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TWN Info Service on Health Issues (Feb21/01)
2 February 2021
Third World Network


Several Ministers bring TRIPS waiver to center stage at ministerial meet
Published in SUNS #9276 dated 2 February 2021

Geneva, 1 Feb (D. Ravi Kanth) – The trade ministers of India, Indonesia, South Africa, and Mauritius, on behalf of the African Group, have brought to the center stage the proposed TRIPS waiver for combating the COVID-19 pandemic, at an informal trade ministerial meeting on 29 January.

The four developing countries called for an urgent outcome on the TRIPS waiver for suspending several provisions in the WTO’s TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information so as to fight the ravaging COVID-19 pandemic.

Amidst the worsening “vaccines wars” launched by the European Union and the United States, which have placed restrictions on the export of supplies of vaccines produced by AstraZeneca, Pfizer, and Moderna, as well as the call by the EU, Canada, Japan, Australia, and New Zealand among others of the Ottawa Group for further trade liberalization in trade and health-related products, the TRIPS waiver seems more credible and perhaps the best choice for the WTO members to act on immediately, said several participants, who asked not to be quoted.

Trade ministers from India, Indonesia, South Africa, the African Group, and the ACP (Africa, Caribbean, and Pacific) group also underscored the urgent need for outcomes on the permanent solution for public stockholding programs for food security (PSH) and the special safeguard mechanism (SSM) for developing countries, participants said.

At the virtual informal trade ministerial meeting hosted by Switzerland on 29 January, trade ministers from 29 countries, including the United States, issued somewhat conflicting narratives on what needs to be accomplished at the World Trade Organization in 2021.

They agreed on the need to urgently appoint a new director-general, decide on the date and venue for the WTO’s 12th ministerial conference (MC12) and conclude the fisheries subsidies negotiations as per the United Nations Sustainable Development Goal (SDG) 14.6.

Barring the United States, 28 participating countries called for the urgent restoration of the Appellate Body (AB) to ensure that the two-stage dispute settlement system remains operational.

New Zealand’s trade minister Mr Damien O’Connor cautioned that there is little value in negotiating new trade agreements without a functional dispute settlement system, participants said.

The Swiss President and head of federal economic affairs, Mr Guy Parmelin, who chaired the meeting, highlighted Switzerland’s priorities to be accomplished at the WTO during the next 11 months, amidst the COVID-19 pandemic.

The countries that took part in the two-hour meeting included Argentina, Australia, Brazil, Canada, Chad on behalf of the least-developed countries, Chile, China, Egypt, the European Union, India, Indonesia, Jamaica on behalf of the ACP group of countries, Japan, Kazakhstan, Kenya, Korea, Mauritius, Mexico, New Zealand, Norway, the Russian Federation, Saudi Arabia, Singapore, South Africa, Switzerland, Thailand, Turkey, United Kingdom, and the United States.

In addition to these countries, the WTO’s General Council (GC) chair Ambassador David Walker from New Zealand, the chair of the fisheries subsidies negotiations, Ambassador Santiago Wills from Colombia, and the WTO deputy director-general Alan Wolff spoke about the ongoing work at the WTO.

Apparently, several countries such as Pakistan and Nigeria among others, which had taken part in previous informal ministerial meetings hosted by Switzerland, were inexplicably left out this year, said participants familiar with the development.

At the meeting on 29 January, the trade ministers highlighted their respective priorities. They include:

(1) appointment of the new director-general and the finalization of the date and venue for the WTO’s 12th ministerial conference;

(2) the restoration of the two-stage dispute settlement system that remains dysfunctional due to the continued US opposition to filling the seven vacancies at the Appellate Body;

(3) the conclusion of the fisheries subsidies agreement on a fair and balanced framework that would stop industrial-scale fishing;

(4) the finalization of the much-delayed outcomes on the permanent solution for public stockholding programs for food security, the special safeguard mechanism, as well as the need to address trade-distorting domestic subsidies;

(5) the proposed reforms for modernizing the WTO;

(6) the informal, non-mandated plurilateral Joint Statement Initiatives (JSIs);

(7) the Ottawa Group’s plurilateral initiatives on trade and health and trade and environment, including New Zealand’s demand for the elimination of Fossil Fuel Subsidies, and the EU’s proposal for green goods;

(8) the TRIPS waiver to suspend the provisions concerning copyrights, industrial designs, patents, and protection of undisclosed information; and

(9) the need to address new disciplines for industrial subsidies among others.

APPOINTMENT OF NEW DIRECTOR-GENERAL

Almost all countries, including the United States, emphasized the importance of appointing the new director- general for accelerating work and accomplishing results by MC12.

At the meeting, the GC chair Ambassador Walker said that he is currently holding important consultations with members about the appointment of the new director-general.

In his final report on the selection process in early November last year, Ambassador Walker had communicated that Nigeria’s former finance minister Ms Ngozi Okonjo-Iweala secured maximum support among members, and the selection panel recommended her appointment as the new director-general.

