TWN Info Service on WTO and Trade Issues (Oct21/25)
27 October 2021
Third World Network

WTO: Four South countries propose bold approach on response to pandemic
Published in SUNS #9446 dated 27 October 2021

Geneva, 26 Oct (D. Ravi Kanth) -  Several members have expressed concerns over the lack of transparency and inclusion in the small-group meetings at the World Trade Organization, as they fear that their specific positions will not be taken into consideration in finalizing the proposed "deliverables" for the 12th ministerial conference (MC12) starting in Geneva on 30 November, said people familiar with the development.

At an informal meeting of the Trade Negotiations Committee (TNC) on 25 October, the WTO director-general Ms Ngozi Okonjo-Iweala offered an upbeat assessment about the prospects for MC12, following her meetings with officials at the G20 trade ministerial meeting in Sorrento (Italy) and in New Delhi (India), an assessment that does not seem to tally with the realities on the ground in all areas of the negotiations at this juncture, said people, who preferred not to be quoted.

The DG apparently said the voice of the developing countries needs to be heard. She appears to have emphasized that both sides - the supporters and the opponents of the chairs' texts on fisheries subsidies, agriculture, and improvements on special and differential treatment (S&DT) in the 10 Agreement-specific proposals - must be equally heard and their concerns must be reflected.

The DG said she is happy that India remains positive about the need to have a good outcome at MC12, said people, who asked not to be quoted.

The DG's statement that the voice of the developing countries needs to be heard seemed like a breath of fresh air as compared to her earlier statement at the previous informal TNC meeting on 30 September.

At that informal TNC meeting on 30 September, the DG had said: "I have looked at all the submissions on fisheries subsidies. If we throw all these in, in the form they are, I believe it would be impossible to move forward or to negotiate. I would strongly urge delegations and Ambassadors to again talk to each other so you can converge a little more to make line-by-line negotiations a real and manageable process for fisheries."

Without mentioning the submissions made by India (RD/TN/RL/148) and the ACP and African Group (RD/TN/RL/146), the DG's remarks against those submissions had caused some consternation among members, said people familiar with the development (see SUNS #9425 dated 27 September 2021).

At the informal TNC meeting on 25 October, the DG did not mention the "red lines" drawn by India on fisheries subsidies, agriculture, and other developmental issues, said people, who preferred not to be quoted.

The DG's remarks at the informal TNC meeting have not been made public yet.

At the meeting, the chairs of the Doha negotiating bodies tasked with producing the proposed "deliverables" for MC12 - a fisheries subsidies agreement; the permanent solution on public stockholding programs for food security; and improvements to make the special and differential treatment provisions in various WTO agreements simple and effective - offered their respective somewhat downbeat assessments about the logjams in the negotiations, said people who asked not to be quoted.

Surprisingly, the negotiations on fisheries subsidies has remained suspended for the past two weeks and there is no clarity yet as to when the chair of the negotiations, Ambassador Santiago Wills from Colombia, will resume the meetings.

Apparently, the chair indicated about convening a meeting this week and also about the possibility of issuing a revised draft text soon, said people, who asked not to be identified.

With less than 34 days left for MC12, the prospects of reaching an agreement on fisheries subsidies seem to be bleak, and the only possible way forward is to issue a statement at the meeting that the negotiations will be continued, said a trade envoy from South America, who preferred not to be quoted.

In the agriculture negotiations, there appears to be a complete stand-off in the discussions on the permanent solution on public stockholding programs for food security between a group of South American countries, on the one side, and the African Group led by Nigeria, on the other, said people familiar with the development.

In fact, members raised sharp concerns about the small-group meetings, complaining about the lack of transparency and their being denied the right to participate in these meetings, said people, who asked not to be quoted.

The chair of the WTO General Council (GC), Ambassador Dacio Castillo from Honduras, presented his assessment of the small-group consultations with members on the first part of the proposed ministerial document that deals with the current state of the world trading system and the challenges, as well as other process-related issues.

