TWN Info Service on WTO and Trade Issues
27 April 2022
Third World Network
www.twn.my

South must ensure no “take-it-or-leave-it” decisions at MC12
Published in SUNS #9563 dated 27 April 2022

Geneva, 26 Apr (D. Ravi Kanth) – The World Trade Organization’s 12th ministerial conference (MC12) is now confirmed to take place as scheduled on 12-15 June in Geneva, notwithstanding the ongoing Russia-Ukraine war as well as the COVID-19 pandemic due to the Omicron and other new emerging variants of the SARS-CoV-2 virus.

Significantly, there is a void at this juncture in the negotiations at the WTO and it seems that none of the major “deliverables” such as the mandated permanent solution for public stockholding (PSH) programs for food security, are in a good shape.

In a letter to trade envoys on 25 April, to be delivered to their respective national capitals, the WTO director- general Ms Ngozi Okonjo-Iweala along with the chair of MC12, Mr Timur Suleimenov of Kazakhstan, and the WTO General Council (GC) chair, Ambassador Didier Chambovey from Switzerland, confirmed that MC12 will take place at the WTO headquarters in Geneva on 12-15 June.

MC12 was originally scheduled to take place in Geneva on 30 November-3 December 2021 but was postponed at the eleventh hour because of the sudden eruption of the Omicron variant of the SARS-CoV-2 virus.

It is somewhat intriguing that despite the sudden spurt in new COVID-19 cases in different parts of the world due to the Omicron and other new variants of the virus, the three “drivers” of MC12 – the WTO DG, the Kazakh chair, and the GC chair – have decided to press ahead with the meeting, said a trade envoy, who preferred not to be identified.

Moreover, during the last “green room” meeting of select trade envoys held more than a fortnight ago, sharp differences emerged on the major deliverables for MC12, especially on the permanent solution for PSH programs.

Notwithstanding the ongoing Russia-Ukraine war and the COVID-19 pandemic, the DG along with the Kazakh trade minister and the GC chair have informed members that MC12 will be an in-person meeting.

The timing of the announcement of MC12 is also interesting as it came after the DG returned from Washington DC, perhaps with a “green light” from Washington to move ahead with the ministerial conference.

The DG is apparently traveling again to Washington DC for a face-to-face meeting with US Trade Representative Ambassador Katherine Tai on 28 April, according to the USTR’s calendar of events.

LETTER TO WTO MEMBERS

In a one-page letter sent to trade envoys on 25 April, seen by the SUNS, the DG, the Kazakh chair and the GC chair wrote that MC12 will be held at the WTO’s premises.

Given the restrictions on the level of participation, they maintained that “the limitation of the venue, and the urgency to effectively respond to the challenges that the world and the WTO are faced with, we will have a streamlined and business-like conference.”

So far, previous WTO ministerial meetings were held in a “pressure-cooker” type atmosphere where the wrangling over the trade-offs invariably went to the wire as major decisions were “cooked up” between five or seven major countries while the rest of the membership were kept in the dark and were later served with “take-it-or-leave-it” outcomes.

Therefore, the notion of a “streamlined and business-like conference” has raised doubts whether MC12 will be held through a genuinely multilateral process involving all the members, trade envoys said.

The letter to members says that “the uneven and fragile recovery from the COVID-19 pandemic, coupled with the current geopolitical situation since the postponement of MC12 have had important implications for global trade, the multilateral trading system, and vulnerable people around the world.”

Without mentioning the Russia-Ukraine war, which has created supply-chain crises involving food, fertilizers, and fuel, as well as growing restrictions being imposed on Russia’s participation in small-group meetings at the WTO, the DG, the Kazakh chair and the GC chair argued that “it is, therefore, not business as usual, which makes it imperative that ministers address the reforms needed to make the WTO fit for the purpose and ready to address 21st century challenges.”

Last week, Ms Okonjo-Iweala had echoed the same message in Brasilia and Washington DC, calling for a “new multilateralism” and a WTO fit for 21st century challenges.

It appears to be clear as daylight that the WTO’s problems are not exactly the problems of humanity at large, which is reeling under gross inequalities and rising hunger due to high food prices and falling living/economic standards due to the COVID-19 pandemic, and now the Ukraine war.

Yet, the letter to members highlighted “Other important problems of the global commons on the WTO agenda – ensuring that the trading system makes its full contribution to responding to this and future pandemics, curbing harmful fisheries subsidies and tackling other sustainability issues, and addressing agricultural reforms (the permanent solution for public stockholding programs for food security), and persistent development challenges.”

The “other sustainability issues” mentioned in the letter include trade and environment, including a range of controversial trade-related climate-change initiatives being advanced by the European Union and other major developed countries.

It appears that there will not be any outcomes in agriculture at MC12 because of the avowed opposition from the US and the EU among others to concluding the permanent solution for PSH programs, said people familiar with the development.

According to the DG, the Kazakh chair and the GC chair in their letter to members, “the reconvening of MC12 should focus minds and reignite the momentum to take forward the work of the WTO”.

While progress on the TRIPS waiver and the “trade and health” package seem to have halted, the letter emphasized: “A comprehensive and balanced WTO response to this and future pandemics is an area that should not wait any longer. The current global food and energy crisis directly affects households, and we have witnessed social unrest in some countries.”

Despite several unresolved issues in the draft Doha fisheries subsidies text, it is claimed in the letter to members that “significant convergence was made on the Fisheries Subsidies negotiations in the lead-up to the postponement of MC12. Members must now engage to best build on the advances made so as to clear the path towards consensus.”

However, this expressed optimism about progress on fisheries subsidies is not borne out by the facts on the ground, and if anything, the draft text is replete with unbridgeable differences at this juncture.

There are continued differences on a range of issues including on fuel subsidies, the issue of territoriality, weak special and differential treatment provisions, and a carve-out extended to major fisheries subsidizers like the EU, the US, China, Canada, and several other developed countries, said people familiar with the draft fisheries text.

While acknowledging that “agriculture reform remains vital for many Members particularly in light of food security challenges”, the letter maintained that “a path forward, though difficult, is reachable,” stressing that “ministerial guidance in these areas is indispensable.”

The letter to members says that “WTO reform is another important priority, and your leadership here as well will be crucial for defining the path forward on the broader WTO agenda post-MC12.”

On a rather optimistic note, which does not quite reflect the realities in Geneva, the letter informed trade ministers/ authorities in various capitals that “while the context is difficult, MC12 can galvanize action towards achieving our objective.”

The letter underscored the need for empowering “Ambassadors and Permanent Representatives to exercise requisite flexibility and political will in the few weeks left to MC12 to prepare the ground for your action.”

In their letter, the DG, the Kazakh chair and the GC chair appealed to trade ministers/authorities “to accomplish what needs to be done, take necessary decisions and provide the much-needed Ministerial guidance on the road ahead.”

However, the letter did not mention whether Russia will be allowed to participate in hard negotiations on fisheries subsidies, agriculture, the IPR issue in the WTO’s response to the pandemic, and proposed WTO reforms, given the moves by the US-led G-7 countries to exclude Moscow from the discussions.

It remains to be seen in the next six or seven weeks what can be accomplished in the negotiations as ministers meet on 12 June.

The developing countries face a “Herculean” task to ensure that there will be no “take-it-or-leave-it” decisions at the eleventh hour, as such decisions will rarely address their core issues.