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Info Service on WTO and Trade Issues (Oct21/10) Geneva, 8 Oct (D. Ravi Kanth) – The developing and least-developed countries could face the ugly prospect of their issues in agriculture likely to be eclipsed at the World Trade Organization’s 12th ministerial conference (MC12) scheduled to begin in Geneva on 30 November. At the WTO’s General Council (GC) meeting on 7 October, on behalf of the Cotton-Four countries (Benin, Burkina Faso, Mali, and Chad), the prime minister of Mali, Mr Choguel Kokala Maiga, and Burkina Faso’s minister of commerce, industry and handicrafts, Mr Harouna Kabore, called for a credible outcome at MC12 on tackling the trade-distorting domestic support provided by the United States and other developed countries. The cotton issue has been hanging over the fire since the WTO’s fifth ministerial conference held in Cancun (Mexico) in 2003. Trade ministers had agreed on an expeditious and ambitious outcome on cotton at the WTO’s sixth ministerial conference held in Hong Kong, China in December 2005. Yet, the cotton subsidies, largely provided by the United States, sharply increased in the recent period causing a grave crisis by adversely impacting the lives of cotton growers in the four West African countries – Benin, Burkina Faso, Mali, and Chad. However, prospects for any outcome on cotton are close to nil at MC12, as the major subsidizers – the European Union and the United States – seem opposed to addressing the issue of cotton, said people familiar with the negotiations. GC CHAIR’S ASSESSMENT During the discussion on the agenda item concerning the implementation of the Bali, Nairobi, and Buenos Aires ministerial conference outcomes, the GC chair, Ambassador Dacio Castillo from Honduras, said that “there are a few matters to report in the area of Agriculture. In particular, concerning the Ministerial Decision on Public Stockholding for Food Security Purposes, the notifications by a Member invoking the Decision for the breach of the de minimis limit for rice for the marketing years 2018/19 and 2019/20 have been subject to review by the Committee on Agriculture, including at its latest meeting in September.” However, the chair did not mention the issue of cotton, while emphasizing that on the “follow-up to the Bali TRQ (tariff rate quota) Decision, Members have been engaging to find a solution to the outstanding issue of the future operation of paragraph 4 of the under-fill mechanism, within the agreed deadline of December 2021.” The TRQ issue is of considerable importance to the United States and the Cairns Group of farm exporting countries led by Australia. In a way, it reveals that the mandated and outstanding issues of concern to the developing countries such as cotton seem to be set aside, said people, who took part in the discussions. In a similar vein, the mandated issue of duty-free and quota-free (DFQF) market access for the least-developed countries (LDCs) so far remains unaddressed. The GC chair conceded that “although the Bali DFQF Decision calls for the Secretariat to prepare a report on Members’ DFQF schemes for the CTD’s annual review, as delegations are well aware, it has not been possible for the Secretariat to circulate its report for a number of years now, due to divergent views among some Members on its scope and coverage.” Ambassador Castillo said that “the situation remains unchanged on (DFQF), but the upcoming annual review will nevertheless give Members an opportunity to provide updates and share information on their DFQF schemes for LDCs.” Several developing countries, including India and South Africa among others expressed grave concern over the non-implementation of the mandated decisions. India said the permanent solution on public stockholding programs for food security, which was first agreed to (on an interim basis) at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013, was supposed to be concluded at MC10 in Nairobi, Kenya but was deferred to MC11 in Buenos Aires, Argentina. Given the adverse effects of the COVID-19 pandemic on food prices, many developing countries at the GC meeting called for an outcome on public stockholding at MC12. TRIPS WAIVER More than 20 countries took the floor to express their differing views on the temporary TRIPS waiver. Many members who spoke in support of the TRIPS waiver said that it is unfortunate that despite continued discussion over the past one year, some countries have refused to engage in text-based negotiations on the waiver. The co-sponsors of the TRIPS waiver said that the credibility of the WTO’s upcoming ministerial conference will hinge on whether members can conclude an agreement on the temporary TRIPS waiver or allow vaccine inequity to increase exponentially and result in more variants of COVID-19 as well as the unstoppable loss of lives, said people familiar with the development. The European Union, United Kingdom, and Switzerland, which have stymied the discussions on the TRIPS waiver, have suggested finding a solution by identifying the gaps in Articles 31 and 31bis of the TRIPS Agreement (provisions concerning compulsory licensing) and the TRIPS waiver provisions. Singapore reflected on the small-group consultations, arguing