The GC-appointed facilitator on finalizing the WTO's response to the pandemic, Ambassador David Walker from New Zealand, also presented his report on the consultations on the trade-related aspects in addressing the pandemic.

It remains unclear as to when he plans to discuss the long list of issues submitted by India that includes the TRIPS component and the food security component among others.

COMPREHENSIVE PROPOSAL ON WTO'S RESPONSE TO PANDEMIC

In a comprehensive submission, titled "WTO response in light of the pandemic: trade rules that support resilience building, response and recovery to face domestic and global crises," Egypt, Pakistan, South Africa, and Sri Lanka on 25 October outlined the benchmarks to be included in the WTO's response to the pandemic.

The four members, in their proposal (JOB/GC/278), argued that "the COVID-19 crisis has revealed deep discrepancies in the policy tools available to developing countries."

They said that "developed countries both possess 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 LDCs could not."

"It is clear that we are neither building back better nor building back together and economic recovery continues to be imbalanced and uneven," the four countries emphasized.

More importantly, the four countries said "trade rules should accommodate the policy space that is particularly important for developing countries and LDCs since they lack the fiscal and monetary policy tools that developed Members have used to support their economies and people through the current crisis."

The four countries also underscored that "lessons learned from the COVID-19 pandemic should be leveraged and transformed into tools in order to advance trade policies and rules that help resilience-building, response and recovery from domestic and global crises, particularly environmental, health and food crises."

Also equally important is the "crucial need to facilitate the utilization of instruments within the mandate and toolbox of the WTO to pursue structural transformation that is needed in order to address causes of this unequal recovery and to build resilience that allows better response to future crises."

Moreover, they said, such interventions should pursue enhancing developing countries' and LDCs' capacities to prepare, respond and recover from such crises, at the heart of which is the need to build the resilience of their populations, economies and social systems including the livelihoods of vulnerable farmers and food production systems.

The four countries argued that "there is also the need to develop and enact new tools that would allow developing countries and LDCs the needed space through their trade policies in order to take immediate measures in the case of crises, in order to shield the livelihoods of the most vulnerable in their populations. This is particularly important given that they cannot utilize the extensive fiscal and monetary tools at the disposal of developed countries."

In short, they said "processes emanating from the WTO response in light of the pandemic should not undermine or marginalize existing mandates which are of concern to developing countries and LDCs."

Against this backdrop, the four countries highlighted the following issues which they said should be part of the WTO's response to the pandemic:

1. Food security: Agricultural subsidies that are necessary for building resilience are subject to aggregate measurement of support (AMS) limits that considerably constrain the policy space of governments. WTO rules should allow subsidies for supporting agricultural production such as of food, raw material, and incomes of farmers in developing countries and LDCs, including for direct payments to low income, resource poor farmers for a relevant period of time for the purpose of responding to and recovering from domestic or global crises.

2. Policy flexibilities for food stocks: A set of measures are required to facilitate the functioning of public stockholding programmes in developing country and least-developed country Members which will include: (1) allowing subsidies to producers and consumers for supporting public stockholding programmes not to be accounted for in Aggregate Measurement of Support (AMS). Such stocks shall be for food security purposes and the Members endeavour not to export from them; (2) ensure policy space and funding for Net Food Importing Developing Countries (NFIDCs) to build stocks and support distribution of food through public stockholding programmes.

3. Economic resilience and recovery include making pandemic-related subsidies non-actionable; Services must involve removal of Mode 4 restrictions for health care workers including through increased non-transparent economic needs and labour market tests, visa requirements, lack of recognition of qualifications, discriminatory travel restrictions and vaccine differentiation.

4. Intellectual property: Recognizing the crucial need to diversify and scale-up production to meet global demands and promote economic recovery, 64 WTO Members have proposed a waiver from certain provisions of the TRIPS Agreement for the prevention, treatment, and containment of COVID-19 (IP/C/W/669/Rev.1). Adoption of this proposal remains an urgent priority and is essential to achieve equitable access.

