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

Russia-Ukraine conflict casts a pall at WTO, raising doubts over MC12
Published in SUNS #9523 dated 28 February 2022

Geneva, 25 Feb (D. Ravi Kanth) -  The sudden flare-up of Russia's military conflict with Ukraine seems to have cast a pall over the World Trade Organization on 24 February, raising doubts as to whether the WTO's 12th ministerial conference (MC12) could be held if current developments continue to worsen in the coming days, said people who asked not to be quoted.

Even though there are more than three months to go before MC12 reconvenes in the week of 13 June, the continued precipitation of the tensions, including the magnitude of economic and other sanctions being imposed on Russia, could throw "a spanner in the works" in the run-up to the ministerial conference, said several members, who asked not to be quoted.

On the second day of the two-day General Council (GC) meeting on 24 February, the United States and its allies apparently criticized Russia's violation of Ukraine's sovereignty as well as international law.

The US along with the European Union, Canada, Norway, the United Kingdom, Japan, and Australia raised their specific concerns about the ongoing developments between Russia and Ukraine, particularly the violation of Ukraine's sovereignty.

At the meeting, Georgia apparently directly criticized Russia for its "special military operation" in Ukraine, said people familiar with the development.

In response to the above concerns, Russia apparently reminded members that the WTO is not the forum to discuss this issue.

Such issues were apparently never raised until now, said people, who asked not to be quoted.

Surprisingly in the past, when violent regime change took place such as in Iraq in 2003, it appears that none of the Western countries raised the issue at the WTO, said a person, who asked not to be quoted.

GC MEETING ON 24 FEBRUARY

As the gavel for chairing the WTO's General Council was passed onto the new chair, Ambassador Didier Chambovey from Switzerland, more than 20 members took the floor to praise the outgoing GC chair Ambassador Dacio Castillo from Honduras for his distinguished role in making the negotiating processes transparent and inclusive.

India said Ambassador Castillo set a new benchmark for conducting negotiations, suggesting that it should serve the chairs of the negotiating bodies well in the coming days, said people, who asked not to be quoted.

Countries from both sides of the aisle said the GC chair played an exceptional role, which is rarely the case in the recent past, said one member, who asked not to be quoted.

Sri Lanka and several other countries again raised the issue that Ambassador Castillo should continue to facilitate work on the two most important issues, namely the preparation of the outcome document for MC12 and the WTO's response to the pandemic in the run-up to the ministerial conference in mid-June, said people, who asked not to be quoted.

However, it remains to be seen what the new GC chair Ambassador Chambovey would do in the coming days, said people, who preferred not to be quoted.

DIFFERENCES CONTINUE TO PERSIST

On the second day of the GC meeting, key members continued to spar over several issues including the temporary TRIPS waiver; a proposal by the coordinator of the least-developed countries (LDCs) on an interim arrangement on LDC graduation, and on trade-related challenges of the LDCs and the way forward; a proposed sanitary and phytosanitary declaration for MC12; the continuation of the moratorium on imposing customs duties on electronic transmissions; the legal status of the informal Joint Statement Initiatives (JSIs); a statement issued by a group of countries on immediate action to support the multilateral trading system in the preparation for a successful MC12; and a proposal on strengthening the WTO to promote development and inclusivity.

On the temporary TRIPS waiver, the positions of the 65 co-sponsors of the waiver and a handful of opponents to the waiver remained unchanged for the umpteenth time, said people who asked not to be quoted.

The temporary TRIPS waiver, which has been supported by parliamentarians, former leaders, Nobel Laureates, and more than 100 civil society organizations, including the Third World Network, seeks to suspend certain provisions in the TRIPS Agreement relating to copyrights, industrial designs, patents, and protection of undisclosed information to ramp-up the production of diagnostics, therapeutics, and vaccines to combat the COVID-19 pandemic.

The US reiterated its position on the TRIPS waiver and its opposition to any likely termination of the current moratorium on imposing customs duties on electronic transmissions. The US appears to have said that it would support the waiver for vaccines, said people familiar with the development.

China, which is a strong supporter of the former facilitator Ambassador Walker's political statement on the WTO's response to the pandemic and proposed actions, said that "significant issues, such as IP and food security that people have been suffering from should be an integral part of our response to the pandemic."

Lamenting about the delay in not reaching an outcome in the IP area, China said "in our view, the most important thing now is to show genuine political will and put the moral obligation over the commercial interests."

