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Info Service on WTO and Trade Issues (May22/10) Geneva, 10 May (D. Ravi Kanth) – With less than five weeks left before the World Trade Organization’s 12th ministerial conference (MC12), members remain far apart on the proposed deliverables, the structure and format of MC12, as well as on the outcome document among others, said people familiar with the discussions at a WTO General Council (GC) meeting on 9 May. At the GC meeting, statements made by the WTO Director-General Ms Ngozi Okonjo-Iweala, and the chair of the General Council, Ambassador Didier Chambovey from Switzerland, suggested that things could become clearer at a “stocktaking” meeting to be convened in the first week of June. The discussions at the GC meeting centered on the report by the chair of the Doha Trade Negotiations Committee (TNC) and report by the DG Ms Okonjo-Iweala; implementation of the Bali, Nairobi and Buenos Aires outcomes; work program on small economies; the GC chair’s statement on MC12; the LDC group’s interim arrangement on LDC graduation and trade-related challenges of the least-developed countries and the way forward; and a report by the facilitator on the WTO’s response to the pandemic on trade-related measures. In her statement, the DG, who is also the chair of the TNC, upped the ante on the need for a “responsive WTO” to “meet the many challenges of our time and deliver on the aspirations of the people we serve.” For ministers to take an important step at MC12, scheduled for 12-15 June, the DG said that members “need to properly lay the foundation for this to happen when ministers arrive in a few weeks.” Ms Okonjo-Iweala underscored the need to do preparatory work to make MC12 a success. She said “I recognize that delegations are aware of the limited time left and we need to manage expectations” while acknowledging “the desire to work on all pillars and work towards deliverables in a realistic fashion.” In her statement at an informal TNC/Heads of Delegation (HoD) meeting on 4 May, the DG admitted that “we have a monumental task ahead of us: many gaps and too little time.” Ms Okonjo-Iweala said that “we need clarity on the kind of conference we are planning for”, emphasizing that MC12 will be a “streamlined, business-like meeting” due to the current circumstances and logistical constraints. She wants work on the deliverables to be done before ministers arrive in Geneva. She called for immediate concrete deliverables on food security challenges in both the short run and a framework for the future. The DG said that around 18 countries have clamped down on export restrictions “and trying to do away with them including for a WFP [World Food Programme] waiver.” Even though the DG often repeats the need to serve the people, much of the deliverables that she seems to be pursuing barely address the concerns of the developing and least-developed countries, said a trade envoy, who asked not to be quoted. In his statement at the meeting, the GC chair called for intensifying “efforts to prepare and finalize as much as we can in the weeks ahead before our ministers arrive,” indicating the state of play in negotiating the outcome document for MC12. Ambassador Chambovey said that the DG and he believe that it would be useful to convene a “stocktaking” meeting at the beginning of June in order to structure the agenda of MC12 and to guide the engagement of ministers. At the informal TNC/HoD meeting on 4 May, the GC chair indicated that the outcome document would contain three parts that could constitute an outcome for MC12. Ambassador Chambovey said the proposed approach “would contain: (i) a consensual first part, based on the work undertaken last year under the leadership of my predecessor contained in RD/GC/17/Rev.2; (ii) a second part that could contain a list of decisions, work programmes, separate declarations and reports – as was also reflected in the draft outcome document; and (iii) a third part containing a factual summary by the Ministerial Conference Chair, under his own responsibility, of the discussions by Ministers throughout the Conference.” Given the questions raised by members about the third part dealing with the Chair’s summary, the GC chair said that “taking these different views into account, I therefore believe it is best to focus work on the unfinished aspects of the outcome document on its own merit.” FACILITATOR’S REPORT ON TRADE-RELATED MEASURES The facilitator on the trade-related measures, which are part of the WTO’s response to the pandemic, indicated several difficulties in arriving at a common text. In his statement at the informal TNC/HoD meeting on 4 May, the facilitator, Ambassador Dacio Castillo from Honduras, said “on export restrictions and prohibitions, and transparency – I heard the desire to find language that is acceptable, and efforts are continuing in this regard.” He said “transfer of technology is an important issue for a group of Members for resilience and preparedness.” According to the facilitator, “these Members pointed out that this issue should not be limited to TRIPS. They noted that the Working Group on Trade and Transfer of Technology had