The WTO Ministerial Conference MC12: A WTO response to the COVID-19 Pandemic
WTO members are engaged in concerted efforts to agree on MC12 deliverables in all areas of negotiations. Some of the priority areas include an outcome that will deliver a realistic and practical response to the COVID-19 pandemic. The agenda for MC12 is curated on thematic areas, contrary to previous WTO Ministerial Conferences, which were primarily based on mandated issues. See previous blog on this matter.
WTO members are working towards delivering a meaningful response to the COVID-19 pandemic in several areas that include transparency, export restrictions and prohibitions, food security, trade facilitation, regulatory coherence, intellectual property, transfer of technology, services, and development. Although there is no convergence on most negotiating issues, members have submitted several proposals for possible MC12 outcomes. The issues included in the draft textual proposals are drawn from negotiations in the different WTO committees and negotiating groups. These issues are packaged to respond to the COVID-19 pandemic. Since these are not new issues, it is highly likely that WTO members might still stick to their known positions. Some members of the WTO are of the view that the outcome will be implemented as a response to the COVID-19 pandemic and/or for future pandemics, while some members advance a position that these policy responses should continue to be implemented post COVID-19.
WTO members are still engaged in text-based negotiations on the TRIPS waiver on the issues of scope, duration of the waiver, implementation, and protection of undisclosed information. The main issue of contention is whether the TRIPS waiver is the most effective and most appropriate way to respond to the pandemic and whether it is the most equitable way to address the distribution of vaccines and medicines to fight against COVID-19. Even though members have agreed to engage in text-based negotiations, not much progress has been achieved.
All WTO members acknowledge the need for WTO reform that addresses the interests of all members. Developing countries have consistently indicated the need of a reform process that should be open, transparent and inclusive. The main WTO Ministerial outcome document deals with the key issues that reflect the interest of members on the reform process. The interests are to endorse the rules based multilateral trade system; reaffirming the principles and objectives set out in the Marrakesh Agreement that established the World Trade Organization; and underscoring the relevance and critical role of international trade and the WTO. For developing countries, it is crucial that the reform re-affirms Special and Differential Treatment (S&DT) as an integral part of the WTO and its Agreements. A number of submissions discussed in the past, covered proposed improvements to the functioning of the WTO. These included the dispute settlement function; the negotiating and rule making function; and the monitoring function of the WTO. The reform outcome document recalls and reaffirms a number of past Ministerial Decisions, instruct WTO members to implement, and report to the next session of the Ministerial Conference. Several issues discussed under the Joint Statements Initiatives (JSIs) are recognised and encouraged. However, no convergence has emerged on whether certain issues should be included in the reform output document. Further disagreements are evident on the manner in which certain outcomes should be packaged. These disagreements include the intended objectives of the issues proposed for inclusion in the WTO reform programme. An agreement on the reform output document would mean, substantial changes to the rules enshrined in the Marrakesh Agreement, which translates to a new form of multilateralism that formalises and institutionalises the JSIs at the WTO.
Although there are several issues on the table under the agriculture negotiations, the Ministerial draft-text is narrowed to three deliverables namely agricultural reform, the food security decision, and the decision on the exemption of World Food Programme (WFP) food purchases from export restrictions. The deliverable on the WFP exemptions from export restrictions underscores that these purchases shall not jeopardise the food security of the countries where the procurements are made.
The food security draft decision is a response to the disruptions caused by the ongoing conflict in Ukraine on global supply chains, leading to soaring global food prices and food insecurity in many developing countries. In this regard, there is due recognition that developing countries that are hit hard by these circumstances should be allowed to use existing flexibilities to cushion against the impact of the war in Ukraine.
The joint proposal on Public Stockholding for food security purposes (PSH) submitted by G33, ACP and Africa Group seeks an outcome that allows members to reduce the quantity of support by redefining “eligible production” to cover only the amount of stock that is procured, instead of the amount that could potentially be bought. This is subject to proving that the stock falls under PSH. It also proposes that the old external reference price should be revised to be an average of the past five years, which considers inflation. Brazil’s counter proposal on PSH seeks to limit the countries that use the domestic support in stockholding programmes to those that depend on food imports or are not major exporters. Additionally, the Brazil proposal on PSH seeks to impose stringent transparency obligations.
During the period of the pandemic, a number of regulatory changes introduced in the services sector were either facilitating or restricting international trade. WTO members are encouraged to enable trade in services by sustaining the implementation of trade facilitating measures. On E-commerce, an extensive programme of work that will address developmental issues identified by members is expected. This should also include the main issues on the moratorium regarding the imposition of customs duties on electronic transmissions. However, there is no agreement on the draft-text for MC12 yet.
One of the priority areas for MC12 is an outcome on fisheries subsidies. The focus of the negotiations in this area is the prohibition of certain forms of fisheries subsidies, which contribute to overcapacity and overfishing. Additionally, these negotiations seek to eliminate subsidies that contribute to illegal, unreported, and unregulated (IUU) fishing and to restrict introduction of new subsidies. Provision of appropriate and effective special and differential treatment for developing and least developed countries is an integral part of the fisheries subsidies negotiation.
Similarly, to the other areas of negotiations, the Draft Ministerial Decision on Fisheries Subsidies is fraught with divergent views on some of the key areas of negotiations. Developed countries which provide huge fisheries subsidies such as the EU, United States, Canada, China, Japan and South Korea seek to retain these harmful subsidies. Developing countries on the other hand have proposed capping of subsidies. Developing countries are also seeking an extension of specific flexibilities for artisanal fishermen to continue their fishing activities till the Exclusive Economic Zone of 200 maritime miles. Additionally, developing countries have proposed an appropriate and effective special and differential treatment for a period of 25 years to ensure policy guidance for their fishermen. Furthermore, some developing countries are questioning the format of the negotiations into small group meetings, which excludes other members of the WTO.
Brazil has introduced a new issue; to revise the frequency of WTO ministerial meetings from meeting at least once every two years as provided for in WTO Agreements to annually. This proposed revision is argued to provide certainty, oversight, guidance, and a political drive for ministers in the ongoing negotiations, to deliver solutions as new challenges arise. There is no agreement on this proposal yet.
While some countries support an ambitious MC12 outcome that delivers on key areas of Trade and Health including IP, WTO Reform, Fisheries; and Agriculture, others are of the view that the priority for the WTO should be a response to the pandemic, with the TRIPS Waiver as an integral part of the outcome. For most developing countries, the priority issues are the fisheries and development issues and transparency and inclusion in consultations. Supporters of an outcome on PSH are adamant that MC12 is an opportunity to achieve a long overdue, permanent solution on PSH.
While the WTO is making some progress on a realistic and practical response to the pandemic, it is highly unlikely that the issues are ripe for harvest. A common understanding among WTO members of a realistic and practical response to the pandemic has not yet been achieved.
Some members of the WTO are of the view that the response to the pandemic will be implemented also for future pandemics, while others hold the view that the response measures should be sustained and implemented indefinitely post COVID-19. The approach and elements of a response should be practical and commonly understood, in order to be adopted and implemented seamlessly.
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