Commenting on the TRIPS waiver and the EU proposal on compulsory licensing, China said they "constitute an integral part of the TRIPS contribution to the pandemic response."

China said "these two proposals, with the common aim of promoting the equity of production and distribution of vaccines, are complementary rather than contradictory to each other and should be explored in parallel."

However, a large majority of developing countries supported the TRIPS waiver, while the EU touted its proposal on compulsory licensing. A handful of countries continued to oppose the TRIPS waiver proposal.

Meanwhile, several countries including Switzerland, Japan, the United Kingdom, and Russia again expressed their concerns over the lack of transparency in the small-group discussions among the United States, the European Union, India, and South Africa on the TRIPS waiver, said people who asked not to be quoted.

LEGAL STATUS OF JSIs CHALLENGED

At the GC meeting, India, South Africa, and Namibia among others sharply challenged the legal status of the Joint Statement Initiatives (JSIs) on digital trade, investment facilitation, disciplines for micro, small, and medium enterprises (MSMEs), trade and gender, and climate change related trade initiatives.

The three countries graphically showed how the JSIs allegedly violated the core provisions of the Marrakesh Agreement.

The provisions allegedly violated by the JSI proponents include: (1) Article II.1 which states, "the WTO shall provide the common institutional framework for the conduct of trade relations among its members ..."; (2) Article II.3 which states, "the agreements and associated legal instruments included in Annex 4 (hereinafter referred to as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that have accepted them, and are binding on those Members" and that "the Plurilateral Trade Agreements do not create either obligations or rights for Members that have not accepted them"; (3) Article III.2 which states that the WTO shall provide the forum for negotiations among its members concerning the multilateral trade negotiations; (4) Article IX concerning decision-making; and (5) Article X concerning amendments.

So far, the proponents of the JSIs have remained unsuccessful in establishing the case that the JSIs are not inconsistent with the above provisions, said people, who asked not to be identified.

Yet, the proponents maintained at the GC meeting that the JSIs were strongly backed by around 80 countries, regardless of the provisions in the Marrakesh Agreement, advancing what seems to be a "brute majority" argument that doesn't appear to be unduly concerned about the rules in a rules-based organization, said a person, who asked not to be quoted.

India and South Africa challenged the very legal basis of these initiatives which seemed to have violated the core provisions of the Marrakesh Agreement, said people who asked not to be quoted.

SENIOR WTO OFFICIALS COME UNDER THE SPOTLIGHT

At the end of the GC meeting on 24 February, India apparently drew attention to its revised joint proposal with Cuba and the African Group (WT/GC/W/778/Rev.4) on "strengthening the WTO to promote development and inclusivity", suggesting that it requires the chairpersons as well as the WTO Secretariat, particularly the senior staff, to have an obligation to act impartially in accordance with the rules of procedure.

Without mentioning any names, India apparently said that, in the recent past, it had observed that some staff members are conducting themselves in a manner which appears to be totally inconsistent with the principles of neutrality and impartiality.

The Indian trade envoy Ambassador Brajendra Navnit apparently said that staff members are required to scrupulously observe impartiality in the exercise of their duties, suggesting that they cannot act like a private person, to take sides or express their personal views and convictions.

As reported in SUNS #9491 dated 13 January 2022, WTO deputy director-general Ms Anabel Gonzalez from Costa Rica put out her blog post on the WTO website expressing her five wishes for 2022 that seemed to have aligned with the demands of the major industrialized countries, said people familiar with the development.

The proposal by India, Cuba, and the African Group on "strengthening the WTO to promote development and inclusivity" has underscored the importance of impartiality and neutrality on the part of the chairs of WTO bodies and the WTO Secretariat, including its staff, particularly the senior staff.

Commenting on recent developments, Ambassador Navnit said India has noticed several instances, wherein some staff members are conducting themselves in a manner which is totally inconsistent with the principles of neutrality and impartiality.

The Indian trade envoy quoted the WTO's Standards of Conduct, "staff members are required scrupulously to observe impartiality in the exercise of their duties. They retain their personal views and convictions, but they do not enjoy the freedom of a private person to take sides or to express their opinion on controversial matters where this may reflect adversely on the WTO or on their status as international civil servants."

India apparently observed that when a staff member is called upon to communicate with the press, the staff member needs to understand that the information is being provided in the name of the WTO and to avoid person references and views, according to people familiar with the development.