TWN Info Service on Health Issues (Jun20/01)
4 June 2020
Third World Network

South sets out developmental priorities in face of COVID-19
Published in SUNS #9130 dated 3 June 2020

Geneva, 2 Jun (D. Ravi Kanth) – Many developing countries including India, Indonesia, South Africa, and the coordinators of the African Group and the African, Caribbean, and Pacific (ACP) group have set out at the World Trade Organization their developmental priorities in the face of the worsening COVID-19 pandemic, trade envoys told the SUNS.

At a virtual meeting of the WTO’s General Council (GC) on 29 May, these countries reiterated that the COVID- 19 pandemic cannot be used as an opportunity to force permanent trade liberalization measures on members.

Members of the so-called “Friends of the System” – Switzerland, Korea, Australia, New Zealand, Singapore and Chile among others – had proposed a range of liberalizing measures resulting in binding commitments, said trade envoys.

Significantly, the United States and China did not speak during the virtual GC meeting, trade envoys said.

The virtual GC meeting experienced several technical glitches making it difficult for members to make their interventions, trade envoys told the SUNS.

Although it was supposed to be a regular GC meeting, no decisions were taken since it was conducted on a virtual platform.

The next regular GC meeting will be held on 22 July where decisions on the date and venue for the WTO’s 12th ministerial conference (MC12) and other items like a roadmap for the fisheries subsidies negotiations to be completed by the end of the year, may be decided, trade envoys said.

The agenda for the virtual GC meeting on 29 May covered several items such as: (1) report by the director- general and chairman of the Doha Trade Negotiations Committee (TNC), Roberto Azevedo; (2) implementation of the Bali, Nairobi and Buenos Aires outcomes; (3) work programme on small and vulnerable economies; (4) the WTO’s 12th ministerial conference; (5) process of appointment of the next director-general; and (6) joint ministerial statement by Korea to facilitate trade in goods and services as well as essential items.

In his report to members, TNC chair Azevedo told members that the chair of the Doha rules negotiations, Ambassador Santiago Wills from Colombia, who is conducting the fisheries subsidies negotiations, had informed him on 7 May that “as a whole, the Group is not ready to fully engage while still facing the difficulties arising from the pandemic, and that the best course at the moment is to wait a short while longer to see how the situation develops.”

According to Azevedo, the Doha rules chair “is continuing to monitor the situation.”

Ambassador Wills had also informed Azevedo that “he remains mindful of the urgency of the negotiations, and of the mandate to agree to new disciplines on fisheries subsidies by the end of the year.”

On the Doha agriculture negotiations, Azevedo said “among negotiating topics considered to be directly related to food security, export restrictions, public stockholding, and domestic support got the most attention. References were also made to the special safeguard mechanism, Market Access and Cotton.”

According to Azevedo, “several members highlighted the particular importance of transparency right now, calling for all COVID-19 related trade measures to be targeted, proportionate, transparent, and temporary.”

On special and differential treatment (S&DT), Azevedo said that the chair of the Doha trade and development negotiating body, Ambassador Kadra Ahmed Hassan from Djibouti, “has initiated a written process to allow a preliminary exchange of views on the G90 submission.”

Azevedo said that “the G90 group of 90 countries has asked for some more time to provide its responses. Once they are received, the Chair will be in touch with Members to determine the way forward.”

Azevedo also gave an account of the meetings he had held with global businessmen and world leaders to discuss trade-related measures to be adopted during the COVID-19 pandemic.

On the second agenda item, the GC chair, Ambassador David Walker from New Zealand, presented his report on the implementation of the Bali, Nairobi, and Buenos Aires decisions.

SHARPLY DIFFERING VIEWS ON DG’S REPORT

In their interventions, several members took the floor to indicate their priorities as well as concerns.

Uruguay, on behalf of the proponents of the Joint Statement Initiative (JSI) group on plurilateral disciplines for MSMEs (micro, small and medium enterprises), gave a report on the recent webinar meetings.

Uruguay said that the group will convene a meeting on 21 July to discuss major issues in the MSME negotiating agenda.

Australia, which is one of the coordinators of the JSI on electronic commerce along with Japan and Singapore, said the group will discuss emerging trade issues on 11 June.

