MC12 and the WTO’s pandemic response

Along with the TRIPS Decision, MC12 also adopted a declaration on the WTO’s pandemic response. This declaration, notes Kinda Mohamadieh, often accords less emphasis to developing countries’ interests in favour of elements that could potentially impede their very capacity to deal with pandemic situations.

---

ONE main element of the declared ‘success’ at MC12 pertains to the WTO response to the COVID-19 pandemic. MC12 resulted in the Ministerial Declaration on the WTO Response to the COVID-19 Pandemic and Preparedness for Future Pandemics,¹ as well as the Ministerial Decision on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement).²  This article focuses on the former. (For more on the latter, see the article  ‘TRIPS Decision comes up short’ in this issue.)

The Ministerial Declaration is a soft-law instrument that tackles a multitude of issues including the role of the multilateral trading system in times of pandemics, stability and predictability of the trading environment, transparency and notification of ‘trade-related measures with respect to COVID-19 and future pandemics’, disciplines on ‘any emergency trade measures designed to tackle COVID-19’, the application of export restrictions on vaccines, therapeutics, diagnostics and other essential medical goods and their inputs, the importance of trade facilitation measures, regulatory cooperation and sharing of regulatory information on a voluntary basis, the role of services trade in regard to resilience during pandemics, along with issues pertaining to intellectual property and food security.

Background to the negotiations on the Declaration

In June 2021, the WTO General Council Chair unilaterally selected Ambassador David Walker of New Zealand to facilitate a series of negotiations supposedly focused on ensuring a WTO response to the COVID-19 pandemic. Consequently, this process came to be known as the ‘Walker process’. Ambassador Walker’s work, reflected in his reports to the WTO General Council, revolved around a premise that what is needed is more liberalisation, interventions that will further constrain regulatory space and policy tools available to WTO Members, and more reliance on the private sector.

From among the voices and proposals that Ambassador Walker had heard in his consultations, he chose to focus on pushing trade facilitation and regulatory coherence in a way that undermines developing countries’ flexibilities under the existing rules, promoting services liberalisation as one of the answers to the pandemic, limiting the ability to use export restrictions, pushing an expansive notification and monitoring regime that will further put pressure on developing countries in implementing their trade policies, and opening the door wider for the private sector’s influence on WTO processes. Many of these propositions were rooted in submissions by the Ottawa Group³  on trade and health issues. Issues raised by developing countries such as food security, economic resilience and intellectual property barriers were sidelined by Ambassador Walker, who also repeatedly refused to cover the issues pertaining to the TRIPS waiver.

The process at that point was clearly leaving most WTO Members in the dark and did not involve proper consultations or proper opportunities for Members to meaningfully engage in the negotiations. Ambassador Walker conducted discussions with a small group of WTO Members and produced multiple draft texts with almost no brackets (in WTO negotiations, brackets around text are meant to indicate there is still no agreement on that text) and proposed them as the basis for deliberations among a very small group of selected countries.

In October 2021, a group of developing countries including Pakistan, Egypt, Tunisia, South Africa, Sri Lanka, and Uganda came together and presented a submission (WTO document JOB/GC/278/Rev.1) that sought to capture a lot of the concerns of developing countries. The submission noted that developed countries can and have employed exceptional fiscal and monetary policies to manage the shock from the COVID-19 crisis and to cushion the economic and social impact in ways that developing countries and least developed countries (LDCs) could not. Developing countries and LDCs do not possess the tools that would allow them to respond and recover and maintain resilience to withstand a global crisis of such scale.

The submission also emphasised that the focus of the work under the ‘WTO response to the pandemic’ ought to shift from liberalisation and regulatory constraints to policy space and enablers of structural transformation and resilience building, including economic resilience and food security. It also stressed that any proposals considered under the WTO pandemic response should in no way constrain the policy tools and space that developing countries and LDCs need in order to respond to pandemics and similar crises, nor restrict tools and flexibilities available to them under the WTO agreements. The submission also emphasised that a waiver from certain provisions of the TRIPS Agreement is central to the WTO’s response to the COVID-19 pandemic. It also added that Members shall not directly or indirectly prevent or discourage another Member(s) from fully utilising the flexibilities of the TRIPS Agreement or in any way limit such flexibilities.

This collective submission of a number of developing countries, along with cooperation among this group and other developing countries actively participating in the process, such as India, was crucial to ensuring that the voices of developing countries and LDCs would be better heard in these negotiations.

The content of the Declaration on the WTO response to the pandemic

The way the adopted Declaration is worded often gives more emphasis to elements of interest to developed countries (such as ‘committing to’ transparency and notifications in paragraph 5), while lighter language is used in regard to issues of interest to developing countries and LDCs (such as simply ‘recognising’ food security challenges of developing countries and LDCs in paragraph 21).

Over the course of negotiating this Declaration in the run-up towards MC12 and during the preceding year of 2021, negotiators of developing countries and LDCs had succeeded in removing from the draft text several problematic elements that developed countries were asking for, such as language that could be restrictive of policy space or specifically burdensome on developing countries and LDCs in terms of implementation. Yet, the final Declaration does not offer much new of major value for developing countries and LDCs (such as in relation to addressing food security or intellectual-property-related barriers).

