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TWN Info Service on Health Issues (Apr20/01)
1 April 2020
Third World Network

G20 fails to arrive at concrete developmental package for South
Published in SUNS #9092 dated 1 April 2020

Geneva, 31 Mar (D. Ravi Kanth) — Trade ministers of the Group of 20 countries (G20) on 30 March failed to arrive at a concrete developmental package for assisting developing and least-developed countries (LDCs) in combating the deadly COVID-19 disease that has already claimed more than 37,000 lives around the world, sources told the SUNS.

The three-hour virtual meeting on 30 March witnessed sharp disagreements between the US, which spoke at the end of the meeting, and China over the issue of supply chains, and attempts by the European Union to use the COVID-19 pandemic to push through further liberalization of trade, including plurilateral trade in electronic commerce, said people familiar with the deliberations.

More disturbingly, at the insistence of major industrialized countries, the G20 leaders failed to include any reference to the rules-based multilateral trading system, which was in the confidential revised third draft, said sources, who asked not to be quoted.

At a time when the coalition of civil society organizations have strongly opposed the use of patent rights by the US pharmaceutical company Gilead Sciences over its drug remdesivir (development code GS-5734) for combating COVID-19, several G20 trade ministers from India, South Africa, and Indonesia among others called for adopting a strong humanitarian approach and not to insist on patent rights, and waiving of TRIPS provisions, to ensure that existing and new patented drugs are made available at affordable prices.

They highlighted the role that generic drug manufacturers can play through mass production for addressing the global demand for medicines to combat COVID-19, said people familiar with the deliberations.

The extraordinary virtual meeting of G20 trade ministers was attended by the WHO Director-General Dr Tedros Adhanom Ghebreyesus and other heads of the United Nations bodies, including the UNCTAD Secretary-General Dr Mukhisa Kituyi among others.

Incidentally, Dr Tedros and his officials have so far not revealed which drug or combination of drugs are being promoted for clinical trials in Norway and Spain.

According to news reports, Gilead’s remdesvir is being promoted by the WHO for combating the COVID-19 disease.

The G20, currently under the presidency of Saudi Arabia, includes the United States, Argentina, Brazil, Mexico, Canada, Germany, France, the United Kingdom, China, India, Indonesia, South Korea, Australia, Italy, Japan, Turkey, and the European Union.

More pertinently, on 30 March, UNCTAD’s updated Trade and Development Report called for a $2.5 trillion stimulus package of aid for developing and the poorest countries through international financial bodies such as the International Monetary Fund.

But the G20 trade ministers paid inadequate attention to the magnitude of the problems faced by developing and poorest countries on the health and economic fronts, said a person, who followed the proceedings.

After the G20 leaders’ meeting on 26 March, the final statement issued by the G20 trade ministers claimed that “now more than ever is the time for the international community to step up cooperation and coordination to protect human life and lay the foundations for a strong economic recovery and a sustainable, balanced, and inclusive growth after this crisis.”

The trade ministers of the G20 said ambivalently that they “are actively working to ensure the continued flow of vital medical supplies and equipment, critical agricultural products, and other essential goods and services across borders, for supporting the health of our citizens.”

They insisted that “consistent with national requirements, we will take immediate necessary measures to facilitate trade in those essential goods”, and that they “will support the availability and accessibility of essential medical supplies and pharmaceuticals at affordable prices, on an equitable basis, where they are most needed, and as quickly as possible, including by encouraging additional production through incentives and targeted investment, according to national circumstances.”

The trade ministers of the G20 coalition said that they “will guard against profiteering and unjustified price increases,” without specifying how this would be done.

They expressed concern “about the impact of COVID-19 on vulnerable developing and least developed countries, and notably in Africa and small island states,” while ignoring demands from several participants about the need to agree on a developmental package, said people familiar with the proceedings of the meeting.

While expressing concern “about the daunting challenges facing workers and businesses, particularly the most vulnerable ones,” the G20 trade ministers did not indicate a concrete package of measures.

However, the G20 ministers emphasized that they “will ensure our collective response is supportive of micro, small and medium-sized enterprises, and recognize the importance of strengthening international investment” – which is hardly the need of the hour, said people familiar with the meeting.

The G20 trade ministers said they “agree that emergency measures designed to tackle COVID-19, if deemed necessary, must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules.”

They insisted that they “will implement those measures upholding the principle of international solidarity, considering the evolving needs of other countries for emergency supplies and humanitarian assistance,” but failed to address what solidarity-related humanitarian assistance they will undertake, said people who are familiar with the proceedings.

During their interventions at the virtual meeting, the United States Trade Representative (USTR) Ambassador Robert Lighthizer said “the United States has learned from the crisis that over-dependence on other countries as a source of cheap medical products and supplies has created a strategic vulnerability to our economy. For the United States, we are encouraging diversification of supply chains and seeking to promote more manufacturing at home.”

European Union Trade Commissioner Phil Hogan suggested that G20 members should use the opportunity to ensure that the global trading system is in a better place when the crisis is over by focusing on issues like WTO reforms.

Chinese Commerce Minister Zhong Shan told his G20 counterparts that they “should ensure stability in global industrial and supply chains by reducing or removing tariffs, eliminating barriers and facilitating unfettered trade, among others.”