that enhanced engagement is needed. It said that talking past each other will not bring any solution at this juncture. Without naming a country that has taken hard-line positions in the TRIPS waiver discussions, Singapore said the notion of “I want to win at all cost” should be eschewed, said a person familiar with the discussions. THE WTO’S RESPONSE TO THE PANDEMIC The GC-appointed facilitator overseeing the discussions on the WTO’s response to the pandemic, Ambassador David Walker from New Zealand, presented his report on his ongoing consultations that focused largely on non- TRIPS elements. Ambassador Walker said he held thematic sessions last month. These sessions, he said, were focused on (1) export restrictions; (2) trade facilitation, regulatory coherence, and cooperation and tariffs; (3) the role of services trade; (4) transparency and monitoring; (5) collaboration with other organizations and engagement with key stakeholders; and (6) a framework for future pandemics and crises. The facilitator’s report is largely based on the Ottawa Group’s trade and health initiative that focuses on trade liberalization measures and market access issues. Despite flagging the issue of intellectual property rights (IPRs), and the importance of the temporary TRIPS waiver in the WTO’s response to the pandemic during the consultations as well as in the open-ended meetings, the facilitator’s silence in his report is alarming, said a person, who asked not to be quoted. In his concluding remarks, the facilitator said “I think that we are united in our understanding that the WTO needs to formulate a credible multilateral response to the pandemic.” Ambassador Walker said that “regarding the way forward, should the Chair wish, I will be looking to take these discussions forward in the coming weeks through different configurations that would allow us to undertake a frank and solutions-oriented text-based discussion.” South Africa, at the informal Doha Trade Negotiations Committee (TNC) meeting on 30 September, had said that the facilitator-led process on the WTO’s response to the pandemic will be “incomplete without addressing IP (intellectual property) barriers.” South Africa called for aligning the TRIPS Council process on the waiver and the facilitator-led process so as to deliver a credible outcome at MC12. India, in its statement at the informal TNC meeting on 30 September, said “agreement on the WTO’s response to the pandemic will be determined by reaching an outcome on the TRIPS waiver proposal.” India warned that “any response to pandemic will lack credibility if the response to IP-related challenges is not built in.” It cautioned against “discussions that are skewed, overtly focused on goods trade, aim at reducing the available policy space for members, and impose onerous obligations in the name of transparency.” India said that “these discussions promote the interests and benefits of a few while compounding the challenges for many developing and least developed countries especially amid a pandemic.” It argued that “export restrictions are legitimate policy tools available to members and its current use in the context of a pandemic is symptomatic and causal, reflecting acute supply-side constraints, and unless the supply of essential products to combat pandemics is augmented by mobilizing the global manufacturing capacity, by making the IP know-how and technology openly accessible to all potential manufacturers, we will not be able to address these challenges.” Moreover, said India, “the WTO response should not only try to address the existing trade barriers like export restrictions, but also address new and emerging ones, like vaccine differentiations or COVID passports affecting personnel movements, in turn resulting in trade barriers for export of services.” It emphasized that the “free flow of services and supplies, like health services [such as] international telemedicine services needed for handling the pandemic or natural disasters must be prioritized.” To bolster its arguments about the need to include the TRIPS waiver in the WTO’s response to the pandemic, India circulated a restricted document on 6 October outlining the elements that need to be included in the WTO’s response to the pandemic. The elements include: 1. Secretariat to prepare a catalogue of flexibilities under the WTO Agreements. Members to consider how to use these flexibilities and how to improve access to them to best enable a response to current and future pandemics as well as natural disasters, including through consideration of possible escape clauses or a “peace clause” to avoid disputes. To identify WTO Agreements, which do not contain such flexibilities or escape clauses and examine the possibility of providing flexibilities/escape clauses in such Agreements to best enable a response to future pandemics as well as natural disasters. 2. Most of the International Organizations, like the International Monetary Fund, have introduced flexibilities or deviated from their stated stance to enable countries to tackle the pandemic. Can WTO also catalogue rules, which can be relaxed or loosened to enable Members to tackle the adverse impact of pandemics and natural disasters? 