Developing countries had called for a recognition in the Declaration that trade rules should accommodate the policy space that is particularly important for developing countries and LDCs.⁴  This is because the COVID-induced crisis shed new light on the special needs of developing countries and LDCs, and the special considerations that developing countries and LDCs require under trade rules to allow for a multilateral trading regime that enables rather than hinders economic resilience and developmental progress in these countries.

Most elements that developing countries had sought to include in this Declaration in order to recognise the specific needs of developing countries and LDCs have either not been included or were covered in a very diluted manner. These include their request to address barriers emanating from the intellectual property regime and to address the difficulties faced by developing countries and LDCs in using flexibilities of the TRIPS Agreement to protect public health. Developing countries had also asked for addressing existing gaps in rules and flexibilities pertaining to the needs of developing countries in promoting structural transformation, industrialisation and resilient economies. They also sought recognition of solutions to tackle food security as particularly linked to strengthening local agricultural productivity and production, supporting efficient public stockholding for food security purposes, enhancing the livelihoods of farmers, and extending the needed specific consideration to net food-importing developing country (NFIDC) Members.

In the final Declaration, the paragraphs addressing food security (paragraphs 21 and 22) are a mere statement about the global food security crisis rather than a commitment to address issues of concern to developing countries, NFIDCs and LDCs. The paragraphs on intellectual property issues (paragraphs 12 and 13) recall existing agreements and instruments such as the 2001 Doha Declaration on the TRIPS Agreement and Public Health rather than committing to address intellectual-property-related barriers and acknowledging the difficulties faced by many WTO Members in making use of the TRIPS Agreement flexibilities.

At the same time, the adopted Declaration still includes certain elements that could potentially impact the policy space of developing countries and LDCs and the discretion and flexibilities they have under existing WTO rules. For example, the Declaration includes language reflecting a political commitment ‘to exercise due restraint in the imposition of export restrictions on [COVID-19 vaccines, therapeutics, diagnostics and other essential medical goods], including their inputs’ (paragraph 8). This paragraph refers to all WTO Members without any special and differential treatment, which could be taken to mean that LDCs and developing countries which have any supply of masks or COVID-19 vaccines or other products relevant to addressing the pandemic also intend to exercise due restraint in imposing export restrictions. This could make it politically more difficult for developing countries and LDCs to impose export restrictions on these products. It is well documented that many developing countries and LDCs needed to use export restrictions on COVID-19 medical products including masks and test kits in order to meet domestic needs.⁵   Without export restrictions, those developing countries and LDCs would be required to sell them on the international market where developed countries can pay the highest price for such products.

The Declaration includes a recognition of ‘the importance of ensuring that any emergency trade measures designed to tackle COVID-19, if deemed necessary, are targeted, proportionate, transparent, temporary, and do not create unnecessary barriers to trade or unnecessary disruptions in supply chains…’ (paragraph 7). This commitment could expose the emergency COVID-19 trade response measures undertaken by Members (including, potentially, measures taken under TRIPS exceptions and flexibilities) to scrutiny based on the complex standards set here. This would in effect be in tension with the assumption that the Declaration is supposed to make it easier to respond to COVID-19 and future pandemics.

The Declaration also includes a commitment that ‘notifications of trade-related measures with respect to COVID-19 and future pandemics are submitted in a timely and comprehensive manner in accordance with the WTO rules’ (paragraph 5). This commitment does not provide for special and differential treatment (S&DT) to developing countries and LDCs. Although the wording recognises the constraints facing these countries and the importance of technical assistance and capacity building, it does not imply any intention or commitment to address these constraints, or express any willingness by developed countries to contribute in this regard, nor does it link the requirement for developing countries and LDCs to implement additional notifications to their capacity to do so.

The above are a few examples of how the Declaration’s impact on policy and regulatory space could manifest. Furthermore, the Declaration includes statements that give a false narrative about how trade rules operated during the pandemic, by referring for example to ‘the importance of understanding how the WTO rules have supported Members during the COVID-19 pandemic’ (paragraph 23). In fact, WTO rules, including those on intellectual property, clearly present challenges to Members and not only support. If WTO rules already supported Members in the pandemic, then a solution pertaining to the application of the TRIPS Agreement in relation to production of COVID-19 vaccines, therapeutics and diagnostics would not be needed.

The Declaration also includes terminology that tends to differentiate between developing countries, by using the qualifying term ‘some’ before ‘developing countries’ in multiple paragraphs. This could potentially feed into the attempts to normalise differentiation among developing countries and their access to special and differential treatment. This is also a step backwards from existing WTO rules that do not include such differentiations. The Declaration includes a paragraph providing that the ‘declaration does not create sub-categories of developing country Members’ (paragraph 29). This language, while being a useful clarification, does not eliminate the potential implications resulting from setting a political precedent that is likely to make it more difficult to resist ongoing attempts to differentiate amongst developing countries.

