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TWN
Info Service on WTO and Trade Issues (Mar26/48) Yaounde, 30 Mar (D. Ravi Kanth) — The United States and Brazil on 29 March failed to reach an agreement on the duration of the e-commerce moratorium at the World Trade Organization’s 14th ministerial conference (MC14) in Yaounde, Cameroon. The two countries could not resolve their differences on the duration of the moratorium, and the two sides will continue discussions in Geneva, said participants familiar with the discussions. The truce reached between the two countries after several hours of marathon bilateral negotiations is, on the face of it, a vindication of Brazilian resilience and determination not to budge on the issue of a duration of more than two years. Meanwhile, the US seemingly suffered a loss of face as it had to climb down from its original demand of a permanent moratorium to a “single-digit” duration, said participants familiar with the meeting. For several hours, MC14 was held up on the final day due to disagreements over the duration of the moratorium on customs duties on electronic transmissions. Brazil apparently insisted that it cannot agree to a duration of more than two years in the face of the seemingly intransigent US position that it has to be more than four years, said people familiar with the development. While several countries, including India, the African Group, and the ACP (African, Caribbean, and Pacific) group, positioned themselves for a duration of four or more years, Brazil stuck to its position that the moratorium can continue only until the next ministerial conference, which is in line with previous decisions since 1998, said participants familiar with the development. Brazil and the US held a bilateral meeting for several hours in the afternoon, but it seemed that the two sides did not budge on their positions, said participants familiar with the discussions. Besides, the hardline positions adopted by the US, which was not willing to accept any demands on agriculture and other issues, appear to have soured the overall negotiations in Yaounde, said people familiar with the development. Initially, on the final day of MC14, the US seemed to have adopted a hardline stance of “my way or the highway” on two moratorium issues: one on customs duties on electronic transmissions and the other on “TRIPS non- violation and situation complaints.” These issues have all along been interconnected since 1998. While the US wants a permanent moratorium on customs duties on electronic transmissions, it apparently told the proponents of the TRIPS moratorium (which require countries not to raise disputes under the WTO’s dispute settlement system on grounds of non-violation complaints) that it will not agree to their demand, said participants who asked not to be quoted. The two moratoriums have been extended on a biennial basis since the WTO’s second ministerial conference in Geneva in 1998. But now, at MC14, the US has changed course so radically that it wants a permanent e-commerce moratorium – a demand that is not acceptable to many developing countries, except Nigeria, said participants familiar with the development. In the face of intense opposition to the permanent moratorium on customs duties on electronic transmissions, the US now said that there should be a ten-year moratorium on e-commerce duties, said participants engaged in the discussions. Behind the scenes, the US apparently pressured the African Group and other countries, stating that it will extend the African Growth and Opportunity Act (AGOA) only if they agree to a permanent moratorium – a stand that was not supported by all African countries, said people familiar with the development. In turn, the African countries, except Nigeria, are insisting on a quid pro quo of four years each for the continuation of the moratorium and the AGOA duty-free benefits to all countries in Sub-Saharan Africa, said participants who asked not to be quoted. A draft proposal prepared by the African Group suggests an extension of the e-commerce moratorium for four years: “We agree to maintain the current practice of not imposing customs duties on electronic transmissions until 30 June 2031.” The African Group apparently conveyed to the US that there should be a four-year extension of AGOA, but the US conveyed that it will not agree to a four-year extension of AGOA, said people familiar with the development. It appears that India was willing to accept a five-year duration for continuing the e-commerce moratorium, while there is no clarity about the duration of the TRIPS moratorium. TRIPS moratorium In a proposal circulated on 28 March, India proposed a draft ministerial statement on the TRIPS moratorium. The draft proposal states: “The Ministerial Conference decides as follows: We take note of the work carried out by the Council for Trade-Related Aspects of Intellectual Property Rights pursuant to our Decision of 2 March 2024 on “TRIPS Non-Violation and Situation Complaints” (WT/MIN(24)/39; WT/L/1194), and direct it to continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1( c) of Article XXIII of GATT 1994 and make recommendations to the 16th Ministerial Conference. It is agreed that, in the meantime, Members shall not initiate complaints of the types provided for under subparagraphs 1(b) or 1( c) of Article XXIII of GATT 1994 in relation to the TRIPS Agreement.” However, the US appears to have made it clear that it will not agree to any extension of the moratorium on TRIPS non-violation and situation complaints -a stand that was apparently supported by the United Kingdom and Switzerland, said participants familiar with the discussions. Hard discussions between the proponents of the TRIPS moratorium and the US took place but the final decision remains unclear at the time of writing, said people familiar with the development. In all probability, India and other proponents of the TRIPS moratorium could agree to a duration of four years on the e-commerce moratorium if the same is agreed to on the TRIPS moratorium, said participants familiar with the positions of the two sides. In another TRIPS-related issue, four countries – Bangladesh, Colombia, Egypt, and India – issued a “draft Ministerial Declaration on TRIPS for Development” that calls on the TRIPS Council “to undertake and finalize its first review under Article 71 on the implementation of the TRIPS Agreement.” The draft said, “pursuant to paragraph 19 of the Doha Ministerial Declaration, we instruct the Council for TRIPS to expedite ongoing work to examine the relationship between the TRIPS Agreement and the Convention on Biological Diversity, and the protection of traditional knowledge and folklore.” It called upon “the TRIPS Council to examine how the TRIPS Agreement could facilitate transfer and dissemination of technologies to developing countries including LDCs.” More importantly, the four countries emphasized that the TRIPS Council should “examine the TRIPS Agreement, the Doha Declaration on the TRIPS Agreement and Public Health of 2001 and the Ministerial Decision on the TRIPS Agreement of 2022, to review and build on the lessons learned during COVID-19, with the aim to address the concerns of developing countries including LDCs in the context of health emergencies including pandemic.” The four countries said “in undertaking this work, the TRIPS Council shall be guided by the objectives and principles set out in Articles 7 and 8 of the TRIPS Agreement and shall take fully into account the development dimension and shall provide a report on the progress made, including any recommendations, to the Ministers at the 14th Ministerial Conference.” +
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