not been responsive to their needs, and they were seeking a mutually agreeable way of ensuring transfer of technology to address economic issues – be it, on the digital economy, the environment or on trade and health.” He said that “food security is a critical issue for a number of delegations – not only in the context of the pandemic, but it has become even more apparent in the current situation.” Ambassador Castillo said that he also “heard the suggestion from some that everything on intellectual property should be addressed in the TRIPS Council process, so that the focus of the process that I am facilitating is only the trade policy aspects.” But, “one delegation noted that, in pandemic preparedness, there were IP issues separate to those in the waiver discussions that should be considered in this process,” the facilitator said. Apparently, “one delegation pointed out that the pandemic was now endemic and that other diseases such as HIV/AIDS, Malaria and Tuberculosis should also be addressed.” Ambassador Castillo said, “in terms of the basis for our work, I heard one delegation say that what was needed was something new,” adding that “this delegation made it clear that it could not work on the basis of document 281 – the Walker Text.” However, Ambassador Castillo said, “others pointed out that they did not want to start from scratch. In their view, work should carry on from where it had been left off. Yet others said we needed to start with language that was familiar to everyone, and references were made to documents JOB/GC/278, 281, 292 and 293 as reflections of the body of work done since the beginning of this process.” The facilitator said he heard the suggestion to work on an outcome in three parts: “PART 1: would be factual. This would reflect in a succinct manner the situation of the pandemic and work done by Members and the Secretariat since the outbreak of the Pandemic. A number of delegations noted that it was important to show that Members and the Secretariat had not sat idle since 2020. I have already requested the Secretariat to begin this work. PART 2: would be a reaffirmation of WTO obligations. In this regard, some delegations stressed the importance of having a common understanding on what “not altering rights and obligations” means – noting that everyone should be on the same page before deciding which elements or language would fit here. PART 3: would be forward looking – that is, contain the future work of the WTO to prepare for any future pandemics and other emergencies taking account of lessons learnt. I should note that a group of Members pointed out that there should be a TRIPS trigger mechanism for future pandemics. Two options are on the table. The first would be the “1998 E-commerce Declaration model” – that is, a general mandate to the General Council and relevant bodies to carry out further work within their competencies. The other is the “Action Plan model” currently in document JOB/GC/281.” The facilitator said that he “concluded a number of small group meetings starting with the US, the EU and China,” suggesting “that the US and EU had worked on a streamlined text which was a genuine attempt to find agreeable landing zones to them.” The US-EU text, according to the facilitator, will be “streamlined language on specific areas of interest. In their view, this could be a part of what could fit into a bigger picture – that is, complemented by other Members’ contributions.” The facilitator also noted that the US and the EU would undertake “this effort, [and] their expectation was that others would equally exercise restraint and streamline their ideas.” Apparently, while one delegation “sought further information about the genesis of the three-part approach, overall, delegations expressed willingness to work with this format.” This is, of course, subject to Members being able to comment on the whole text which would be assessed on its content – to ensure a credible outcome, said Ambassador Castillo. The facilitator said “while we are continuing to work towards a credible and effective response, one delegation reminded us that several developing and LDC Members continued to experience challenges such as affordability and access to vaccines – and that the WTO’s response remained an urgent priority for them.” RESPONSE FROM WTO MEMBERS At the GC meeting, the United States apparently spoke on two issues – Washington’s support to the Ukrainian people and on the issue of an interim arrangement on LDC graduation submitted by the LDC group. As regards the proposal tabled by Chad on behalf of the LDC group, several countries such as Bangladesh, Kiribati, Lao PDR, Nepal, Tuvalu, Cambodia, Comoros, Djibouti, Senegal and Zambia, appear to have met the graduation criteria. The LDC group has proposed “an interim arrangement for smooth LDC transition by calling on members granting LDCs unilateral trade preferences, to have procedures in place to extend and gradually phase out their preferential market access scheme for graduated countries over a period of six to nine years.” The LDC group also demanded that “any support package must apply automatically, equally, and unconditionally to all graduated LDCs