However, the USTR disagreed with China’s proposal, saying that “we stay focused on this crisis and not try to use it to push other agendas, either in trade or other areas.”

“This will only seed distrust and lead all of us to setbacks in our objectives in the long run. Let us not make long-term decisions in the midst of a crisis,” the USTR said.

Interestingly, there was no mention in the final statement of WTO reforms or tariff relief for countries hit by the unilateral US trade measures.

Trade ministers from India, South Africa, and Indonesia among others called for a package of developmental measures as well as waivers from crucial TRIPS-related provisions so as to ensure that drugs for COVID-19 are made accessible at affordable prices.

At the insistence of major developed countries, including the US and the European Union, the G20 trade ministers emphasized “the importance of transparency in the current environment and our commitment to notify the WTO of any trade related measures taken, all of which will enable global supply chains to continue to function in this crisis, while expediting the recovery that will follow,” said people familiar with the meeting.

Instead of providing concrete health-related package for fighting the COVID-19 pandemic, the G20 leaders said they “will continue to work together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.”

The G20 trade ministers said they will ensure “smooth and continued operation of the logistics networks that serve as the backbone of global supply chains,” suggesting that they “will explore ways for logistics networks via air, sea and land freight to remain open, as well as ways to facilitate essential movement of health personnel and business people across borders, without undermining the efforts to prevent the spread of the virus.”

The trade ministers said they will continue “monitoring and assessing the impact of the pandemic on trade. We call on the international organizations to provide an in-depth analysis of the impact of COVID-19 on world trade, investment and global value chains. We will continue working with them to establish coordinated approaches and collect and share good practices to facilitate flows of essential goods and services.”

Surprisingly, the European Union pushed hard for the plurilateral Joint Statement Initiative group’s electronic commerce agenda and to maintain open markets, even as Brussels is not able to push back against trade- restrictive measures adopted by some of its members.

Ironically, Italy is supposed to take over the G20 presidency from Saudi Arabia next year. It remains to be seen whether a financially-broke Rome could hold next year’s G20 meeting, if Germany, the Netherlands, and Finland refuse to provide financial assistance through the COVID-19 bonds.

Indeed, the G20 trade ministers’ meeting has proved to be a pointless exercise and is only for optics without any substance, said a person, who asked not to be quoted.

The full text of the G20 statement on Trade and Investment is as follows:

“We, the Trade and Investment Ministers of the G20 and guest countries, are profoundly saddened by the devastating human tragedy caused by the spread of COVID-19. The pandemic is a global challenge and requires a coordinated global response. The G20 Leaders, following their Extraordinary Meeting conducted on 26 March 2020, committed “to presenting a united front against this common threat.”

Now more than ever is the time for the international community to step up cooperation and coordination to protect human life and lay the foundations for a strong economic recovery and a sustainable, balanced, and inclusive growth after this crisis.

We have started monitoring and assessing the impact of the pandemic on trade as per the task entrusted to us by our Leaders.

We are actively working to ensure the continued flow of vital medical supplies and equipment, critical agricultural products, and other essential goods and services across borders, for supporting the health of our citizens. Consistent with national requirements, we will take immediate necessary measures to facilitate trade in those essential goods. We will support the availability and accessibility of essential medical supplies and pharmaceuticals at affordable prices, on an equitable basis, where they are most needed, and as quickly as possible, including by encouraging additional production through incentives and targeted investment, according to national circumstances. We will guard against profiteering and unjustified price increases.

We are concerned about the impact of COVID-19 on vulnerable developing and least developed countries, and notably in Africa and small island states. We are also concerned about the daunting challenges facing workers and businesses, particularly the most vulnerable ones. We will ensure our collective response is supportive of micro, small and medium-sized enterprises, and recognize the importance of strengthening international investment.

We agree that emergency measures designed to tackle COVID-19, if deemed necessary, must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules. We will implement those measures upholding the principle of international solidarity, considering the evolving needs of other countries for emergency supplies and humanitarian assistance. We emphasize the importance of transparency in the current environment and our commitment to notify the WTO of any trade related measures taken, all of which will enable global supply chains to continue to function in this crisis, while expediting the recovery that will follow.

As we fight the pandemic both individually and collectively and seek to mitigate its impacts on international trade and investment, we will continue to work together to deliver a free, fair, non-discriminatory, transparent, predictable and stable trade and investment environment, and to keep our markets open.

We will ensure smooth and continued operation of the logistics networks that serve as the backbone of global supply chains. We will explore ways for logistics networks via air, sea and land freight to remain open, as well as ways to facilitate essential movement of health personnel and business people across borders, without undermining the efforts to prevent the spread of the virus.

We will continue monitoring and assessing the impact of the pandemic on trade. We call on the international organizations to provide an in-depth analysis of the impact of COVID-19 on world trade, investment and global value chains.

We will continue working with them to establish coordinated approaches and collect and share good practices to facilitate flows of essential goods and services.

We will convene again as necessary, and we task the G20 Trade and Investment Working Group to address these issues closely and to identify additional proposed actions that could help alleviate the wide-range impact of COVID-19, as well as longer-term actions that should be taken to support the multilateral trading system and expedite economic recovery.

The next Italian G20 2021 Presidency is committed to continue paying the highest attention to the international trade climate in the discussion of long-term actions.”

 


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