The bumpy road to the 12th WTO Ministerial
Written by Priyanka Pandit
Preparations for the 12th Ministerial Conference of the World Trade Organization (WTO), to be held in Geneva from November 30 to December 3, have been underway since the appointment of its new Director General, Ngozi Okonjo-Iweala, in March 2021 . this event, delayed by two years, presents an excellent opportunity to move forward towards the revival of the multilateral trading system which has long suffered from recurrent deadlocks, the weakening of its dispute settlement mechanism and the breakdown of trust between the members. Although the Covid-19 pandemic has accentuated the negative impacts on the global trade front and put new pressure on the WTO, many governments still want to integrate into the global economy, as documented in the Global Trade Alert Report , October 2020.
In General Council meetings held by videoconference, many WTO members have expressed their intention to devise a collective strategy to mitigate the impacts of the pandemic. Continued work on the new proposals that will be presented for discussion at the next ministerial meeting reveals that there is no indication that the WTO is losing its relevance in the near future. The revitalization of the WTO, however, is likely to be a long-drawn-out process, and its return to prominence would likely be determined by its ability to reduce vulnerabilities in the supply of essential goods and services and foster recovery.
Discussions on WTO reform have lasted for more than a decade and have repeatedly encountered deadlocks due to disagreements between developed and developing countries on the priorities and modalities of negotiations. On reform proposals, developed countries have argued strongly for “plurilateral” rather than the existing “consensus” principle so that they can continue negotiations with their allies on issues for which a multilateral mandate is lacking. Although the open plurilateral is an effective tool to overcome the multilateral impasse, the growing trend towards a closed and exclusive variant of the plurilateral negotiations led by the United States and Australia has heightened fears of being sidelined from its grip. decision among the smallest and poorest nations of the WTO.
These apprehensions are therefore likely to prevent ongoing plurilateral initiatives, particularly in contentious areas such as investment facilitation and electronic commerce, from achieving concrete results. In addition, the failure of the Doha Round negotiations for more than two decades is likely to cast a shadow over the upcoming Ministerial Conference in Geneva. The G20 coalition of developing countries, which fundamentally changed the terms of the commitment on agriculture, failed to persuade developed countries to undertake substantial cuts in their agricultural tariffs and cut agricultural subsidies. . The reluctance of the US and the EU to meet their agricultural reform commitments made it difficult to find a compromise on general terms at the July 2008 meeting. Power asymmetries prevalent among developed countries and developing countries have further complicated the divide on agricultural issues associated with colonial legacies that have affected individual perceptions of reliability during negotiations. Since then, very little substantive negotiations have taken place on agriculture, at least on domestic support and market access issues.
The general trend now points to a shift away from old problems towards new areas such as trade in services, digital trade and investment facilitation. The shift to a new trade rhetoric gained momentum during the four-year tenure of US President Donald Trump. Trump has aggressively sought to withdraw special and differential treatment (S&D) provisions from many developing countries in the name of creating a fair and equal trading system. He accused the WTO of enlisting China’s economic behavior and blocked the appointment of new judges to the Appellate Body, rendering it dysfunctional.
The S&DT has emerged in particular as a controversial area where the disunity of the southern powers has increased considerably. From agriculture to cotton to fishing, developing countries have failed to agree on a common criterion that would benefit from special and differential treatment and transition periods. In particular, the fisheries negotiations and the difficulty of reaching an agreement on eliminating harmful subsidies that contribute to overcapacity and overfishing were evident at the trade ministers‘ meeting on July 15. Although WTO members have set themselves the goal of concluding negotiations by the 12th At ministerial level, moving closer to an agreement can be tricky due to a multitude of structural, definitional and legal challenges. .
But the most pressing challenge facing the WTO is the difficulty of reaching an agreement on the production and distribution of Covid-19 vaccines, drugs and diagnostics aimed at fostering an inclusive recovery. To address global inequalities in global production and distribution, India and South Africa have called for a temporary suspension of crucial intellectual property (IP) rights related to Covid-19 drugs, vaccines and technologies. The vaccine nationalism adopted by wealthy WTO members has exacerbated the trust gap between the developed bloc and the developing bloc. Although the Biden administration has extended its support for the proposed waiver of intellectual property rights, significant hurdles remain. The United States has not made it clear how it would like to materialize it, and considerable ambiguity exists around the transfer of knowledge and technology needed to manufacture vaccines and other medical products. The EU opposed to the waiver proposal suggested alternative paths that rely on the use of existing TRIPS flexibilities through compulsory licenses.
Despite the disagreements, India pushed for serious engagement in textual negotiations on the temporary waiver of crucial intellectual property rights needed to deal with vaccine shortages. New Delhi, however, remains reluctant to invoke compulsory licenses for the development of Covid-19 vaccines, which the EU and other advanced economies are recommending. In his view, the compulsory licensing route cannot be a global solution or replace the need for a full TRIPS waiver and active partnerships, given the urgency of dealing with subsequent waves of the pandemic. Not only do compulsory licenses require fulfilling onerous conditions, but they also involve complex coordination, especially in the case of vaccine production.
The other issue that India is actively pursuing is to find a permanent solution on the holding of public stocks at the next conference in Geneva. The pandemic has severely affected global food supply chains, posing a major threat to life and livelihoods, especially in the developing world. India therefore strongly advocates for a broader trade and food security agenda and opposes further negotiations on new issues such as e-commerce and investment facilitation at the WTO until ‘that the Doha Round issues are resolved. New Delhi also invokes similar food security and livelihood concerns in the WTO fisheries negotiations, as it advocates the need for S&TD to protect small-scale and artisanal fishers in countries in development.
Certainly, the new Director General Okonjo-Iweala has a formidable task ahead of him which is to break the current rut in the organization and help members reach mutually beneficial agreements at the 12th Ministerial. It could do this by finding the right balance in the negotiating text, which takes into account the different levels of economic development of members and ensures that flexibilities do not compromise environmental sustainability or global commons. What is helpful is that WTO members are now united to end the pandemic and have stressed their commitment to be flexible and to be continuously engaged. Okonjo-Iweala should therefore seize the momentum and work to build trust between members, who are increasingly indifferent to each other’s concerns and to the achievements of cooperation.
The author is an Ashoka-Harvard Yenching Postdoctoral Fellow in the Department of International Relations and Governance Studies at Shiv Nadar University.