TWN Info Service on WTO and Trade Issues (Sept21/06)
8 September 2021
Third World Network

WTO: Opposition to inclusion of export restrictions in Covid-19 response
Published in SUNS #9414 dated 8 September 2021

Washington DC, 7 Sep (D. Ravi Kanth) – The United States, India and South Africa have opposed attempts to include the issues of “export restrictions, trade facilitation, regulatory coherence, cooperation and tariffs” as part of the World Trade Organization’s response to the COVID-19 pandemic, said people familiar with the development.

The WTO General Council-appointed facilitator, Ambassador David Walker from New Zealand, who has been tasked with crafting the WTO’s response to the pandemic, has included export restrictions, trade facilitation, regulatory coherence, cooperation and tariffs as part of the issues for the proposed thematic discussions.

At an informal meeting convened by Ambassador Walker on 1 September, the US, India, and South Africa opposed attempts to include “export restrictions” and “trade facilitation, regulatory coherence, cooperation and tariffs” as part of the WTO’s response to the pandemic on grounds that there is no material evidence for discussing these issues.

In nuanced statements delivered at the meeting, the three countries argued that the recently released findings in a WTO Trade Policy Review Body (TPRB) report would not justify discussions on these issues, said people, who asked not to be quoted.

In contrast, the key members of the Ottawa Group of countries such as the European Union, Canada, Australia, and Brazil among others strongly supported the need to include the issues of export restrictions, trade facilitation, regulatory coherence, cooperation and tariffs as part of the WTO’s response to the pandemic, said people, who preferred not to be identified.

FACILITATOR’S SIX PROPOSED ELEMENTS

In his report to the General Council on 27 July, the facilitator had highlighted six elements to be negotiated as part of the WTO’s response to the pandemic.

Ambassador Walker’s comments, circulated in a restricted document (Job/GC/269), suggested that the “thematic series” would center around six areas.

They include:

(i) export restrictions;

(ii) trade facilitation, regulatory coherence, cooperation and tariffs;

(iii) the role of services;

(iv) transparency and monitoring;

(v) collaboration with other organizations and engagement with key stakeholders; and

(vi) the idea of a framework to respond more effectively to future pandemics and crises.

The facilitator, however, has excluded from his thematic discussions the crucial component on Intellectual Property (IP) issues, namely, the temporary TRIPS waiver proposal co-sponsored by 63 countries at the WTO.

With the worsening global crises due to the denial of vaccines to the developing countries and the growing “vaccine apartheid” policies being adopted by the Northern countries, the need for the TRIPS waiver to temporarily suspend certain TRIPS provisions relating to copyrights, industrial designs, patents, and protection of undisclosed information for scaling-up the production of diagnostics, therapeutics, and vaccines across countries has assumed grave proportions in fighting the Covid-19 pandemic, said people, who asked not to be quoted.

So far, more than 4.5 million people have died due to the ever-mutating SARS-CoV-2 virus.

The unofficial estimate of the total lives lost to the worst pandemic in the past 100 years is more than 12 million.

Yet, a handful of countries such as the European Union, led by its key member state Germany, Switzerland, and the United Kingdom are continuing to deny an early outcome on the TRIPS waiver.

Against this backdrop, the facilitator’s decision to include only trade-related market access issues and not IPR issues in the proposed thematic discussions has raised serious questions, said several people, who asked not to be quoted.

Ambassador Walker said “we start our discussion by focusing on the trade policy-related aspects (other than IP and IP-related aspects) and the “Third Way” – mindful that the elements contained in the report by the Chairman of the General Council serve as a starting point and would be adjusted as Members deem necessary, going forward.”

The facilitator appears to be leaning towards the much-criticized WTO Director-General Ms Ngozi Okonjo- Iweala’s “Third Way” approach, which is ostensibly aimed at safeguarding Big Pharma’s interests while promoting market access related issues, said people who asked not to be quoted.

The facilitator said, “I proposed leaving IP and IP-related aspects aside from this process for now, as the Chairman of the TRIPS Council was to report on these aspects to the General Council.”

OPPOSING VIEWS AT THE MEETING

At the meeting on 1 September, the United States came down heavily on the need to discuss the issue of export restrictions.