The former US Trade Representative Ambassador Robert Lighthizer blocked the appointment of Ms Okonjo- Iweala on grounds that she did not have any trade background, and instead recommended the losing Korean candidate Ms Yoo Myung-hee for the WTO’s top job.

With the recent change of the administration in Washington, now led by President Joe Biden, the Nigerian candidate’s chances of being appointed as the new director-general have substantially brightened, said participants familiar with these developments.

At the virtual meeting, the US official Mr David Bisbee highlighted the Biden Administration’s priorities to accomplish ambitious outcomes on several issues and the challenges at MC12, and that “critical to this effort is the selection of the new director-general.”

The US official said that the selection of the new director-general and “other critical initiatives are under active consideration in Washington”, participants said.

At the meeting, Korea’s trade minister Ms Yoo Myung-hee suggested that “the WTO members need to engage in sincere consultations to reach a consensus” on the selection of the new director-general (DG).

Several participants at the meeting mentioned Ms Okonjo-Iweala by name, and emphasized that her appointment as the new DG must be concluded without any further delay, participants said.

Ambassador Walker may convene a special General Council meeting this month to conclude the appointment of the new DG, said a participant, who asked not to be quoted.

RESTORATION OF THE APPELLATE BODY

All participants at the virtual meeting, except the US, underscored the urgent need in restoring the Appellate Body for ensuring the two-stage dispute settlement system remains functional, without which the WTO can no longer claim that its “enforcement” function to oversee the implementation of existing and future trade agreements is functional, the participant said.

But the US remained conspicuously silent on this issue of restoring the Appellate Body to allow the functioning of the two-stage dispute settlement system, which does not seem to figure among the Biden administration’s major trade priorities.

The US silence reflects a certain continuity in ensuring a weak dispute settlement system without allowing a fully functional highest adjudicating body to operate, the participant suggested.

The US may seek a payment for allowing the Appellate Body to be restored, said another participant, who asked not to be quoted.

FISHERIES SUBSIDIES AGREEMENT

Ministers remained sharply divided on what the proposed fisheries subsidies agreement must accomplish in deciding on the new disciplines for removing harmful fisheries subsidies and for ensuring “effective and appropriate special and differential treatment.”

Trade ministers from New Zealand, Australia, Norway, Canada, Brazil, Argentina and the US representative among others called for an ambitious outcome in the fisheries subsidies negotiations on grounds of sustainability considerations, while limiting the scope of effective special and differential treatment, according to another participant, who asked not to be quoted.

They insisted that the fisheries subsidies agreement should not include many exemptions and exclusions, calling for targeted flexibilities to developing countries, according to participants who took part in the virtual meeting.

In sharp contrast, trade ministers from India, Indonesia, South Africa, Kenya, Jamaica on behalf of the ACP group, and Mauritius on behalf of the African Group, emphasized the need for robust special and differential treatment flexibilities for hundreds of millions of their fishermen, including the proposed carve-out from disciplines for artisanal fishermen.

The developing and least developed countries called for addressing the central problem underlying the depletion of global fish stocks through overcapacity and overfishing. They also underscored the need for curbing industrial-scale fishing.

The Indian trade minister Mr Piyush Goyal called for the application of the “polluter-pays” principle, while the new Indonesian trade minister Mr Muhammad Lutfi emphasized the need to stop industrial-scale fishing and provide enhanced flexibilities for artisanal and small-scale fishermen, participants said.

The ministers from developing countries called for ensuring effective special and differential treatment (S&DT) in the fisheries subsidies agreement as well as the existing S&DT in all agreements at the WTO, according to people familiar with the development.

PROPOSED WTO REFORMS

Trade ministers expressed differing views on the proposed reforms at the WTO, with trade ministers from the industrialized countries in the newly-formed Ottawa Group such as the EU, Canada, Australia, Japan, New Zealand, and Norway among others seeking major changes in transparency and notification requirements among others.

India’s trade minister Mr Goyal said that he is pained to see that trade ministers from developed countries never speak about addressing the concerns raised by the developing countries, participants said.

The Indian minister also called for addressing the imbalances and inequities of the Uruguay Round of trade negotiations, emphasizing that special and differential treatment needs to be effective, participants said.

All other trade ministers from developing countries – Indonesia, South Africa, Mauritius on behalf of the African Group, Jamaica on behalf of the ACP group, Egypt, and Kenya among others – called for strong special and differential treatment flexibilities, participants said.

South Africa’s senior trade official Mr Xavier Carim said that special and differential treatment must remain “an undiminished component of the architecture” due to the varying levels of capacity to contribute to reforms and differing levels of economic development, participants said.

In their interventions, Japan, the EU, and the US spoke about their agenda for new disciplines for curbing industrial subsidies.

The US priority for market-oriented reforms was critically commented on by several participants at the meeting, said people familiar with the proceedings at the meeting.

THE TRIPS WAIVER

At the informal ministerial meeting, four participants – India, Indonesia, South Africa, and Mauritius on behalf of the African Group – called for an urgent outcome on the TRIPS waiver.

The ministers of these developing countries said that the TRIPS waiver offers the best global approach to ramp up production of therapeutics and vaccines.

