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TWN Info Service on WTO and Trade Issues (Feb22/24)
25 February 2022
Third World Network

Call for former GC chair to oversee talks on WTO response to pandemic
Published in SUNS #9522 dated 25 February 2022

Geneva, 24 Feb (D. Ravi Kanth) -  The members of the World Trade Organization (WTO) on 23 February agreed to schedule the WTO's 12th ministerial conference (MC12) in the week of 13 June, paving the way for what is likely to be a "make-or-break" meeting on several consequential issues, including the trade body's much delayed response to the pandemic, said people familiar with the development.

Several other issues where significant gaps continue to persist among the members include a proposed agreement on fisheries subsidies, the permanent solution for public stockholding programs for food security, the continuation of the current moratorium on levying customs duties on electronic transmissions, proposed WTO reforms, and the legal status of the Joint Statement Initiatives (JSIs) on digital trade, investment facilitation, disciplines for micro, small, and medium enterprises (MSMEs), domestic regulation on trade in services, and trade and gender.

At a formal General Council (GC) meeting on 23 February, the outgoing GC chair, Ambassador Dacio Castillo from Honduras, proposed that the much-delayed MC12 be held in the week of 13 June.

Members endorsed the GC chair's proposal, though the actual date is yet to be decided.

The GC meeting, coinciding with the completion of the first year of tenure of Ms Ngozi Okonjo-Iweala as the Director-General, has apparently revealed that the level-playing field of negotiations has been made much more uneven and rougher, said people, who asked not to be quoted.

The Northern countries led by the European Union, the Ottawa Group of countries led by Canada, as well as the United States, appear to have placed roadblocks in advancing the mandated Doha Development Agenda (DDA) issues, particularly on agriculture as well as on fisheries subsidies, said people, who asked not to be quoted.

GC CHAIR'S BRIEF REPORT ON RESPONSE TO PANDEMIC

At the meeting, the outgoing GC chair Ambassador Castillo presented a brief report on his consultations with members on the issue of the WTO's response to the pandemic.

He said that "throughout 2021, including after the postponement of MC12, Members continued to strongly support the delivery of a credible, balanced, meaningful and holistic multilateral WTO response to the pandemic."

He mentioned the draft ministerial declaration as well as the draft Action Plan on pandemic response, preparedness and resilience, issued by the former facilitator on the WTO's response to the pandemic, Ambassador David Walker from New Zealand.

Ambassador Castillo provided an account of the meetings he had held with members in various configurations since 26 November 2021, suggesting that it was evident that "members wished to continue working towards a credible WTO response to the pandemic."

He emphasized that "progress on the TRIPS Waiver was key to a credible, balanced and holistic response to the pandemic."

The GC chair said he "consulted on the request to hold a Ministerial Conference dedicated to the WTO pandemic response as had been proposed by the delegation of India and also how to move our pandemic response work forward."

Following his consultations, the GC chair said that "three things were apparent: (i) Members' willingness to continue this work in tandem with the process in the TRIPS Council, (ii) the need for a pragmatic approach - building on the body of work done last year, and (iii) the importance of ensuring transparency and inclusiveness."

He said somewhat wittingly that he offered the "Castillo Cocktail", implying meetings in different configurations including in a representative group. The work was focused on "the themes identified in the Facilitator's text to ascertain Members' shared objectives on those themes, verify if those objectives had been reflected in the text, whether improvements were needed, if so, how, and whether new themes needed to be added."

Ambassador Castillo drew attention to "a compilation of Members' views on each topic grouped with all of the paragraphs in the Facilitator's Text under the relevant headings."

He said "while Members all agree on the need for a meaningful WTO response to the pandemic and to build resilience for future ones, this process revealed that the Castillo Cocktail needed a re-calibration of ingredients."

Against this backdrop, particularly for a productive discussion to take place, the GC chair said "members needed to first arrive at a common understanding of the objective, what constitutes a WTO Response and how to collectively act."

"In other words," he said, "the significant difference amongst the membership not only with regard to the coverage, but how and on what basis a collective response should be built needs to be resolved first."

Recalling the "strategic pause" that was called in the discussions on the response to the pandemic on 3 February, the chair said that he reconvened the meeting of the Representative Group on 17 February to hear members' views.

Ambassador Castillo said that he was "heartened to hear that most Members continue to prioritize a prompt, meaningful, holistic, and balanced WTO response to the pandemic."

The chair maintained that "the pause has been useful," adding that "while we are yet to concretely conclude this process, Members and the Secretariat did not stand still during this two-year period."

