TWN Info Service on WTO and Trade Issues (Feb22/01)
7 February 2022
Third World Network

WTO entering into "dangerous" times?
Published in SUNS #9503 dated 31 January 2022

Geneva, 28 Jan (D. Ravi Kanth) -  Despite the worsening COVID-19 pandemic as well as growing calls from both inside and outside the WTO on agreeing on the TRIPS waiver, members have continued to spar over the substantive issues concerning the WTO's response to the pandemic and the "way forward" in the negotiations on this crucial issue, said people familiar with the development.

More importantly, many developing countries, including India, Indonesia, South Africa and the other co-sponsors of the TRIPS waiver proposal, emphasized the urgent need to agree on the TRIPS waiver as well as on the way forward, to be led by the current General Council (GC) chair Ambassador Dacio Castillo from Honduras.

Some members seem to be concerned if the Swiss trade envoy Ambassador Didier Chambovey, who is likely to be elected as the new GC chair soon, will oversee the negotiations on the WTO's response to the pandemic, as a facilitator, said people, who asked not to be quoted.

Given the continued opposition of Switzerland to the TRIPS waiver as well as the controversial role that the Swiss trade envoy had played as the "friend of the chair" on the issue of special and differential treatment in the fisheries subsidies negotiations last year, it may be inappropriate to task him with this responsibility, said people, who asked not to be quoted.

At a dedicated informal open-ended meeting on 27 January on the "WTO response to the pandemic", the Sri Lankan trade envoy, Ambassador Gothami Silva, specifically urged the current GC chair Ambassador Castillo to oversee the negotiations on the WTO's response to the pandemic, a call that was apparently endorsed by trade envoys in varying levels of emphasis, said people who asked not to be quoted.

The GC chair, however, said that the work done till now must be part of the discussions, including the previous facilitator's report submitted by the former New Zealand trade envoy David Walker.

Ambassador Castillo said "we all recognize the enormous effort, work and contributions that were made last year," calling on members to "draw upon and improve Ambassador Walker's text as well as their own proposals."

Notwithstanding the differences on both substantive issues and the way forward, he said that "I believe that a path forward can still be found and that these divergences should not stop us from progressing."

He urged members to support the process that he was leading so far.

"I appeal to you to engage in building up - not down - what we have before us. Let us work together to see how and where we can improve. For us to reach an acceptable outcome, everyone will have to be prepared to share the pain. It does not sound like we are in for rosy days ahead, but I know the pain will be worth the effort."

Significantly, the United States has apparently said at the meeting that Walker's report has no relevance now in his absence, said a trade envoy, who asked not to be identified.

As reported in the SUNS last year, several developing countries including India, Sri Lanka, Pakistan, and Egypt had raised fundamental concerns, and proposed that their draft ministerial statement be taken into consideration by Ambassador Walker.

However, the former New Zealand trade envoy had unilaterally decided not to include them in his draft, reinforcing their concerns that the Walker report can hardly be the basis for further work.

However, several industrialized countries, led by the European Union, Canada on behalf of the Ottawa Group, New Zealand, and others said that Walker's text must remain as the basis, said people familiar with the development.

At the meeting on 27 January, these countries apparently suggested that consultations should be based on Walker's text, said people, who asked not to be quoted.

GROWING SUPPORT FOR TRIPS WAIVER

At the meeting, many members including India, Indonesia, South Africa, the African Group led by Cameroon, and Pakistan among others demanded a resolution to the TRIPS waiver.

The temporary TRIPS waiver seeks to suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information in ramping-up the production of diagnostics, therapeutics, and vaccines across countries to combat the COVID-19 pandemic.

On 27 January, a large number of doctors and health professionals called for the waiving of the intellectual property rights (IPRs) on COVID vaccines, according to a BBC news report.

At the meeting, India also emphasized on its proposal for convening a virtual ministerial meeting on the TRIPS waiver.

Interestingly, Thailand, for the first time, is understood to have suggested that there is no need for the TRIPS waiver, in what turns out to be a rather inexplicable statement, said a trade envoy, who preferred not to be quoted.

Cameroon, on behalf of the African Group, said that no one is "safe, until every one is", suggesting that "the TRIPS provisions on patent protection and related licensing solutions have failed to meet our needs," in what appears to be a criticism of the EU's proposal relating to the use of compulsory licensing provisions in Article 31 of the TRIPS Agreement, the trade envoy said.

The African Group argued that "no economic recovery will happen unless the health crisis is brought under control."

It commended "all initiatives aimed at addressing vaccine inequity and therapeutics and we call on Members to take exceptional decisions in these exceptional circumstances."

The African Group urged members to constructively engage to reach an outcome on the waiver at the earliest.

"We cannot indefinitely repeat the same arguments and prevent WTO to have a meaningful response on this very important issue," it argued.