Brazil, the European Union, India, Indonesia, South Africa, and several other developed and developing countries highlighted their priorities, said participants.

Brazil called for a work program for the MC12 meeting that would include agriculture, particularly trade- distorting domestic subsidies, plurilateral JSI agreements on electronic commerce, investment facilitation, and domestic regulation.

The EU said its priorities include fisheries subsidies negotiations and the Joint Statement group initiatives for proposed plurilateral agreements including on electronic commerce and investment facilitation.

Several other industrialized countries such as Canada and Australia also shared these goals for MC12.

India’s trade envoy Ambassador J S Deepak said that “as many parts of the world continue to witness continued growth in Covid-19 infections and deaths, the primary focus of our governments is to ensure the health and safety of our citizens.”

“The exigencies of the current crisis leave us with little bandwidth for negotiations,” Ambassador Deepak said, adding that “several members have underlined the need to re-calibrate their priorities and positions at the WTO to contain the economic and social fallout of the crisis.”

Therefore, the current situation “makes negotiations in a business-as-usual format difficult,” the outgoing Indian envoy argued.

“The need of the hour is to use this crisis as an opportunity to build a more inclusive, balanced and resilient multilateral trading system,” Ambassador Deepak emphasized.

The Indian envoy outlined five major priorities for India at the WTO.

They include:

1. The resolution of the Appellate Body impasse.

2. A more effective and lasting way to ensure the food security of the most vulnerable and eliminate the historic asymmetries in AMS entitlements in the Agreement on Agriculture.

3. The urgent need to build the digital capacities of developing countries and LDCs in areas like digital skills and broadband infrastructure so that the benefits of the e-commerce applications like e-education, tele-medicine, electronic payments and use of digital platforms for sourcing goods and services are available to everyone including developing countries and LDCs. The requirement of new sources of revenue for developing countries including LDCs has also underlined the need for ending the e-commerce moratorium on imposing customs duties on electronic-transmissions.

4. The completion of negotiations on disciplines on fisheries subsidies with appropriate special and differential treatment for developing countries including LDCs to protect their small and subsistence fishermen.

5. Enable the effective use of TRIPS flexibilities to ensure access to essential medicines, treatments and vaccines to all at affordable prices, especially in the context of the Covid-19 pandemic.

In his farewell statement, Ambassador Deepak said “during the last 3 years, the WTO has faced some of the most challenging times.”

“The paralysis of the WTO and its consequential ineffectiveness is not any longer a theoretical possibility; it may turn into a tragic reality. We have, together, to ensure that this does not happen!” he warned.

India said it “has always valued the multilateral trading system embodied by the WTO, not because it has given us special advantages but for its many achievements.”

According to Ambassador Deepak, “the WTO has kept markets open, till recently prevented trade wars, contributed to global growth bringing hundreds of millions out of poverty and served as a global public good. Even more importantly, it has huge potential of ushering in economic growth especially for people in the shadows of life and for countries on the margins of development.”

“Therefore, it will be a sad day indeed, and a lost opportunity, if it fails to deliver on this promise,” he emphasized.

In his intervention, Indonesia’s trade envoy Ambassador Syamsul Bahri Siregar said the developing countries are among the worst-hit by the Covid-19 pandemic, stretching their health systems to the very maximum limits.

Ambassador Siregar said while trade should remain open in these challenging times, any flexibilities exercised by governments in line with WTO agreements must be respected.

The Indonesian envoy called for the restoration of the Appellate Body and resolution of mandated issues in agriculture, particularly the permanent solution for public stockholding programs and the special safeguard mechanism.

During her intervention, South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter said the Covid-19 health and economic crisis is felt immediately and most severely by developing countries.

Developing countries, according to Ambassador Xolelwa, suffered multiple crises – i.e. capital flight to significant decline in export and remittance earnings, tourism revenues and foreign exchange – because of the COVID-19 pandemic.

“It is therefore not the time for rule-making and negotiations should be kept in abeyance to enable Members to respond to the (Covid-19) crises,” the South African trade envoy emphasized.

The grim situation arising from Covid-19 calls for “a reflection on the role of the MTS (multilateral trading system) in promoting economic recovery,” she argued.