3. WTO response should not only try to address the existing trade barriers like export restrictions, but also address new and emerging ones, like vaccine differentiations or COVID-19 passports affecting personnel movements, which in turn result in trade barriers for export of services. 4. WTO response, in addition to focusing on facilitating free flow of goods, should also provide for free flow of services and supplies, like health services such as international telemedicine services needed for handling the pandemic or natural disasters. 5. While considering issues relating to export restrictions as part of WTO response, Members shall also keep in mind that export restrictions are symptoms of acute supply side constraints, and till we address such constraints, exports restrictions will continue to surface one way or the other. In fact, in a supply constrained environment, export restrictions can check limited supplies being cornered by a few, resulting in a crowding-out effect on developing countries, including LDCs. We have seen that this has actually helped in ensuring a more equitable distribution and access during the current pandemic. 6. While providing for regulatory coherence to avoid duplications and save time, due care should be taken to ensure that all concerned regulatory authorities have access to the regulatory dossiers from the regulatory authority providing initial approval. 7. Temporary measures such as trade facilitation measures and tariff liberalization, which in any case Members can put in place on their own to handle pandemics and natural disasters, need not be made permanent, as making them permanent would unnecessarily circumscribe Members’ policy space during normal times. Decision to take any measure permanent or not should be left to the concerned Members, as per rights and obligations under the WTO. 8. As part of its response to pandemics and natural disaster, the WTO, along with other International Organizations, can work on putting in place a pandemic response system, wherein we create a pool of resources in terms of essential goods and services to tackle the pandemic or natural disasters. In the context of the current pandemic, these could be goods like oximeters, oxygen concentrators, test kits, and some essential medicines and services, like healthcare services. Operationalizing this mechanism for essential goods would include mapping manufacturing capacities and demands, matchmaking to cater to such demands, and, in case of services, pooling of resources in terms of healthcare and other professionals drawn from various Members with mutual recognition or with relaxed recognition norms temporarily facilitating movement of such professionals, including through temporary measures involving special visas or permits, matching the availability of such resources with demand and providing for short duration supply of their services, say for a period of four to eight weeks, both physically or remotely to address the acute shortages. 9. Food Security issues, including Public Stockholding for food security purposes. 10. Addressing intellectual property challenges in augmenting manufacturing capacities and ensuring unimpeded, timely and secure access to quality, safe, efficacious and affordable health products and technologies for all, for a rapid and effective response to pandemics, including a waiver from specific provisions of the TRIPS Agreement, wherein the TRIPS waiver component has to be finalized before MC12. WTO response to pandemics without the TRIPS waiver element will not be credible. 11. The WTO response package shall also contain an in-built monitoring mechanism to assess the effectiveness of measures put in place during pandemic and natural disasters, to determine whether they are providing desired results and, if not, what further steps need to be taken. PREPARATIONS FOR MC12 In his statement on the preparations for MC12, the GC chair, Ambassador Castillo said “Work towards a possible MC12 outcome document is a member-led process.” “As always, it is the members that decide what goes into any agreed outcome document,” he maintained. The outcome document for MC12 will include two sections. In section one, the chair said, topics to be covered would include: (i) the context in which MC12 takes place; (ii) broader political messages; and (iii) guidance from ministers on additional elements members may agree on. The second section will include decisions reached at MC12, he suggested. Ambassador Castillo said that, based on the preliminary exchanges in the small group consultations, members believe that the first part of the outcome document should take into account both the external and internal environments in which MC12 is taking place, namely the pandemic, the changed trading landscape, and the systemic/internal challenges that the WTO is facing. He said members also echoed views that the “political messages” should note the need for greater solidarity and collaboration amongst members, the role of international trade and the WTO in global economic recovery, a reaffirmation of the principles enshrined in the Marrakesh Agreement, and the needs and interests of developing country members, in particular the least developed members.
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