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Info Service on WTO and Trade Issues (Mar22/23) Geneva, 29 Mar (D. Ravi Kanth) – Even as Russia’s war against Ukraine continues to show no signs of abating at this juncture, members of the World Trade Organization (WTO) have tentatively endorsed the dates for their 12th ministerial conference (MC12) for 12-15 June, said people familiar with the development. At an informal General Council (GC) meeting on 28 March, the new GC chair, Ambassador Didier Chambovey from Switzerland, suggested the dates for MC12, indicating that he held bilateral meetings with 42 member- countries, including 12 group coordinators and one member (Russia). MC12 will take place entirely at the WTO headquarters (in Geneva), he suggested. Ambassador Chambovey said that MC12 is going to be a streamlined, business-like conference. While members broadly endorsed the GC chair’s suggestion, a final decision on the dates needs to be approved at a formal General Council meeting, which is now scheduled to take place on 9-10 May. Significantly, at a time when the developed countries and some developing countries maintained that the current situation is not “business as usual”, it is unclear whether Russia’s trade minister and his team from Moscow will be able to attend the meeting due to the apparent non-neutral status adopted by the host country Switzerland, said people, who asked not to be quoted. When asked whether the Russian minister and his team will be able to attend the meeting, a trade official said “we don’t know”, adding that the question should be posed to Switzerland, the host country of the WTO. At the informal GC meeting, more than a dozen countries, including the new US trade envoy to the WTO, severely chastised Russia for its violation of the sovereignty and territorial integrity of Ukraine, raising sharp concerns over Russia’s escalating military actions against the country. The new US trade envoy to the WTO, Ambassador Maria Luisa Pagan, made her first intervention at the informal GC meeting, saying that the circumstances that prevailed when her nomination was considered by the US Senate appear to have changed with the onset of Russia’s war against Ukraine, said people, who were present at the meeting. The United Kingdom, Canada, Norway, the European Union, and Australia among others admonished Russia for its continued violation of international treaties and rules in its war against Ukraine. The developed countries claimed that it cannot be “business as usual” with Russia being present in these meetings, said people familiar with the development. Russia, however, criticized these countries protesting against Moscow by likening them to the ancient Roman Senate, which was historically famously known for giving political statements rather than addressing the problems encountered by people in its territory. Russia said that it wants a successful outcome at MC12. GC CHAIR’S CONSULTATIONS At the informal GC meeting, Ambassador Chambovey delivered his first statement, as the new GC chair, about his recent consultations on a range of issues, including the WTO’s response to the pandemic, said people familiar with the discussions. Ambassador Chambovey suggested that the WTO’s response to the pandemic would have two components such as the TRIPS waiver and trade measures that include a range of trade liberalizing aspects such as the removal of export restrictions, regulatory coherence and cooperation, lowering of tariffs, services, transparency, as well as collaboration and dialogue with international institutions among others. The former GC chair, Ambassador Dacio Castillo from Honduras, who has been appointed as the new facilitator to oversee the discussion on the trade-related aspects of the WTO’s response to the pandemic, is expected to hold consultations on the trade-related issues in the WTO’s response to the pandemic. Aside from this major issue, there are a host of other unresolved issues including fisheries subsidies, the permanent solution for public stockholding programs for food security, as well as issues such as the moratorium on imposing customs duties on electronic transmissions, the legal status of the informal Joint Statement Initiatives (JSIs), and so on. Significantly, there is no formal notification yet on the so-called draft Intellectual Property (IP) text from the US, India, and South Africa, the trade official said. South Africa is understood to have said at the meeting that the IP issue is being considered in the capital, the official said. Even before there is an agreement on the TRIPS issue, some members including the European Union and members of the Ottawa Group of countries led by Canada, and Brazil, are already attaching conditions to the approval of the draft IP text with other areas such as Trade and Health, agriculture, and even fisheries subsidies, said people, who asked not to be quoted. Cameroon, which is the coordinator of the African Group, welcomed the appointment of Ambassador Castillo as the new facilitator on the WTO’s response to the pandemic, and “we welcome his report.” It expressed the African Group’s “strong support to the urgent need for the waiver geared to ramp up and diversify production and distribution of all COVID-19 related medical products to address the existing inequitable access our Continent continues to face.” The African Group commended the “DG as well as all Parties for all efforts in this regard.” Commenting on the DG’s concerns about food security, Cameroon said that “thirty-five African countries are dependent on food imports from the Black Sea region.” According to Cameroon, “the rapid increase in food prices, and the disruptions in global supply chains, may lead to a severe food crisis and pose a serious risk to our Continent.” Although the issue of the food crisis “has been partially addressed by some relevant WTO bodies during their session last week such as the Committee on