Ambassador Castillo had created the facilitator process on the WTO response to the pandemic last year following an apparent tension with the Director-General Ms Ngozi Okonjo-Iweala who had tasked the trade envoys of Singapore, Jamaica, and South Africa to work on the same issue, said a person, who asked not to be quoted.

Notwithstanding this tension, the GC chair said "the Director-General has also done an enormous amount of work - reaching out to vaccine manufacturers, working with other international organizations and with Members at different levels and configurations."

The GC chair said that "all these efforts are testament to your determination for the WTO to credibly respond to this and future pandemics."

But he grimly warned that "the pandemic has been with us for nearly two years" and "lives have been lost and livelihoods seriously impacted."

He said "no region of the world has been immune," arguing that "now, while one cannot predict with certainty the evolution of the pandemic in the next few months, some of you noted during the Representative Group meeting last week, that some countries have started to lift their restrictions - which is a positive sign."

Ambassador Castillo said some members cautioned about "the legitimacy of the value added with a possibly late WTO Response if we do not act now."

He said that "although we still have significant gaps to bridge, I hope that today, all of you can recognize that we are much closer to a multilateral outcome than you probably believe," suggesting that "this is how I see it."

The outgoing GC chair said he had "already discussed this matter with my successor, Ambassador Chambovey," calling on members to "go back to the principle of solidarity that united us to work on a multilateral pandemic response and act together to deliver that comprehensive multilateral pandemic response that the world has been waiting for."

MEMBERS COMMEND GC CHAIR FOR INCLUSIVE DISCUSSIONS

Several members, including Sri Lanka and the African countries, praised the GC chair for his transparent and inclusive role in negotiating on the WTO's response to the pandemic and the outcome document for MC12.

In fact, these countries pressed for his continuation as the facilitator for overseeing the difficult work on the WTO's response to the pandemic, a decision that will be taken by the incoming GC chair Ambassador Didier Chambovey from Switzerland in consultation with members, said members, who asked not to be quoted.

Apparently, some European countries are making efforts behind the scenes to ensure that Ambassador Castillo is not given the task of overseeing the process on the WTO's response to the pandemic.

During the discussion on the GC chair's report on the WTO response to the pandemic, several members highlighted the importance of a robust TRIPS component, particularly the temporary TRIPS waiver as co-sponsored by 65 countries.

The European Union stuck to its position on utilizing the existing flexibilities in the TRIPS Agreement, touting its own proposal relating to the use of compulsory licensing, said people, who asked not to be quoted.

The Ottawa Group of countries led by Canada made a strong pitch for ensuring that the draft ministerial statement prepared by the former facilitator, Ambassador David Walker from New Zealand, should remain as the basis for concluding an agreement on the WTO's response to the pandemic.

However, many other members, including India, said Walker's draft text is not balanced and the sharp differences over the facilitator's draft text will not augur well for arriving at an agreement on the WTO's response to the pandemic, said people, who asked not to be quoted.

When this writer asked at a press conference whether Walker's draft text and the draft text issued by the chair of the Doha agriculture negotiations, Ambassador Gloria Abraham Peralta from Costa Rica, have caused a setback on making progress in these two important areas, the WTO spokesperson Keith Rockwell said "no comment".

At the GC meeting, Switzerland, which had earlier criticized the small-group consultations among four members for lack of transparency and inclusiveness, said that it has a large number of pharmaceutical manufacturers with IP rights, arguing that it deserves a place in the small-group consultations, said people, who asked not to be quoted.

Many countries, especially India, said the permanent solution for public stockholding programs for food security (PSH) must be treated as a standalone item at MC12, a call that was opposed by several other countries, said people who asked not to be quoted.

DG'S REPORT

As the chair of the Doha Trade Negotiations Committee (TNC), the DG issued a brief report arguing that the postponement of MC12 "does not change the underlying reality on the ground that the people we serve need a WTO that delivers results" and "we must do so - and soon."

Ms Okonjo-Iweala said that she would only "convene a TNC/HoDs meeting once I had the sense that work was substantially advancing," acknowledging that "despite continuing consultations led by the Chairs of the Rules and agriculture negotiations, my sense is that work in negotiating bodies has been advancing slowly since the postponement of MC12."

On the fisheries subsidies negotiations, the DG said that "significant progress was made last year in the lead up to MC12 as Ambassador Wills [chair of the fisheries subsidies negotiations] said."

However, the DG's assessment of the work done on fisheries subsidies apparently did not reflect the continued divergences among members on several issues such as the disciplines in the overcapacity and overfishing pillar, territoriality issues, non-specific fuel subsidies, and special and differential treatment among others.

The DG claimed that the draft text before the postponement of MC12 was sent "to Ministers as a basis for finalizing the remaining gaps."