“Negotiations and negotiating positions will need to be re-calibrated so as to promote resilience in national economies which is essential for building resilience in the global economy,” the South African envoy said.

According to Ambassador Xolelwa, the Covid-19 has underscored the need for the following responses:

* Peace clause for all the Government measures implemented in the context of COVID-19.

* Strengthening S&DT provisions – COVID-19 has highlighted the critical importance of the G90 proposals in promoting public health, accelerate industrialization, upgrade and modernize manufacturing, promote technology transfer and close the digital divide to promote an inclusive digital economy.

“The G90 thanks the Members for their responses and is preparing a response in this regard. We reiterate that meaningful progress in the work of the CTD-SS is critical in achieving the SDGs and to promote resilience and economic recovery in the context of COVID-19.”

* Preserving multilateral nature of the WTO so as to promote global cooperation rather than plurilaterals that fragment the MTS.

* Preserving policy tools to promote economic recovery.

* Policy flexibility with a view to promote re-balancing between global rules and national economic development imperatives.

* Rules that support production-led growth, jobs and structural transformation.

* Addressing distortions in agriculture trade and promote food security.

* Rules on fisheries subsidies that do not constrain the ability of Members to promote sustainable fishing, food security and economic development.

* Review of the moratorium on e-commerce especially in the context of fiscal constraints to implement response measures and economic recovery plans.

* Removing the threat presented by the TRIPS NVC (non-violation complaints) to effective implementation of the TRIPS flexibilities by agreeing that NVC claims are not applicable under the TRIPS Agreement.

On behalf of the ACP (African, Caribbean, and Pacific) group, Jamaica said that “flexibility, cooperation and diplomacy among the WTO’s membership to address issues” is needed due to the Covid-19 crisis.

“This is particularly important for our negotiating mandate on fisheries subsidies, agriculture, services and special and differential treatment,” Jamaica said, emphasizing that members must be “mindful of the pace at and manner in which we proceed in these unforeseen circumstances.”

The ACP group called for an “inclusive and transparent” approach, arguing that “COVID-19 does not issue a license to ignore WTO rules”.

The Covid-19 pandemic has also brought to the fore inequalities among and within countries, highlighting the need for “special and differential treatment (S&DT) for developing and least-developed countries.”

The ACP group coordinator said S&DT remains “an integral part of the architecture of the multilateral trading system and the importance of many of the issues contained in the G90 proposals.”

The ACP Group urged WTO members “to earnestly look at these proposals in light of COVID-19.”

The biggest coalition of developing and least-developed countries at the WTO reiterated their “commitment to an inclusive, transparent and rules-based multilateral trading system with the WTO as its core institution.”

“The WTO must cater for all its members, especially the most vulnerable among us, to ensure that in our collective effort, no one is left behind,” Jamaica said on behalf of the ACP group.

Commenting on the DG’s meetings with global businessmen and leaders, Bangladesh reminded Azevedo that the country suffered huge losses worth billions of dollars due to cancellation of orders placed with suppliers to global brands.

Bangladesh urged Azevedo to address this issue during his meetings with global businessmen.

MC12 VENUE AND DATE

During the discussion on the venue and date for the WTO’s 12th ministerial conference (MC12), the GC chair, Ambassador David Walker from New Zealand, spoke about his consultations with members and Kazakhstan, which has agreed to host MC12 in Nur Sultan in June 2021.

Several members thanked Kazakhstan for convening the MC12 meeting next year. There is a general agreement among members on the venue for the MC12 – i.e., Nur Sultan, the capital of Kazakhstan.

However, there were mixed views on finalizing the date of the conference at this juncture when the current environment is marked by uncertainty.

Botswana, on behalf of the African Group, said while the group welcomes Kazakhstan for convening the MC12 in June 2021, “we would like to caution against making a hasty determination on the timing for MC12 at this stage, in view of the evolving COVID-19 crisis and the uncertainty it presents.”

South Africa’s trade envoy Ambassador Xolelwa Mlumbi-Peter said it is “premature to set the date for MC12 and the General Council will need to continue to monitor developments.”

The GC chair informed members that he would hold further consultations on the venue and date, adding that a decision will be taken at the regular General Council meeting on 22-23 July.