for a uniform period of time after graduation.” US BLOCKS LDC DEMAND The US blocked the demand made by the LDCs, saying that it is not prepared to agree to a blanket approach, emphasizing that it would only consider it case-by-case. In sharp contrast, China adopted a rather conciliatory approach, saying that “China supports the smooth transition for graduated LDCs,” including “support measures” like extension of preferential market access. Such support measures, said China, “will serve as an impetus for graduating LDCs to set proper transitional strategies and provide a predictable and reliable environment.” The European Union, which is another major donor, said that “we are ready to provide support measures through our schemes.” “In the area of trade specifically,” the EU said, “the aim of the European Union is to focus on how to facilitate and enhance the capacity of countries to assume commitments that foster integration into the global economy.” Brussels said that it is the best way that the WTO can effectively contribute to the integration (of the LDCs.) Cameroon, on behalf of the African Group, said that “we fully support LDCs’ proposal which is in line with the Marrakesh Agreement.” The African Group argued that members “should spare no effort to ensure a smooth transition of graduate(d) LDCs and pave their way to development.” Without referring to the US decision, the African Group said that “we take note of reservations expressed by some members and we think we can overcome these elements through a genuine and open discussion.” Cameroon said that “acceding to the LDC proposal shall have no negative impact on global trade as LDCs account for 1% of global trade.” STRUCTURE AND FORMAT OF MC12 On the structure and format of MC12, the GC chair Ambassador Chambovey, in his statement, suggested that there would a ministerial declaration depending on consensus on the contents, the decisions that would be concluded depending on consensus on part two (of the outcome document), and a likely Chair’s summary if there is no progress on the first two issues. In response to the GC chair’s statement on MC12, several countries pushed back on the issue of part three (of the outcome document) concerning a Chair’s summary. Several members said that the Chair’s summary cannot be considered at this juncture when members remain unclear about the level of progress that would be made in the coming four weeks. CHINA SETS MARKERS FOR MC12 At the GC meeting, China said it hopes that “all relevant information, especially on ministers’ activities, could be circulated as early as possible, as detailed as possible and as certain as possible.” In the meantime, China said it is important “to avoid any surprises; those non-traditional events should be consulted with members before making the decision.” China highlighted the following four points: 1. On the outcome document, China said it would prefer a Ministerial Declaration as far as possible, adding that it remains flexible to have a Chair’s summary on issues that consensus cannot be reached. If it’s a Chair’s summary, then it must (a) not be politicized but focused on WTO business, and (b) it should reflect members’ views in a balanced way. And all members’ voices should be heard. 2. China said that “on closed-door session right after the opening ceremony,” it understands “this is a session for ministers to focus on the multiple challenges facing the multilateral trading system. It can be anticipated that most ministers would like to ask for the floor. We understand it will be TNC meeting style but chaired by MC12 Chair with a 3-minute limitation for each intervention.” 3. On the plenary statement, China said “we still believe in-person format is the best way for ministers as this is an in-person ministerial conference, especially in the current difficult situation.” 4. China also emphasized that “as the world is facing a compounded crisis, it has been noted that trade measures are becoming inward-looking and even politicized,” adding that “growing restrictive measures have severe impacts on economic recovery, supply chain and food security.” Lastly, China said that it hopes “the upcoming MC12 could send a strong signal that WTO members recommit to pursuing open and free markets, and refraining from taking such restrictive measures as far as possible.” In response to the GC chair’s statement on MC12, the EU said it is ready to work on the MC12 outcome document, suggesting that it would work on the three-part approach as outlined by the GC chair. Brussels urged members to focus on parts 1 and 2, adding that it will “consider a potential Part 3 (chair’s assessment) depending on whether it would be necessary, as well as its potential content.” The EU underscored the need to “have a session on the afternoon of 12 June where ministers can express their views on the geopolitical situation.” Brussels acknowledged that “Russia’s illegal and unjustified invasion of Ukraine adds to the complexity of preparing and organizing MC12.” The EU said it will stand by the Ukrainian people and uphold “Ukraine’s sovereignty, independence, and territoriality.” Commenting on MC12, Cameroon, on behalf of the African