Lingering shadows

After the 11th MC at Buenos Aires, the WTO went into a long period of inactivity. The differences at the 11th MC between developed and developing countries had persisted with no solution seeming in sight. The little progress made at the 9th and 10th MCs was also undone, when developed countries went back on the agreements arrived at in Nairobi on finding a permanent solution to the public stockholding of food grains and the special safeguard mechanism issues in Agriculture. Not only that, there was an attempt to bring in new issues to the negotiating table, such as e-commerce, investment facilitation, gender and employment, and micro, small and medium enterprises (MSMEs). It was therefore not surprising that no WTO Ministerial Conference was convened for five years, and it was only in 2022 that the next MC was held in Geneva in June, 2022.

What happened after the MC 11 in Buenos Aires in 2017?

The period between the MC11 at Buenos Aires and the MC12 at Geneva in 2022 was one of some activity in the WTO headquarters, but no serious engagement on the core issues. One area that came in for much discussion was the Dispute Settlement Mechanism and the Appellate Body (AB) process. The US was not happy with the way the AB process was working and made its intentions clear that it did not want the AB in its current form. The US pointed out that the AB was failing to adhere to the 90-day limit for issuing findings and going beyond the provisions of the Dispute Settlement Understanding. In the year-end General Council meeting in December 2018, the issue was debated, with India, EU and China arguing for restoring the strength of the AB and allowing it to function freely. A proposal was also tabled by India, EU, China and others to this effect.

All through 2019, the WTO remained deadlocked over issues of reforming the AB, and WTO reforms in general. The e-commerce plurilateral gathered some steam, with about 76 countries participating in discussions. In April 2019, there was a mini-Ministerial Conference in India, which was an effort to find a solution to the sticky issues in Agriculture and LDC issues referred to above. This mini-Ministerial also failed to break the deadlock. The period from 2019-2021 was taken up by the Covid pandemic on the one hand and trade wars between China and the USA on the other hand. Under Trump’s administration, “America First’ policies sought to revive manufacturing in the USA and keep Chinese products out by imposing high tariffs. These were clearly WTO-inconsistent, but with the AB and Dispute Settlement process in a moribund state, there was no way this could be adjudicated.

Issues under discussion

The 12th MC was scheduled to be held in Kazakhstan in June, 2020, but could not be held on account of the Covid pandemic. It was ultimately held in Geneva in June 2022, but some preparatory work on subjects such as Agriculture, Fisheries Subsidies, TRIPS and Special and Differential Treatment for LDCs was undertaken by the WTO Secretariat in the run up to the Ministerial.

The 12th MC began with the opening session on June 12 and was attended by Trade Ministers. This was followed by a special session on challenges facing the WTO, where Ministers shared their views on how to protect the rules-based multilateral trade system. The next few days saw the meeting of various negotiating groups, namely Agriculture, NAMA, TRIPS, Services and Rules (where Fisheries Subsidies were discussed). The discussions did not cover the core issues of public stockholding of food grains in Agriculture and tariff cuts under NAMA.

As it turned out, the ‘Geneva’ package included five Ministerial decisions:

* E-Commerce: The current practice of zero custom duties on electronic transmissions would continue till the next Ministerial.

* Fisheries subsidies: This was an important decision taken after years of negotiations. Some of the salient features of the Agreement were: banning of IUU (Illegal, Unreported and Unregulated) fishing and overfished stocks, disciplining of subsidies for fishing on the unregulated high seas which lead to overcapacity and overfishing and a WTO Fisheries Funding Mechanism for assistance to developing countries and LDCs. While this was an important first step, the agreement remained incomplete, because it did not include comprehensive disciplines on subsidies which contributed to overfishing and overcapacity.

* The TRIPS waiver: This was another landmark agreement and an example of collective action in the face of serious global adversity. All countries agreed that vaccine production should take priority over the patent protection granted under the TRIPS agreement. In other words, certain provisions of the TRIPS agreement were waived, which would facilitate vaccine production, exports and distribution all over the world. It was also agreed that compulsory licenses for the production of vaccines, required under the TRIPS agreement, would be waived in the event of future pandemics. However, the agreement fell short of the expectations of the developing countries that were importers of vaccines and medicines to combat Covid.

* Issues related to food security and World Food Programme: An agreement was also reached on an emergency response to food insecurity and exempting World Food Programme (WFP) humanitarian food purchases from export prohibitions or restrictions.

* WTO reform: The outcome document also included a statement that commits countries to work for WTO reform and address the challenges faced by the WTO in its working.

The DG of WTO voiced her happiness about the outcomes, but it was clear that many of the concerns of developing countries were not addressed. In the Fisheries Subsidies agreement, only IUU (Illegal, Unreported and Unregulated) fishing was banned, and subsidies for fishing on unregulated high seas were disciplined. The most important issue of comprehensive disciplines for overfishing and overcapacity were not addressed. Neither were the issues of importance to developing countries, such as exemption of fuel subsidies to poor fishermen and a carve-out for fishermen on grounds of livelihood, included in the Agreement. It was ironic that while most developed countries had contributed to overfishing and overcapacity, developing countries were having to face the burden of the fisheries disciplines.

Even the TRIPS waiver only provided for a temporary waiver of some provisions of the TRIPS agreement and did not cover therapeutics and diagnostics necessary to combat Covid.

Most importantly, the core issues of the Doha Work programme were all but forgotten. Even the agreement to work towards a solution to pressing issues such as public stockholding of food grains, the Cotton issue which required the US to phase out subsidies (in response to a proposal from the “Cotton 4” namely Benin, Burkina Faso, Chad and Mali), and LDC issues were put on the back burner or not discussed at all.

Conclusion

The WTO stands at an important crossroads today with the 13th Ministerial Conference scheduled in February 2024. Many of the core issues of the Doha Work Program haven’t found any solutions even after more than a decade of negotiations. The 13th MC is likely to discuss the important issue of WTO reform and how to improve its working. Let us hope that something worthwhile emerges and the interests and concerns of developing countries and LDCs are given equal weight as those of the developed countries.

The writer is Additional Chief Secretary, Department of Mass Education Extension and Library Services and Department of Cooperation, Government of West Bengal