“At the outset,” said India’s trade minister Mr Goyal, “I would like to mention the proposal (of the TRIPS waiver) put forward by South Africa and India to help the entire world in the fight against COVID-19 pandemic and to save the precious lives.”

“We are grateful to members who supported the proposal,” he said.

Without naming the EU, Canada, Australia, New Zealand, and other members of the Ottawa Group who are promoting the trade and health initiative that seeks to bring about trade liberalization through tariff reductions, the Indian minister said that “he regrets that all are not looking at the wider benefits (of the TRIPS waiver) to mankind.”

“It is in the critical times like now, we need to demonstrate our collective commitment to less privileged people and countries,” Mr Goyal said, highlighting India’s support in sending vaccines to 150 countries.

Indonesia’s trade minister Mr Lutfi said that members must agree on the waiver for addressing the COVID-19 pandemic, while Mauritius, on behalf of the African Group, called for “constructive” conclusion on the TRIPS waiver.

South Africa’s senior trade official Mr Carim said that “we agree that the response to current challenges cannot be business-as-usual approach.”

The “pandemic has highlighted profound shortcomings,” the South African official said, criticizing countries for pushing trade liberalization and new trade rules for every challenge faced by members.

“That approach in large measure has been responsible for many of the imbalances in global trade we confront today, including the over-dependence on the fragile global value chains,” Mr Carim argued.

“A valuable contribution and starting point for the global economic recovery would be the TRIPS waiver that would allow a greater number of countries to ramp up production of therapeutics and vaccines to address the pandemic,” Mr Carim said.

New Zealand was the only industrialized country to mention the TRIPS waiver, suggesting that there is a need to engage on the scope of the waiver proposal, while supporting the Ottawa Group initiative on trade and health.

China supported the trade and health initiative as well as the COVAX facility being implemented by the World Health Organization and the Geneva-based GAVI (The Vaccine Alliance).

TRADE AND HEALTH INITIATIVE

The Ottawa Group of countries led by Canada, the EU, Japan, Australia New Zealand, and Norway called for further trade liberalization as part of the trade and health initiative, including the removal of trade restrictions on the supply-chains for the supply of health-related products.

Significantly, on 29 January when the meeting was taking place, the European Union imposed a major restriction to stop vaccines crossing freely from the EU to other countries, exposing Brussels’ controversial trade and health initiative along with other Ottawa Group of countries, said a participant, who asked not to be quoted.

TRADE AND ENVIRONMENTAL GOODS INITIATIVE

The EU along with other members of the Ottawa Group called for focused consultations on trade and environmental goods and services. The EU also spoke about the green goods initiative which will involve tariff liberalization.

THE JOINT STATEMENT INITIATIVES

Almost all members of the Ottawa Group called for significant outcomes in the plurilateral Joint Statement Initiatives (JSIs) such as a digital agreement, investment facilitation, and government procurement. Japan called for removing restrictions on data flows, while Canada emphasized on trade and gender.

CHAIR’S CONCLUDING REMARKS

In his concluding remarks at the end of the meeting, the chair, Mr Parmelin, said that “ministers stressed the urgency of the swift appointment of a new WTO Director-General as well as the confirmation of the date and venue of the 12th Ministerial Conference (MC12).”

Mr Parmelin said ministers “reiterated their determination to maintain a credible multilateral trading system and to restore a climate of mutual trust.”

The Swiss host said “ministers expressed their concerns about the enormous social and economic impact of the COVID-19 crisis. They highlighted the relevance of trade and the role of the WTO in containing the pandemic and promoting recovery. Many Ministers underlined the importance of ensuring the development of as well as an equitable and affordable access to medical goods, including vaccines. They addressed ways and means to achieve these goals, including the implementation of measures facilitating trade, the role of intellectual property and transparency.”

He said “ministers regretted that the negotiations on fisheries subsidies could not be completed in accordance with the end-2020 deadline foreseen in SDG 14.6. In light of the significance of this process for the sustainability of global fisheries, Ministers concurred that a comprehensive and effective agreement on fisheries subsidies should be concluded as soon as possible.”

On the two-stage dispute settlement system, Mr Parmelin said that “ministers highlighted the importance of restoring a fully functional WTO dispute settlement system, which is a key pillar of the rules-based multilateral trading system.”

He said “many participants argued for further progress in agricultural trade policy reform at MC12 and asked for an outcome on domestic support and other issues. The issues of public stockholding and the special safeguard mechanism were highlighted by several Ministers.”

On the Joint Statement Initiatives, he said that “many ministers called for tangible outcomes, by MC12, on the Joint Statement Initiatives. Inter alia finalizing the process on Services Domestic Regulation and making substantial progress on E-commerce and Investment Facilitation as well as on Trade and Women’s Economic Empowerment.”

The chair said that “the need to reform the WTO was widely acknowledged. A number of Ministers insisted on advancing diverse issues related to the special and differential treatment of developing and least developed countries. Some participants proposed to adjust WTO rules to present-day economic and competitive conditions.”

 


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