotiate, and the positions of WTO members in all the seven negotiation areas remain diverse. As the WTO members maintain different positions, MC12 may yield a modest outcome. The primary outcome would be to agree to discuss the issues further through structured meetings called work programs.
For India, the top priority in Agriculture negotiations would be securing the Permanent Solution to the issue of Public stock holding (PSH). PSH program is a policy tool used by the Government to purchase, store and finally distribute food to the poor.
The Indian Government buys crops like rice and wheat from the farmers at the minimum support price, which is generally higher than the prevailing market price. The Government then stores and sells these at a low price to ensure food security to more than 800 million poor people.
However, Agreement of Agriculture rules limit the ability of the Government to purchase food at government-set prices. Hence seeking a permanent solution to the issue of food security is India’s foremost concern.
The large-scale opposition to India’s proposal shows that the WTO deals with trade in a cold, heartless manner with no care for basic human needs. India seeks a fast-track resolution of the issue with no linkage with domestic support.
Another critical area is food security. Some members are only interested in negotiating measures that aim “to keep the markets open” – especially elimination/restraint on Export Restrictions, including World Food Programme (WFP) procurements, rather than exploring solutions to augment food supplies.
India has been a major contributor to the WFP programs over the years, and it has lent extensive support to its immediate and distant neighbors with food supplies. India feels that the Food security declaration, other than tokenism, serves no other purpose.
Three, WTO reforms
The critical subject includes resolving the impasse in the Dispute Settlement System (DSS) to preserve the rights and obligations of all WTO Members. The resolution of the Appellate Body (AB) impasse needs to precede other reforms.
AB must preserve its essential features, namely an independent, two-tier dispute settlement system, automaticity in the launch of proceedings, and decision-making by the Dispute Settlement Body (DSB) by negative consensus, where provided.
On other vital reforms, India reaffirms the centrality of Special and Differential Treatment (S&D) as a non-negotiable, treaty-embedded right for developing Members and LDCs.
It is estimated that 34% of global stocks are overfished compared with 10% in 1974. This means the reserves are being exploited at a pace where the fish population cannot replenish itself.
Reasons: Fishing is a big corporate business. EU fishing vessels catch fish from far-off Africa, but the EU lectures poor countries that traditional fishing vessels used by small fishermen deplete the global stock.
Also, the rich countries led by the EU, the US, and Japan provide the most subsidy — 65 percent of the total annual $35-billion fisheries subsidy. But as these subsidies are largely non-specific or Green Box, they are clear. Poor countries mostly give direct support, which the WTO considers bad. Like agriculture, this is also a market access versus livelihood issue.
The negotiations on fisheries subsidies are aimed at broad and practical disciplines on marine wild capture fishing and fishing-related activities by prohibiting subsidies to three pillars: (I) Illegal, Unreported & Unregulated (IUU) fishing.; (II) Overfished stocks; and (III) Overfishing and Overcapacity.
The key demandeurs of fisheries subsidies disciplines are the EU, Japan, Australia, New Zealand, Canada, the US, Iceland, Norway, etc. Countries like India, Indonesia, and the ACP group want flexibility under special and differential treatment (S&DT).
Five, extension of the e-commerce and TRIPS non-violation and situation complaints (NVSC) moratoriums
The WTO members in 1998 agreed to not charge (Moratorium) Customs Duties on Electronic Transmission for two years, and then a call was to be taken by the ministers for a future course. At the MC12, there are two competing proposals.
One favoring the continuation of the Moratorium and another co-sponsored by India, Indonesia, and South Africa remains quiet on the question of the Moratorium on Customs Duties on Electronic Transmission. Still, it stresses the importance of rejuvenating the Work Programme on E-Commerce. So far, there is no consensus between the two groups.
Another issue is linked to the TRIPS agreement. While countries can launch disputes at the WTO for trade in goods and services, there is a moratorium over intellectual property rights. Under Article 64.2 of the WTO, a “moratorium,” i.e., the agreement not to use TRIPS non-violation complaints, was to last up to 1999.
Beyond this time, members were to make recommendations to the Ministerial Conference. This Moratorium has been extended several times since then. It is expected that MC12 may extend the Moratorium again.
These are challenging times for global trade. Some impactful outcomes will show that the WTO is back on track. However, widely diverse positions and few Western countries’ efforts to isolate Russia at the WTO over the war in Ukraine are dampening the preparations.
Improving people’s standard of living and ensuring full employment are two of the critical stated objectives of the WTO. WTO member countries need to reconcile their negotiating positions with these.