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TWN Info Service on WTO and Trade Issues
1 November 2021
Third World Network
www.twn.my
WTO: Walker process on response to pandemic raises questions of credibility
Published in SUNS #9449 dated 1 November 2021
Geneva, 29 Oct (D. Ravi Kanth) – Several members apparently raised serious concerns over the credibility of the ongoing facilitator-led process for finalizing the World Trade Organization’s response to the COVID-19 pandemic on grounds that proposals tabled by several members have not been included in the draft ministerial decision, as well as the lack of transparency about the proceedings, said people familiar with the development.
At the informal Doha Trade Negotiations Committee (TNC) meeting on 25 October, three countries – Egypt, Sri Lanka, and Malaysia – raised serious questions about the lack of transparency and inclusivity in the process adopted by the facilitator, Ambassador David Walker from New Zealand, who was appointed by the General Council (GC) chair Ambassador Dacio Castillo from Honduras, said people familiar with the proceedings.
At the end of the informal TNC meeting, Sri Lanka raised a point of objection when it was told that there will be no further discussions after the GC chair and the TNC chair as well as the chairs of the various negotiating bodies have delivered their statements, according to people familiar with the development.
Following its objection, Sri Lanka was given the floor to introduce its joint proposal with Egypt, South Africa, and Pakistan (JOB/GC/278) concerning the “WTO response in light of pandemic: trade rules that support resilience building, response and recovery to face domestic and global crises.” (See SUNS #9446 dated 27 October 2021).
Sri Lanka asked the facilitator to include the joint proposal in his ongoing consultations, said people familiar with the development.
During the meeting, Egypt and Malaysia apparently raised their respective concerns about the lack of transparency and inclusive participation in the facilitator-led process, said people, who asked not to be identified.
More importantly, in the run-up to the informal TNC meeting, India and several other countries questioned the facilitator’s alleged bias in including the demands made by the Ottawa Group of countries led by Canada while ignoring the specific proposal made by India, said people familiar with the development.
The demands made by the Ottawa Group, focused on further trade liberalization measures and market access based on reduction/elimination of tariffs as a response to the pandemic, have all been included in the draft ministerial decision circulated on 25 October, said people, who asked not to be quoted.
The six-page draft ministerial decision circulated by the facilitator does not include the proposal made by India on 6 October and the joint proposal circulated by Egypt, Pakistan, South Africa, and Sri Lanka on 25 October.
DRAFT MINISTERIAL DECISION
The draft ministerial decision circulated on 25 October states in the preamble:
* We, the Ministers, having met in Geneva, Switzerland, at our Twelfth Session:
* Desiring to promote strong multilateral cooperation towards ending the COVID-19 pandemic and supporting recovery, and to continue contributing with our joint efforts to better prepare for global health emergencies;
* Recognizing that the COVID-19 pandemic continues to have profound impacts on human health worldwide and expressing our sympathies for those whose lives were lost because of the SARS-CoV-2 virus and its variants;
* Regretting the impact that the COVID-19 pandemic continues to place on lives and livelihoods worldwide;
* Noting with concern the on-going public health and economic impact of COVID-19 on developing and least- developed countries;
* Affirming our shared ambition to ramp up and diversify production and distribution of essential COVID-19 products, in particular vaccines, therapeutics, and diagnostics;
* Conscious that the WTO provides a common institutional framework for the conduct of trade relations among its Members;
* Underlining the critical contribution that trade and the rules-based multilateral trading system have made to addressing the pandemic and to the resilience and stability of the global economy during the pandemic;
* Underscoring the important role that trade and the WTO should play in supporting a strong economic recovery;
* Recognizing that our mutual prosperity and wellness are intertwined and that equitable and global vaccination against COVID-19 is critical;
* Resolving, with this Declaration and accompanying Decision, to take actions to respond to the continuing global health crisis and to enhance the future pandemic preparedness of the WTO and its Members;
* Confirming that this Declaration and accompanying Decision do not alter the rights and obligations provided in the WTO agreements;
The draft ministerial decision declares that the WTO has a central role “in making available essential products needed in the fight against the COVID-19 pandemic and in ensuring equitable access to them.”
It underscores the need to keep markets open “to facilitate the manufacturing and distribution of essential COVID-19 products, including their inputs.”
It affirms that “any emergency trade measures designed to tackle COVID-19, if deemed necessary, are targeted, proportionate, transparent, temporary, reflect our interest in protecting the most vulnerable, do not create unnecessary barriers to trade or disruption to supply chains, and are consistent with WTO rules.”
The draft ministerial decision calls for improving “the preparedness of the WTO for future pandemics, to respond in a timely and effective manner should they arise, and to enhance the resilience of the multilateral trading system.”
The draft ministerial decision goes on to propose a large set of measures.
They include: (1) transparency and monitoring; (2) export restrictions and prohibitions; (3) trade facilitation, regulatory cooperation and coherence, and tariffs; (4) the role of trade in services; (5) collaboration with other international organizations and stakeholders; and 6) framework for future preparedness that includes establishing a “work plan on Pandemic Preparedness and Resilience.”
TRANSPARENCY AND MONITORING
On the transparency and monitoring provisions, the draft ministerial decision reiterates the ministers’ “commitment to ensuring that notifications of COVID-19 related measures are timely and comprehensive, as required under the provisions contained in WTO agreements.”
Further, it says that “the notification of such measures should allow for a quick identification of any disruptions in related supply chains and allow members to enter into consultations with a view to avoiding such shortest disruptions in the shortest possible timelines.”