Group, said MC12 should “enable our Ministers to take stock of the actions taken since the Eleventh Conference in Buenos Aires and to give us guidance for the coming years.” Cameroon expressed its hope “that this Conference will respond to the long-standing expectations of our people in areas such as agriculture, which remains the focus of our concerns.” The African Group said it will not favour an approach “to postpone issues to an uncertain future, issues that have long been on the table.” Cameroon said the African Group “has formulated proposals on public stockholding, domestic support measures, Special Safeguard Measures and SPS rules, [as well as] cotton.” It stressed that “without prejudice to other topics such as the Response to the Covid-19 Pandemic, TRIPS and Fisheries which we will address later, we want to see progress in these discussions on agriculture.” The African Group said “it is essential that we stick to our mandate by focusing on the topics that fall within our competence. It is also imperative that all issues are resolved and that our Ministers do not have to negotiate texts.” “The search for this consensus must be done in a transparent, inclusive manner that is representative of the diversity of the members and the plurality of views that emerge,” the African Group said. WTO’S RESPONSE TO THE PANDEMIC In response to the facilitator’s report on the trade-related aspects in the WTO’s response to the pandemic, China said it “always considers the WTO response to the pandemic as the most pressing issue.” “Reaching a multilateral outcome by MC12 remains our priority,” China said, suggesting that “we take note that members are talking among themselves during the strategic pause.” “Flexibility is needed from all sides,” China said, adding that “otherwise, we can reach nothing.” On the WTO response to the pandemic, Indonesia said that it is “of the view that this is an issue that needs to be concluded soon if we want an outcome that is still relevant.” Indonesia said that it “would like to reiterate again Indonesia’s position to support the proponents and join as a co-sponsor of 278 [JOB/GC/278/Rev. 4].” In a revised restricted document (JOB/GC/278/Rev. 4) submitted on 9 May on the “WTO response in light of the pandemic: trade rules that support resilience building, response, and recovery to face domestic and global crises”, several countries including Bolivia, Egypt, Indonesia, Pakistan, South Africa, Sri Lanka, Tunisia, Uganda, and Venezuela reiterated their longstanding position that WTO response to the pandemic should be “meaningful” and it “needs to be balanced and holistic, which must include the IP aspects as well as food security.” At the GC meeting, Indonesia said the WTO response to the pandemic should consider “the possibility of a trigger mechanism for future pandemics or global emergency so that the WTO could respond in a swift manner.” In its response to the facilitator’s work on WTO response to the pandemic, the African Group lamented that “it has been more than two years since the Covid-19 pandemic surfaced and took about 6 million human lives by the lowest official estimates.” On behalf of the African Group, Cameroon said “while some regions of the world seem to be gradually recovering from the health and economic crisis caused by the Covid-19 pandemic, other countries are seeing a resurgence of infection that is slowing economic activity.” The African Group emphasized that it is “fully committed to a multilateral WTO response to the pandemic, of which the TRIPS waiver is an integral part.” Quoting the WHO Director-General who had pointed out that “inequality in vaccines and inequality in health in general have been the biggest failures of the past year,” the African Group said “according to the African Center for Disease Control, just over 16% of the African population is fully vaccinated, while in high-income countries, over 72% of the population is vaccinated.” Therefore, the African Group reiterated that “any response must adequately address the issue of access as well as diversification and ramping of production of vaccines and other medical products against Covid-19.” Above all, said Cameroon, “our response should also give us an appropriate tool to deal with future pandemics and avoid most of the challenges we faced during the current pandemic.” The African Group noted that “this pandemic has exacerbated the existing systemic disparities in food security in African states, in spite [of the fact] that the continent holds 60% of the world’s untapped arable land.” Cameroon said “unleashing the productive potential of African states is therefore essential for our countries, which have limited resources and cannot cope with the multi-faceted shocks of a major health crisis.” It reminded members of “our long fight for the constitution of public stockholding for food security purposes and the significant reduction of domestic support measures at the de minimis level.” In short, the GC meeting seems to have failed to provide any clear picture on what is in store for MC12 due to sharp differences among the members on several issues.
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