The Declaration can have an effect on existing rights, obligations and flexibilities, particularly when applied as a subsequent agreement or subsequent practice. WTO ministerial declarations could operate as subsequent agreements as opined by the WTO Appellate Body.⁶ Subsequent agreements contribute, in their interaction with other means of interpretation, to the clarification of the meaning of a treaty (i.e., existing rights and obligations). This may result in narrowing, widening, or otherwise determining the range of possible interpretations, including any scope for the exercise of discretion which the treaty/existing rights and obligations accord to WTO Members.⁷ The Declaration includes a paragraph providing that 'this declaration does not alter the rights and obligations of WTO Members' (paragraph 29). Yet, this language does not necessarily restrict the influence of this Declaration on the interpretation and application of existing rights and obligations.

The way forward

The Declaration integrates a mandate towards work to be undertaken post MC12 to ‘analyse lessons that have been learned and challenges experienced during the COVID-19 pandemic’, including in areas of ‘balance of payments, development, export restrictions, food security, intellectual property, regulatory cooperation, services, tariff classification, technology transfer, trade facilitation, and transparency’ (paragraphs 23 and 24).⁸  This work is to be undertaken in the ‘relevant WTO bodies’, including the Council for Trade in Goods or its subsidiary bodies (such as the committees on trade facilitation, technical barriers to trade, sanitary and phytosanitary measures, market access, and agriculture), along with the Council for Trade in Services, Council for Trade-Related Aspects of Intellectual Property Rights, Committee on Trade and Development, Working Group on Trade and Technology Transfer, and Working Group on Trade, Debt and Finance.

This work might come to define the focus of attention in the work of multiple WTO bodies and committees. In the way forward, it is important to ensure that the issues of concern to developing countries and LDCs, which were not effectively addressed in the Declaration, be given priority attention. These include food security, protection of public health and the need for flexibilities in regard to intellectual property, and the need for policy space and tools to bolster economic resilience. These processes should be accompanied by proper safeguards to ensure meaningful and effective participation of developing countries and LDCs, taking into account the limited resources and institutional capacities available to them. Towards this end, the work ought to be organised in a way that allows Member state missions with limited resources to adequately participate and affords them enough time to consult their capitals. Furthermore, this work ought to remain Member-driven.                          

Kinda Mohamadieh is a legal advisor and senior researcher with the Third World Network.

Endnotes

1    WTO document WT/MIN(22)/31

2    WT/MIN(22)/30

3    The Ottawa Group consists of 14 WTO Members: Australia, Brazil, Canada, Chile, the European Union, Japan, Kenya, South Korea, Mexico, New Zealand, Norway, Singapore, Switzerland and the United Kingdom. See, for example, the submission by the Ottawa Group and other WTO Members entitled ‘COVID-19 and Beyond: Trade and Health’ (JOB/GC/251/Rev.3).

4    See for example: submission JOB/GC/304 by the ACP Group and 278 co-sponsors; and submission JOB/GC/278/Rev.4, ‘Trade rules that support resilience building, response and recovery to face domestic and global crises’, communication from the Plurinational State of Bolivia, Egypt, Indonesia, Pakistan, South Africa, Sri Lanka, Tunisia, Uganda, Republic of Venezuela

5    These include LDCs such as Bangladesh and Cambodia as well as many developing countries including Brazil, Colombia, Cote d’Ivoire, Ecuador, Egypt, India, Indonesia, Kazakhstan, Malaysia, Morocco, Oman, Pakistan, Sri Lanka, Thailand, Vietnam and Zimbabwe. See  https://www.wto.org/english/tratop_e/covid19_e/trade_related_goods_measure_e.htm

6    The WTO Appellate Body (AB) (in the US – Clove Cigarettes case) has noted that a decision adopted by Members, other than a decision adopted pursuant to Article IX.2 of the WTO Agreement (i.e., authoritative interpretation), may constitute a ‘subsequent agreement’ on the interpretation of a provision of a covered agreement. Source: AB report US – Clove Cigarettes, paragraphs 256-260. See: https://www.wto.org/english/tratop_e/

7    In 2018, the International Law Commission (ILC) released the draft conclusions on ‘subsequent agreements’ and ‘subsequent practice’ (https://legal.un.org/ilc/texts/instruments/english/draft_articles/1_11_2018.pdf). In this report, the ILC noted that: ‘Subsequent agreements and subsequent practice under article 31, paragraph 3 (a) and (b), … are authentic means of interpretation, in the application of the general rule of treaty interpretation reflected in article 31’, ‘may take a variety of forms’, and ‘contribute, in their interaction with other means of interpretation, to the clarification of the meaning of a treaty. This may result in narrowing, widening, or otherwise determining the range of possible interpretations, including any scope for the exercise of discretion which the treaty accords to the parties…’.

8    See paragraphs 23 and 24 of WT/MIN(22)/31.

*Third World Resurgence No. 351, 2022, pp 21-24