Agriculture,” it remains a grave concern, Cameroon said. The African Group reiterated its “longstanding position in support of a level playing field that will enable Africa to fully take advantage of its resources in the domain of agriculture.” Jamaica, on behalf of the ACP (African, Caribbean and Pacific) group, and Chad, on behalf of the least developed countries (LDCs), also expressed their concerns over the emerging food crisis in their member-countries. DG ON FOOD SECURITY At the GC meeting, the DG highlighted the growing food crisis, particularly in the two areas of cereals (wheat) and fertilizers, as well as other items such as sunflowers and barley that are grown in the Black Sea region. She cautioned that “concentrating sourcing and production at home, while understandable, could also create new vulnerabilities and may not be the best risk management strategy.” According to the DG, the war in Ukraine dealt a major blow “to the global economy still recovering from the impacts of the pandemic and has raised the spectre of food shortages in countries dependent on Ukraine and Russia for imports of key staples like wheat.” She said prices of key commodities have risen by 20-50% between January and March. The DG provided figures of the unfolding food crisis in these items due to the war between Russia and Ukraine, and the sudden jump in prices of cereals and even fertilizers. Ms Okonjo-Iweala underscored the need for surplus countries like the United States and Canada to release their stocks of wheat and other items like cereals, oils, and grains into the international market. She suggested that the knock-on effects of these unforeseen developments should not be allowed to become a full- blown crisis, said a trade official, who preferred not to be quoted. The DG said that 12 WTO members have imposed export restrictions on food products to date, though she did not mention the names of these countries. Ms Okonjo-Iweala also called for the lifting of export restrictions as they could worsen the food crisis. The DG said that the Russia-Ukraine war “is not the time to retreat inward … This is the time to stress the importance of multilateralism, global solidarity and cooperation.” She said that countries such as the United States, Canada, Australia, Argentina, and France could increase wheat cultivation while others such as China, Germany, Morocco, Saudi Arabia, Egypt and Nigeria could increase the global supply of fertilizers. The DG touted the benefits of trade facilitation measures, saying that efforts should be made to allow the UN World Food Programme (WFP) full access to humanitarian purchases. Reflecting on her comments, a member said the WFP’s procurement of cereals is largely from agri-multinationals like Cargill. The DG seems to have failed to recognize that countries can do little in releasing their stocks, as they are done by private operators, the member said, preferring not to be identified. “What she may have done at the World Bank cannot be repeated at the WTO which is a rules-based organization,” the member said. The DG along with the UK and other G-7 countries seem determined to address the food crisis along with the issue of food security at a special meeting at the WTO on 24 April. US CONTINUES TO BLOCK APPOINTMENTS AT AB Meanwhile, in a separate development, for the fifty-second time, the United States, at a meeting of the WTO Dispute Settlement Body (DSB) on 28 March, blocked a joint proposal from 123 members that called for the start of the selection process to fill seven vacancies at the Appellate Body (AB), which has been made dysfunctional by Washington. Even though the US concerns over the Appellate Body’s functioning have been addressed by former facilitator, Ambassador David Walker from New Zealand, the US seems to be pursuing a strategy to bury the Appellate Body once and for all, said people familiar with the development. Worse still, the US justified its stand on blocking appointments to the AB on grounds that it continues to have “systemic concerns” with the AB. The US seems to be in no mood to revive the AB, as Washington suggested at the DSB meeting that WTO members must undertake fundamental reform if the dispute settlement system is to remain viable and credible. The US said that it wants the dispute settlement system to better support the WTO’s negotiating and monitoring functions. However, the US has so far not tabled any proposals, in the absence of a two-tier dispute settlement system with the Appellate Body being the highest adjudicating body at the WTO. Despite the US opposition to the AB, around 20 members reiterated the importance of the WTO’s two-tiered dispute settlement system to the stability and predictability of the multilateral trading system. Several members said this issue is a top priority for reform of the organization, suggesting that the continued impasse over the AB was causing both commercial harm to members and systemic harm to multilateral trade. At the DSB meeting, Ukraine again inveighed against Russia’s assault on its sovereignty and territorial integrity, citing the enormous humanitarian and economic consequences resulting from its action. Several members including Georgia, the US, the United Kingdom, Canada, the European Union, Norway, Korea, Japan, Australia, New Zealand, and Chinese Taipei concurred with Ukraine, denouncing Russia’s attack as a violation of international law and Ukraine’s sovereignty, and called on Russia to end its aggression. Russia said that the WTO was not the forum to address political issues and that the organization’s purpose was to promote economic development and raise living standards. Russia said that members must focus on resolving the existing problems that the organization is currently facing, instead of creating new problems unless a member has the intention of continuing to destroy the multilateral trading system.
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