In parallel, the African Group said members "need to facilitate (i) the movement of inputs for the production of vaccines, (ii) the transfer of technology, (iii) an equitable distribution of vaccines, and (iv) access to essential goods for the foreseeable future."

Further, "to achieve this, we need to eliminate IP barriers, export restrictions on certain goods and ultimately develop an appropriate response programme for future crisis situations", Cameroon said.

Given the shortage of "government revenues and the increase in debts," the African Group called "on Members to consider the discussions conducted with respect to debt restructuring and debt relief in other international fora, while the WTO could examine the balance of payment needs of members in view of providing meaningful support to the most affected sectors."

DIFFERENCES OVER WALKER'S TEXT

The ACP (African, Caribbean, and Pacific) group, coordinated by Jamaica, said Walker's draft text "can form the basis for further work in this area", suggesting that there is still room for improvements in that draft text.

However, it said it is still studying Walker's draft text (Job/GC/281).

The ACP group said that there is "much room for improvements. These are substantive, editorial and legal in nature. We are available to contribute to this objective."

The ACP referred to its own proposal (Job/GC/218) to "place more emphasis on the importance of food security in the WTO's COVID response initiative."

The group also wants to see "more work done on the issues pertaining to economic recovery such as scaling up manufacturing capacity in developing countries and LDCs in respect of items required to contain and prevent the spread of the virus, and to address its impacts."

The group said "our work here is effective in dealing with the issue of inequity in the availability of these items," arguing that "more work is, therefore, needed in areas such as technology transfer, multilateral collaboration as well as technical assistance and capacity building."

It praised Walker's draft on services, suggesting that some elements found in Walker's text are similar to certain elements in the ACP's submission (Job/serv/305).

As regards the TRIPS dimension, it said "discussions are progressing on finding a mutually acceptable outcome on the TRIPS dimension of the WTO's COVID response, including the TRIPS waiver proposal, a critical aspect, and other IP related issues."

"For us, we believe that the WTO's response must be comprehensive, include issues of interest to all members in a balanced manner, and the health dimension of the response must be integral to the outcome," the ACP group said.

On the way forward, Jamaica said that "the process should be inclusive and transparent and all small group processes should be open to interested delegations."

It requested that the group be "included in sub-plenary activities aimed at arriving at a final outcome on the WTO's response to the pandemic."

It said that "the facilitator process will not only focus on stabilize, recover and rebuild, but also leaves us with a blueprint as it relates to how we respond to future international crises," calling for "patience from the membership as we work towards arriving at an outcome on this file that is balanced, effective, acceptable and meets the expectations of all members."

In their separate statements, India, Indonesia, South Africa and Sri Lanka said that language should be included on food security, policy space for food stocks, and making pandemic-related subsidies non-actionable as well as improvements in Mode 4 of GATS concerning the movement of short-term services providers.

The EU, members of the Ottawa Group led by Canada, and several South American countries supported Walker's draft text, and called for it to be treated as the basis with little or no changes.

DG'S CONTROVERSIAL ROLE

According to a statement posted on the WTO website on 27 January, WTO director-general Ms Ngozi Okonjo- Iweala applauded members for the "very constructive" discussion in which all delegations recognized the importance, for the credibility of the WTO, of agreeing on a meaningful pandemic response.

She also pitched for "a holistic approach, both on the side of intellectual property but also on the side of the other trade-related aspects for very sensible reasons, and this is that one cannot move without the other," in what appears to be the DG aligning herself with the demands made by the European Union and members of the Ottawa Group, said people, who asked not to be quoted.

For example, she is bringing a subtle linkage on resolving the TRIPS dimension on the one side, and the trade- related aspects, as outlined in Walker's report, on the other.

On the trade-related angle, the DG stressed that most delegations see the facilitator's text as the basis to proceed despite the existing divergences.

She sought members' patience on the IP-related aspects of the pandemic response, on grounds that it is a "very difficult issue. If it were easy, it would have been resolved in the almost two years that this discussion has been going on (in the TRIPS Council). This small group process ... is going on but it is very tough. I have to say there is no easy road."

The EU concurred with the DG's statement that delivering a WTO response to the pandemic is an urgent priority, which should be based on two equally important components: intellectual property and the trade-related elements, said people who took part in the meeting.

Commenting on the "Walker track," the EU said it fully supports an immediate resumption of the process.

The EU said that there is broad support to base the work on Walker's text, suggesting that a few delegations want to improve the text but that this does not undermine the broad support to proceed on the basis of that text, said people who asked not to be quoted.

Brussels argued that the "Walker text" includes "two components: an action plan, which is looking at the future and is non-prejudicial; and a declaration - which is equally important as it includes valuable political commitments."

It cautioned that if those "valuable political commitments" are not included in the final outcome, the perception would simply be that the membership is not able to provide a "here and now response".

Commenting on the US intervention, the EU said it agrees that national governments are at the front line of the crisis.