The US apparently drew attention to the WTO’s TPRB report on trade-related developments during mid-October 2020 to mid-May 2021.

The WTO report revealed that countries had adopted more trade-facilitating measures than trade-restrictive measures.

The findings also revealed the “gloomy” narrative perpetuated by the European Union, Japan, and Canada on behalf of the Ottawa Group in their trade and health initiative, and the WTO Director-General’s “Third Way” approach, said people, who asked not to be quoted.

The WTO report said that “since the outbreak of the pandemic, 384 COVID-19-related trade measures in the area of goods have been implemented by WTO Members, of which 248 (65%) were of a trade-facilitating nature and 136 (35%) could be considered trade-restrictive measures.”

It argued that “several of these measures, originally introduced in immediate response to the pandemic, have been extended during the review period. Export bans accounted for 84% of all restrictive measures recorded.”

It said that the reduction or elimination of import tariffs and import taxes accounted for 60% of trade-facilitating measures taken, and several Members reduced their tariffs on a variety of goods such as PPE, sanitizers, disinfectants, medical equipment and medicines/drugs.

“Some WTO Members and Observer-countries, who are severely affected by successive waves of the pandemic, have actually eliminated import tariffs on certain goods necessary to fight COVID-19, such as oxygen, oxygen canisters, certain drugs, and active substances”.

Further, the report argued that “WTO Members continued to repeal measures implemented in response to the pandemic and, as at mid-May 2021, around 21% of COVID-19 trade-facilitating measures and 54% of the COVID-19 trade-restrictive measures have been terminated, suggesting a swifter roll back of trade-restrictive measures.”

It said that “fifty-seven percent of the 114 export restrictive measures put in place since the beginning of the pandemic have been repealed.”

The report argued that the trade coverage of COVID-19-related trade-facilitating measures implemented since the beginning of the pandemic was estimated at USD 291.6 billion, while that of the COVID-19-related trade- restrictive measures stood at USD 205.8 billion.

According to preliminary estimates by the WTO Secretariat, the trade coverage of the trade-facilitating measures still in force (USD 107.6 billion) is slightly higher than that of the trade-restrictive measures (USD 106.0 billion).

Based on the TPRB’s findings, the US apparently said that it would be wrong to tinker with the current rules, as it could create imbalances in members’ rights and obligations, said people, who asked not to be quoted.

The WTO report appears to have countered the “gloomy” narrative contained in the Ottawa Group’s trade and health initiative, as well as the WTO DG’s “Third Way” approach.

In its intervention at the meeting, India apparently said members need to be realistic and not focus on the wrong issues.

India apparently said that export restrictions and other measures, such as (non-tariff) barriers, are incorrect according to the evidence provided in the WTO’s report.

India pointed out that the problems being faced by countries due to shortage and unequal access to vaccines are largely due to supply-side issues.

More importantly, India said the evidence from the WTO’s report revealed that the proponents of the trade and health initiative have constantly demanded an evidence-based approach.

While the EU and other members refuse to accept evidence provided by the WTO’s report, they continue to demand evidence at the WTO’s TRIPS Council as to how the TRIPS waiver would work and where are the barriers to ramping up production of diagnostics, therapeutics and vaccines, said people familiar with the development.

India called for including the IPR component, particularly the TRIPS waiver, in the thematic discussions being conducted by the facilitator.

India called on the Ottawa Group members such as the European Union, Switzerland, and the United Kingdom to stop pushing the narrative for the so-called trade-facilitating measures, including the ban on export restrictions, as part of the WTO’s response to the pandemic.

India said that members need policy space during the pandemic to respond effectively to the evolving situation, suggesting that the WTO report showed that members acted responsibly, said people familiar with the Indian position.

South Africa voiced its concern about including extraneous issues in the WTO’s response to the pandemic, suggesting that the core issues concerning IPRs must be addressed without delay.

In their interventions, the European Union and other members of the Ottawa Group appear to have suggested that bad trade measures, including export restrictions, transparency provisions, and the disruption of global value chains need to be addressed.

The EU, which took recourse to rather insidious export restrictive measures during the pandemic, has now assumed the role of championing the cause for banning export restrictions and other measures, in what appears to be an attempt to target the United States, said people familiar with the discussions at the meeting convened by the facilitator.