The relevant WTO bodies will be asked to scrutinize the COVID-19 measures adopted by the members.
EXPORT RESTRICTIONS & PROHIBITIONS
The draft ministerial decision states that “export restrictions and prohibitions have affected the availability of, and access by governments and the private sector to, essential COVID-19 products and inputs needed to manufacture them.”
It calls on members to “exercise utmost restraint in the imposition of any new export restrictions and prohibitions and have recourse to export restrictions and prohibitions only as a last resort,” and suggests the review of, “all existing export restrictions and prohibitions on essential COVID-19 products with a view to assessing their continued justification and removing them as soon as possible. If removal is not possible at the time of review, a justification for the continuation of the measures should be provided upon request.”
The draft ministerial decision states that members “will exempt shipments of essential COVID-19 products to humanitarian and equitable access mechanisms (such as COVAX) from export restrictions and prohibitions.”
It insists that when export restrictions are imposed, “particular consideration [should be given] to the interest of least-developed and developing countries who are highly dependent on imports and, where possible, exempt them from the measures in order to avoid a negative impact of such measures on their access to essential COVID-19 products.”
It says that the period of export restriction measures should be short and should “not exceed the duration of the state of the public health emergency.”
The draft ministerial decision assigns the monitoring role to the DG to “continue to report regularly on the progress achieved in phasing out existing export restrictions and prohibitions and in avoiding disruption of essential COVID-19 product supply chains.”
TRADE FACILITATION, REGULATORY COOPERATION & COHERENCE, TARIFFS
The draft ministerial decision underscores “the effectiveness of implementing trade facilitating measures to expedite the export and import of essential COVID-19 products to address the on-going public health crisis, and to enable supply chains to function efficiently both for inputs and final products.”
On the pandemic, the draft ministerial decision says that members “will endeavour to accelerate the implementation of the WTO Trade Facilitation Agreement and particularly those provisions which have proven critical to date during the pandemic, including Article 7.1 (Pre-arrival processing), Article 7.3 (Separation of release from final determination of customs duties, taxes, fees, and charges), and Article 7.8 (Expedited shipment).”
It says that “with a view to expediting access to essential COVID-19 products, while facilitating trade and reducing adaptation costs for manufacturers, we encourage the strengthening of regulatory cooperation and coherence, including through promoting the sharing of regulatory dossiers and data.”
TARIFF REDUCTION COMMITMENTS
Apparently using the COVID-19 pandemic as a pretext, the draft ministerial decision has brought the issues of market access and tariff reduction to the centre stage.
It says that “tariff reduction or elimination can help facilitate access to essential COVID-19 products and we encourage Members to consider temporarily or permanently reducing or removing tariffs and other duties or charges applied on essential COVID-19 products on a voluntary basis. In so doing, Members may wish to refer to the indicative list of critical COVID-19 vaccine inputs prepared by the WTO Secretariat.”
TRADE IN SERVICES
The draft ministerial decision also highlights the importance of trade in services “in ensuring resilience during the pandemic.”
It states: “We underscore the importance of facilitating the international operations of service suppliers involved in production and distribution of essential COVID-19 products, such as logistics, freight transport, and distribution services.”
It highlights “the key contribution of health services and ICT services in ensuring resilience during the pandemic.”
The draft ministerial decision calls on members to “ensure that COVID-19-related public health measures that have a detrimental impact on services trade be removed as soon as conditions permit.”
However, it fails to mention the Indian proposal that calls for the removal of restrictions on the movement of services professionals.
COLLABORATION WITH OTHER STAKEHOLDERS & WORK PLAN
The draft ministerial decision underscores “the importance of the WTO’s collaboration with other relevant international organizations and stakeholders.”
Even though the WTO is a member-driven body, the draft ministerial decision seems to bring other international organizations into play, which could have serious ramifications, as pointed out by Egypt, Pakistan, South Africa, and Sri Lanka in their proposal (Job/GC/278).
Lastly, on a “framework for future preparedness,” the draft ministerial decision states that members “agree to establish a Work Plan on Pandemic Preparedness and Resilience (the Work Plan) aimed at enhancing future preparedness, response and resilience of the WTO and its Members, and at guiding the work of the WTO post-MC12 on these matters.”
The Work Plan, according to the draft ministerial decision, “will address issues related to crisis response, preparedness and resilience and focus on topics hitherto discussed in this Declaration, including: trade facilitation; export restrictions; regulatory coherence; transparency and monitoring; scaling-up of production and distribution of essential goods; services; and coordination with relevant stakeholders, including international organizations and the private sector.”
In short, the draft ministerial decision does not include the elements proposed by India (Job/GC/271) to be incorporated in the WTO’s response to the pandemic.
Crucially, it doesn’t include the key elements in the Indian proposal, namely, food security issues, including public stockholding for food security purposes, and “addressing intellectual property challenges in augmenting manufacturing capacities and ensuring unimpeded, timely and secure access to quality, safe, efficacious and affordable health products and technologies for all, for a rapid and effective response to pandemics, including a waiver from specific provisions of the TRIPS Agreement, wherein the TRIPS waiver component has to be finalized before MC12.”
The WTO’s response to the pandemic “without the TRIPS waiver element, will not be credible,” India argued.
In a similar vein, the GC-appointed facilitator did not include elements from the comprehensive proposal circulated by Egypt, Pakistan, South Africa, and Sri Lanka.
It remains to be seen if the draft ministerial decision will be modified to include the Indian and the four developing countries’ respective proposals in the final draft.
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