"That makes it all the more important for that information on domestic policies to be shared and explained," the EU said.

Clearly, it appears as a design that the DG's views - which seem to be largely based on the EU's proposals - are simultaneously vindicated by the EU, said a person, alleging a kind of "capture of the WTO" by the major developed countries.

"DANGEROUS" IMPLICATIONS OF DG'S STATEMENT

It seems rather puzzling that on the day of the dedicated meeting on the WTO's response to the pandemic, the DG's statement issued at the informal GC meeting on 25 January was circulated as a restricted document (Job/GC/290).

The DG's statement at that informal GC meeting allegedly reflects a "dangerous" turn as to how the business should be conducted.

Citing the remarks made by the trade envoy of the Philippines, wherein he said that "we should not waste the opportunity of this pandemic to show that we can really be part of the solution to a global problem," the DG said "if that is ready, let us harvest it. If another portfolio is ready, we harvest that."

She said "from what I heard, listening to the GC Chair and talking to Members, is that almost everybody agrees that this response to the pandemic is really crucial."

Ms Okonjo-Iweala asked rhetorically, "so what would such a process entail for us here in Geneva? We would have to work on all areas as I said, push all forward."

The DG maintained that she said this to Ministers "in a couple of the meetings that I have been involved - both the mini-Ministerial hosted by Switzerland last week as well as the Ottawa Group hosted by Canada - "please empower Ambassadors here" so that we can come as close to a solution as possible".

More problematically, she said "negotiating in a large group may not be feasible. Let us do all of that in small groups."

She went on to say that "in fisheries subsidies and agriculture, we know there are specific, difficult issues that we now have to solve. And if we need a small group of Ministers to come together and negotiate with each other - those who are most apart, to try and break this - we should not waste time or hesitate to do that," suggesting that ministers would be very willing to work in that way.

She highlighted the importance of "such a continuous dynamic process among ourselves, between ourselves and our capitals, between Geneva and the capitals, in order to bridge gaps, remove brackets, do what we can, we are perfectly capable of delivering some of the things that we have been working on."

"I have seen the possibility that with three or four Ministers, we have seen it in action. They can actually negotiate with each other...but when it is a large group, it is more difficult. But by Zoom, if it is just a small group, they can be able to break whatever impasse that we are encountering."

Commenting on the WTO response to the pandemic and the TRIPS waiver, she said "everybody knows that we have been trying in a small group format to try to break through and see if we can come to some agreement. It is not easy. But we are trying."

Claiming that there is no lack of transparency, the DG said that "Ambassador Sorli (Norway), our TRIPS Council Chair, has been briefed as well as the GC Chair on what we are trying to do. The whole idea is to make that kind of breakthrough with a small group and then see if there is something we can bring to a larger group and eventually it would come to the TRIPS Council."

Ms Okonjo-Iweala reiterated, "because there are some who think that this suggestion is just to have something and then call a virtual Ministerial and maybe impose that solution on everyone."

She said "No, this belongs to the TRIPS Council and should go back to the TRIPS Council. The TRIPS Council Chair is briefed on how this is progressing. We want to have transparency and to have people comment on whatever the proposed outcome is."

The DG assured members "that this will happen but there is no doubt that we are dealing with a tough issue. Perhaps we are inching forward on progress. We are not yet in a position to bring something out. But we keep our fingers crossed that that will happen".

She went on to comment on a point made by the GC chair, "since we have all agreed that response to the pandemic must be a comprehensive package that is made up of IP and trade and health issue."

It is common knowledge that the Trade and Health initiative has been proposed by the EU and the Ottawa Group.

The DG said that "I am also using the same approach on trying to make breakthroughs on fisheries subsidies and agriculture as well as with the WTO reforms."

For the sake of transparency, it is worth quoting a paragraph from the DG's statement that appears replete with "dangerous" messages: "Let me end by sharing something. I hope this will make you laugh when I say it so that we can end on a bit of a light note. One of my staff dug out from the archives of this organization the other day what I consider a gem. It was something from the External Intelligence Services of one of our GATT/WTO Members. It was a manual on how to carry out sabotage in enemy territory. It is in our archives so this is not made up. Most of it dealt with how to wreck infrastructure and industrial capacity. But one section dealt with how to undermine organizations."

And here is what it says: "If you want to undermine an organization, make speeches, frequently and at great length; when possible, refer matters to committees for further study and consideration; refer back to matters decided upon at the last meeting and attempt to re-open them; advocate "caution" and urge others to avoid haste; and, raise questions about the propriety of any decision. I do not know if any of these rings true to any of you but it rings very true to me coming here. So, if we do not want to play into the hands of this intelligence advice, we need to use this opportunity to really show that we are building up the organization and not undermining it."

In short, the coming days may witness some rather "dangerous" trends, that may result in the developing countries being completely marginalized and that the principle of consensus-based multilateral decision-making in an inter- governmental organization could be eliminated once and for all.