"Since then, there have been some indications that we may risk backsliding on some matters where we had already achieved significant convergence," the DG said, adding that "what we need instead of positions re-hardening is for all Members now to genuinely show the maximum flexibility so that we can finally get to the finish line."

She said "what we need now to finally finish these negotiations is a full return to the "can-do" spirit that you all showed in November, just a couple of months ago."

She expressed the fear that "if we miss the boat, we will continue to paint the picture that we cannot do it or we struggle to deliver."

On agriculture, she said, "time is short, and every single day should be used to explore ways to narrow gaps and find potential landing zones."

Commenting further on agriculture, she said "on PSH, in particular, we need to find a solution that strikes a careful balance between the food security and other concerns of the proponents and the concerns of the non-proponents."

"In the other negotiating areas, such as special and differential treatment, while there is nothing new to report, I encourage delegations to work with the respective Chairs to find ways to progress," she said.

Ms Okonjo-Iweala said that "while we have specific agenda items on the TRIPS Waiver and the Pandemic Response," members should deliver a solution.

"So, let me re-emphasize that we should not wait for MC12, whatever date we would agree on, to deliver our pandemic response," the DG argued, suggesting that members are already late.

She touted the work done by herself and the DDG Ms Anabel Gonzalez from Costa Rica in facilitating a process in a small-group format of members to assist in reaching a genuine workable compromise.

The DG said that "as DDG Gonzalez mentioned at the TRIPS Council, this isn't easy, but we intend to continue pushing to get a basis on which the Membership can build something."

In an apparent attempt to assuage the concerns raised by Switzerland about the growing "opacity" of the small- group consultations, the DG said "believe me, on TRIPS, I hear you. I want to repeat. There is no attempt to forget or neglect Members or not involve them or be non-transparent. Any framework we put together will be brought to the TRIPS Council under Ambassador Sorli's Chairmanship and to you for work."

Earlier, the DG had strongly supported the small-group consultations as a way to resolve difficult issues. She had said it would be difficult to resolve the difficult issues in an open setting.

Ms Okonjo-Iweala said at the informal GC meeting on 25 January that "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."

The DG acknowledged the distance to bridge on both the processes, suggesting that "we are still quite far apart."

Commenting on the proposed WTO reforms, she said that "for Members to move forward, we require a candid discussion, at the appropriate time, on your expectations about what WTO Reform means."

She said that members must not fail to capture the work done in the outcome document - "which I hope will not be discarded."

Referring to a discussion in which she had participated with the World Health Organization (WHO) on a panel on vaccine manufacturing and IP issues co-chaired by the German Chancellor Olaf Scholz, the Belgian Prime Minister Alexander De Croo, President Cyril Ramaphosa of South Africa and President Paul Kagame of Rwanda last week in Brussels, she said "it was not an easy session, and the positions of proponents and opponents were very clear and did not change very much."

However, "what was very good for the WTO was the support from Leaders for us to find a workable compromise on IP," she claimed.

She spoke in rather glowing terms that "six African countries would be recipients of technology from the WHO's global mRNA vaccine hubs. BioNTech modular vaccine manufacturing plants will also be set up in several African countries with EU financing of 1 billion dollars of which half a billion is already mobilized through the European Investment Bank. Many thanks to the EU for this support and this effort."

Interestingly, at a time when the small-group discussions are taking place on the TRIPS waiver, it is somewhat unclear as to why Big Pharma, which opposes the waiver, has to be summoned for a meeting at the WTO.

The DG said, "with regard to vaccines, let me inform you that, on 9 March, we will continue our meetings with CEOs of vaccine manufacturing companies and will engage with them on the outstanding issues with respect to the production and distribution of vaccines and the challenges thereof. We will also have a supply chain conference where Members will engage with CEOs of ports and logistics companies to better understand what we can do to ease supply and facilitate better distribution."

She said, "so, as I celebrate my one-year anniversary as Director-General and TNC Chair, let me make one wish to all of you... In all of the areas that you consider urgent and important, let us act and deliver soon."

Without sharing the McKinsey & Company report on the structural review of the Secretariat with members, the DG said the implementation of the structural transformation of the Secretariat has begun, adding that "we have already established a Transformation Unit to oversee the process. We have shared a summary of the timelines, the modalities, and the areas that we would focus on in this process. We will start with defining reward schemes outside of promotions (talent management), improving risk management process (ways of working), and improving procurement process (ways of working)."

"One final update I would like to provide on the Secretariat is with regard to the departure of senior staff in the Languages and Documentation, Human Resources, Council-TNC, Economic Research and Media Divisions and the WTO Medical doctor... These departures arising from termination of contracts and retirements are taking place in a staggered manner until the summer," the DG said.

 


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