TWN Info Service on WTO and Trade Issues
24 June 2021
Third World Network
Cautious welcome for Walker as facilitator on WTO Covid-19 response
Published in SUNS #9373 dated 24 June 2021
Geneva, 23 Jun (D. Ravi Kanth) – The members of the World Trade Organization on 22 June cautiously welcomed the appointment of the former General Council chair Ambassador David Walker from New Zealand as the facilitator to oversee the “horizontal and multilateral process” for finalizing the trade body’s response to the COVID-19 pandemic, said people familiar with the development.
The sudden announcement of Ambassador Walker’s appointment has apparently caused some confusion, as it is being seen as an attempt to distract members from finalizing a decision on the TRIPS waiver proposal by the end of July, said people familiar with the development.
Ambassador Walker, who had conducted a similar process in 2019 for restoring the functioning of the Appellate Body (AB), had faced severe opposition from the United States to his recommendations.
Ultimately, the Walker committee proposals on the DSU (Dispute Settlement Understanding) reforms remained unimplemented due to Washington’s refusal to accept his proposals.
It remains to be seen what members will decide this time around, said an analyst, who asked not to be quoted. “It is a Trojan horse to distract attention and focus on the waiver proposal,” the analyst said.
At an informal General Council (GC) meeting on 22 June, several members, including the TRIPS Council chair, Ambassador Dagfinn Sorli from Norway, cautioned against new processes being introduced as part of the horizontal process going forward.
GC CHAIR’S REPORT
At the informal GC meeting on 22 June, the GC chair, Ambassador Dacio Castillo from Honduras, issued a comprehensive restricted report (Job/GC/259) of his recent consultations with members on a range of issues, including the facilitator-led process on the pandemic.
The GC chair gave little detail on how the decision on the selection of a facilitator had been finalized.
He merely said that some countries suggested the possibility of setting up “a Facilitator-led, horizontal and multilateral process under the auspices of the General Council” for merging “all these individual processes”.
Ambassador Castillo did not indicate the “individual processes” that are currently underway.
He merely said the facilitator-led process “would not only help us streamline and organize our work but also ensure transparency and inclusiveness.”
He said that “all delegations pointed out that the most pressing issue was the pandemic.”
Without naming the countries involved, he said that “some of them said that the WTO response to the pandemic had to be the main focus for MC12, with some suggesting that they wished to have outcomes in this area even before MC12.”
He said that delegations referred to a number of ideas and proposals currently on the table.
The proposals that are currently on the table include; (1) the temporary TRIPS waiver proposal co-sponsored by 63 countries; (2) the trade and health initiative proposed by two dozen countries; and (3) the EU’s proposal relating to the use of compulsory licenses.
Ambassador Castillo also outlined the other aspects of what needs to be targeted at the WTO’s 12th ministerial conference (MC12), to be held in Geneva end-November.
The chair said the “aim should be for a multilateral outcome” with several components. The components include:
* A political component to reaffirm Members’ commitment to the multilateral trading system, especially in the context of the pandemic, underlining that trade was part of the solution;
* Trade-policy related aspects, with a number of issues. The issues, for instance, include (i) addressing trade restrictions, including export restrictions and obstacles and supply chains; (ii) regulatory coherence; (iii) transparency of measures related to the pandemic – both trade facilitating and trade restricting; (iv) addressing food security/livelihood security aspects. In this regard, solutions to PSH/SSM (public stockholding programs for food security and the special safeguard mechanism) were mentioned given the impact on poverty and food security; (v) address the negative impact of the pandemic on services sectors and the role of services in mitigation and economic recovery; (vi) address concerns of land-locked developing countries (LLDCs); (vii) address concerns around trade, debt and finance that have [been] exacerbated;
* IP aspects, in particular: (i) the TRIPS waiver being discussed in the TRIPS Council. Some delegations called for a balanced outcome addressing all interests before MC12. It was therefore important to move to a text-based discussion; (ii) if necessary, fixing the flexibilities in the Doha Declaration on TRIPS and Public Health; and (iii) solutions for technology transfer to developing country Members and LDCs;
* Increasing production and distribution of vaccines, with several delegations expressing support for the Director- General’s “Third Way” approach;
* A framework to respond more effectively to future pandemics; and
* A framework focused on how the WTO can contribute to inclusive and sustainable post-pandemic economic recovery that speaks to the goals in the Marrakesh Agreement.
DG CALLS FOR FEW DELIVERABLES FOR MC12
In response to the GC chair’s statement, the WTO Director-General Ms Ngozi Okonjo-Iweala appeared to be somewhat subdued in her remarks.
She praised the appointment of Ambassador Walker to work as facilitator on the pandemic response. She said that members must focus on a few specific areas and a few deliverables for MC12.
For the first time, she did not mention the possible deliverables, which she had highlighted in great detail during her various interventions over the past three-and-a-half months.
As the prospects for a ministerial outcome on fisheries subsidies at her specially-convened 15 July meeting hang in the balance, the DG said that she is convening an informal Trade Negotiations Committee (TNC) meeting on 25 June.
SHARP RESPONSES FROM DEVELOPING COUNTRIES
In response to the GC chair’s report, several developing countries as well as coalitions of developing and least- developed countries raised their respective concerns, including on the conduct of MC12.