5. Beyond COVID-19, resilience building, response, and recovery to face domestic and global crises, also requires WTO Members to address issues and concerns with respect to intellectual property. For instance, WTO Members should not prevent or discourage another Member from utilizing flexibilities of the TRIPS Agreement or in any way limit such flexibilities, hence restricting policy options to respond to crises.

Commenting on issues currently under consideration, particularly from the Ottawa Group of countries led by Canada, in the GC-appointed facilitator-led process on the WTO's response to the pandemic, the four countries cautioned that "Proposals considered under the WTO pandemic response should in no way constrain the policy tools and space that developing countries and LDCs need to respond to pandemics and similar crises, nor restrict tools and flexibilities available to developing countries and LDCs under the WTO agreements."

On export restrictions, the four countries argued that "solutions concerning export restrictions should not undermine the rights available to developing and least-developed country Members under the WTO rules and should effectively allow for considering the specific needs and conditions in developing countries and LDCs. What we have learned during the pandemic is that when demand exceeds supply, developing countries/LDCs will be outbid by developed countries who can afford to pay much higher prices."

On the issue of "regulatory coherence and cooperation," the four countries said "as regulations and related implementation procedures are closely intertwined with a country's level of development and institutional capacities, any propositions in this regard should avoid mandatory obligations seeking harmonization of technical regulations including standards and conformity assessment procedures."

Commenting on the trade facilitation measures proposed by the Ottawa Group, the four countries said "any trade facilitation measures to be recommended as part of the pandemic response should not undermine the flexibilities available to developing countries and LDCs under the Agreement on Trade Facilitation (TFA). Any new trade facilitation measures to be pursued should similarly acknowledge and accommodate the capacities of developing countries and LDCs including institutional financial and implementation capacities and should be voluntary and not result in new obligations. Furthermore, Members should not seek to make permanent, trade facilitative measures made within the specific context of the pandemic."

In a similar vein, as regards the Ottawa Group's demand for market access, the four countries argued that "the pandemic response should not be utilized to pressure developing countries and LDCs to undertake additional liberalization, whether in goods or services."

They expressed fear that "lowering the import tariffs on goods considered essential to fight the COVID-19 pandemic is likely to have an adverse impact on the continued sustainability of the manufacturing industry in developing countries for these products."

Also, the four countries argued that "producers in developing countries may not be able to face import competition in a large number of goods that could be considered to be essential to respond to the pandemic or similar crises. Consequently, lowering tariffs would have adverse consequences for manufacturers from developing countries."

On another theme that is being pursued by the facilitator concerning the issue of transparency, the four countries said "we acknowledge the importance of transparency, but references to future work on transparency should not include additional cumbersome obligations."

Significantly, according to the four countries, "any work in this area must be in the provision of capacity building to developing countries. Transparency and inclusiveness must also permeate the entire functioning of the WTO including in convening of meetings (i.e., scheduling of meetings, inclusiveness through fair and equitable geographical and regional representation by delegations at the meetings), Ministerial Conferences, and work of the Secretariat. Strict requirements to publish information on trade measures taken during a pandemic must take due regard to limited institutional capacities that developing countries and LDCs have during such periods. Furthermore, Members should encourage transparency of contractual terms as opaque conditions in licensing arrangements have greatly contributed to vaccine inequity."

Finally, on the demand made by the Ottawa Group of countries to include in the WTO's response to the pandemic the issue of collaboration with other international organizations and other stakeholders, the four countries said "several proposals with respect to collaboration go substantially beyond the function of the WTO Secretariat as well as risk undermining the Member-driven character of the WTO."

Therefore, they said, "it is crucial that as a rules-based organization, WTO Secretariat's role is limited to the various agreements within the WTO and is not expanded to addressing matters beyond its competency. The Member-driven nature of the WTO should be safeguarded."