DG SELECTION PROCESS

On the selection of a new director-general to replace Azevedo, who demits office on 31 August, the European Union, Canada, and several other countries concurred with the GC chair for launching an expedited process.

The African Group argued that “whatever timelines are adopted, the process must be both transparent and inclusive of the participation of all members.”

South Africa said the selection process “must be fair, inclusive, transparent, allow for the participation, and allow for the fair engagement with the candidates, including an equal opportunity for the candidates to share their vision with Members.”

KOREA’S MINISTERIAL STATEMENT

Korea along with Australia, Canada, New Zealand, Singapore, and Chile issued a joint ministerial statement on action plans to facilitate the flow of goods and services as well as essential movement of people.

According to Korea, the proposed actions include: (1) ensure the flow of goods in global supply chains; (2) facilitate the essential movement of people; and (3) minimize the negative impacts on trade and investment arising from the pandemic to facilitate an inclusive and sustainable economic recovery.

Several countries, particularly the European Union, Canada, Australia, New Zealand, and Singapore among others supported the Korean initiative.

In a sharp response to the Korean initiative, India said it agreed with other members that emergency measures taken in the wake of the pandemic should be “targeted, proportionate, transparent, and temporary”.

India reiterated that “temporary reductions of customs duties on essential medical and agricultural products are well within the rights of a WTO Member”.

“Therefore, we do not support permanent tariff liberalization as a response to a temporary crisis,” Ambassador Deepak said.

India called for greater clarity from the signatories of the Korean initiative on “the establishment of a consultation mechanism between the relevant authorities of the signatory countries to identify and address trade disruptions that affect the trade in essential goods”.

India said “essential cross-border travel during the time of a global pandemic must obviously include the cross- border movement of medical professionals.”

“We are surprised to see that the signatories of the joint statement did not include this critical category of doctors and nurses in their recommendations on the essential movement of people, and recommend that they consider adding it to make the statement fit for purpose,” India said.

In response to the Korean initiative, South Africa’s trade envoy Ambassador Xolelwa said that “the current environment is marked by great uncertainty.”

“No one is certain about the duration of the pandemic or how it will evolve across different countries and regions,” she said, suggesting that “South Africa and the African Continent has not yet reached the peak of the pandemic.”

Consequently, the Covid-19 crises necessitates “that the responses are tailored to respond to the specific circumstances that are facing Members using the policy tools and exceptions available in WTO covered agreements, including export restrictions where warranted,” South Africa said.

With different countries having vastly different capabilities to address the Covid-19 impact, the “one-size-fits-all solutions will not work,” Ambassador Xolelwa said.

The WTO, according to the South African trade envoy, “must contribute in facilitating an inclusive and sustainable economic recovery.”

More importantly, the COVID-19 pandemic has demonstrated “our shared fate as human beings and why inclusive growth and development should be at the heart of the work of the WTO,” South Africa said.

For promoting “economic resilience, the multilateral rules must facilitate industrial development, diversification and structural transformation which is key in putting our economies on a sustainable development path,” Ambassador Xolelwa said.

“Trade cannot be an end in itself,” she argued, emphasizing that WTO members “need to come up with a developmental agenda that ensures that trade raises standards of living, ensure full employment, grow real income and effective demand and expand the production of trade in goods and services.”

“This will ensure that we deliver on the objectives of the WTO as set out in the Marrakesh Agreement,” Ambassador Xolelwa argued.

Switzerland, on behalf of more than 50 countries, also issued a strong statement on concrete actions aimed “at facilitating cross-border flows of vital medical supplies and other essential goods and services, including through the application of best practices and simplified procedures and through further trade opening.”

Switzerland stressed the “necessity of maintaining agriculture supply chains and preserving Members’ food security.”

“We, therefore, pledge to not impose export restrictions and to refrain from implementing unjustified trade barriers on agricultural and food products in response to the COVID-19 pandemic.”

In conclusion, the GC meeting, which largely discussed process-related issues and priorities of different members in the coming days and months, reveals that the developed countries and their allies in the developing world seem determined to push for an aggressive trade liberalization agenda to transform the WTO at MC12, trade envoys told the SUNS.