To start with, India reminded members that they are in a pandemic year, suggesting that the MC12 outcome should be driven by two objectives. The objectives include “to minimize the loss of life,” and “the loss of economic output.”
India said members must singularly focus “on accelerating the recovery” to avoid further hardship in the future.
The Indian trade envoy Ambassador Brajendra Navnit lamented that it took more than one year after the COVID- 19 pandemic to address the WTO’s response to the pandemic.
India called for a “pause” in the WTO’s pursuit of trade liberalization initiatives due to the pandemic.
India said that organizations like the International Monetary Fund have deviated from their hawkish fiscal policies because of the pandemic.
Ambassador Navnit said that it is equally important for a “pause” in pursuing the WTO’s continuous trade liberalization initiatives at this juncture.
The Indian trade envoy asked, “why not the WTO look back and say that for a moment a pause to the kind of theoretical practices [is needed]”.
He argued that “the WTO is not showing that kind of flexibility,” according to people present at the meeting.
After almost nine months, said Ambassador Navnit, the text-based negotiations on the TRIPS waiver has started on 22 June.
He pleaded with his counterparts to engage in the text-based negotiations. He cautiously welcomed the appointment of the facilitator for preparing the WTO’s response to the pandemic.
India called for a permanent solution to public stockholding programs for food security at MC12, saying that it is essential for addressing the growing food insecurity and hunger.
He downplayed the importance of a decision on the World Food Program (WFP) on grounds that countries have already exempted the WFP’s purchases from any export restrictions.
He underscored the need for members to come up with a “blueprint” for restoring the functioning of the Appellate Body within the next six months.
Ambassador Navnit explained why it is important to reassess the moratorium on customs duties on electronic transmissions at a time when the leading e-commerce firms are making substantial profits.
As regard the conduct of MC12 and the outcome document, India said it prefers an in-person meeting at MC12, adding that if it is a hybrid meeting then all the outcomes must be finalized before the ministerial meeting.
STATEMENT BY AFRICAN GROUP
On behalf of the African Group, Mauritius said that the world will judge the WTO harshly if there are no credible outcomes at MC12.
It emphasized that the most important issue for its group is an expeditious decision on the TRIPS waiver.
Mauritius called for outcomes on the mandated issues in agriculture, particularly the permanent solution on public stockholding programs for food security and on cotton.
It argued that there has to be a carve-out (for developing countries) on fisheries subsidies and policy space in the final fisheries subsidies agreement.
Commenting on the varying views expressed on the proposed fisheries subsidies agreement, Malaysia underscored the need for focusing on the mandate.
It cautioned about bringing new elements into the negotiations, suggesting that they will delay the outcome.
Malaysia called for not springing any surprises on members in finalizing the list of deliverables and on the road-map, arguing that a stocktaking meeting must be held after the summer break, said people familiar with the development.
Commending the appointment of Ambassador Walker as the facilitator for the WTO’s response to the pandemic, Indonesia’s trade envoy Ambassador Syamsul Bahri Siregar said that agriculture remains the key priority for his country at this juncture.
He emphasized the need for delivering outcomes on the issues of public stockholding programs for food security and special safeguard mechanism at MC12.
He said negotiations on fisheries subsidies must be concluded by MC12, arguing that special and differential treatment must be reaffirmed in all WTO negotiated outcomes.
He said an outcome on the e-commerce moratorium would depend on clarifying the scope and definition of electronic transmissions.
STATEMENT BY SOUTH AFRICA
South Africa said that issues that are not part of the WTO’s work program should not be included for any consideration at MC12.
Ambassador Xolelwa Mlumbi-Peter said it is important to singularly focus on “mandated issues”.
She said the possible list of deliverables and the roadmap for the negotiations must be made clear by the end of July, “a moment of truth.”
The key priority to be focused on right now, she said, is the WTO response to the pandemic, adding that it is the key priority.
“We should build on timely, affordable access for diagnostics, therapeutics, and vaccines,” she said.
The South African trade envoy emphasized that this is key if the WTO has to have any credibility, arguing that the WTO must deliver tangible outcomes at MC12. “For these reasons, the waiver is key to our production,” she said.
While welcoming the appointment of Ambassador Walker as the facilitator, she cautioned about the overlapping of the processes.
More importantly is that, “MC12 delivers on food security and hunger” and provides the policy space for developing countries to pursue their developmental initiatives, she said.
It is the bound duty of members to “preserve the multilateral character of the WTO and multilateralism is important more than ever,” she emphasized.
Ambassador Xolelwa said that special and differential treatment remains a critical principle in the WTO rule-book.
She called for a balanced outcome on WTO reforms.
DEVELOPED COUNTRIES EMPHASIZE FEW MC12 DELIVERABLES
The European Union praised the GC chair for his consultations, suggesting that only 5 months are left for MC12.
The EU said many issues have been there for a long time but by the end of July, there should be a clear picture of what is feasible at MC12.
It called for a few deliverables at MC12, arguing that all other issues must be placed in a work program for MC13.
In a similar vein, Norway also echoed that members not overload the agenda, suggesting that focus should be on a number of limited issues.
Even if everything is not included in the proposed fisheries subsidies agreement by July, members must still conclude the negotiations in July, Norway said.
Commenting on the Walker process as a focal point for considering various initiatives with regard to the pandemic, Ambassador Dagfinn Sorli from Norway apparently said that the proposed horizontal process must not create new processes.