The year-end meeting of the World Trade Organization’s General Council appears to have kicked the can on several mandated issues for trade ministers to decide at the upcoming 13th ministerial conference, raising serious questions on the utility of the GC meetings to find any solutions or compromises, said people familiar with the discussions.
The MC13, scheduled to be held in Abu Dhabi from February 26-29 next year, will be chaired by Thani bin Ahmed Al Zeyoudi, Minister of State for Foreign Trade of the United Arab Emirates, as is the normal practice of a host country to chair the meeting.
At the General Council meeting that started on Wednesday, members agreed on the three vice-chairs for MC13 – Cameroon Minister of Trade Luc Magloire Mbarga Atangana, New Zealand Minister for Agriculture Todd McClay and Panama Minister of Trade and Industry Jorge Rivera Staff.
Thursday's continuation of the GC meeting appears to have cast a dark shadow on issues like the extension of the TRIPS agreement to cover the COVID-19 diagnostics and therapeutics; the termination of the moratorium on customs duties on electronic transmissions; the least-developed country graduation issue on smooth transition support measures in favor of those countries graduated from the LDC category; and several other issues, said people who asked not to be quoted.
On LDC graduation, which is a developmental issue to help COVID-19 ravaged-LDCs, the United States raised a point of order on the report submitted by the Committee on Trade and Development Chair. Washington said that LDC extensions should be granted on a case by case basis, said people present at the meeting.
Without naming the United States, India appears to have said that members want to grant duty-free and quota-free access to LDCs on a case-by-case basis, while, on the other hand, the rich and industrialized countries have continued to enjoy duty-free and quota-free access through the moratorium on customs duties on electronic transmissions, said people familiar the discussions.
The same countries never provided any evidence for the continuation of the e-commerce moratorium, said people familiar with the discussions.
China, Indonesia, India, South Africa and other developing countries supported the LDC graduation measures, said people who asked not to be quoted.
On the continuation of the GATT exemption on the US Jones Act since 1995, the European Union, China, Japan, Korea and Norway castigated the specific exemption on grounds that it allegedly destroyed global shipping industry.
The EU said the Jones Act as a piece of legislation “restricts fair competition in the shipbuilding and shipping markets and no longer serves a legitimate purpose in today’s global economy.”
The EU maintained that “even more, new implementing rules show an increasingly protectionist interpretation of the Jones Act, going even further beyond its original intention.”
“The prevailing situation has negative economic consequences for the EU's and other countries shipbuilding, logistics, dredging, and energy industries,” the EU said, adding that “the costs are also high for the United States, which is faced with higher costs for off-shore energy production, coastal protection from flooding, adapting to climate change, and haulage services due to the closure of the US market for foreign-built, serviced, and operated ships.”
However, the United States reiterated its position that the exemption must continue as the conditions that existed at the time of granting the exemption continue to be there even today, said people who asked not to be quoted.
On another proposal concerning the “immediate steps to respond to food insecurity” by Singapore, several members severely criticized the proposal, with Brazil calling it is a “red herring.” Singapore’s proposal sought members to refrain from imposing export restrictions or prohibitions on essential foodstuff.
Indonesia said more than export restrictions, it is important to conclude a decision on the permanent solution for food security purposes – “which to this date remains an outstanding mandate from previous MCs.”
Even though the overall tone of the discussions seemed pretty mild at the GC meeting unlike at previous meetings, there is little or no progress on any of the issues, said people who asked not to be quoted.
Among the MC 12 decisions reached in June 2022, the apparent failure to implement paragraph eight of the Ministerial Decision on the TRIPS Agreement to extend coverage to COVID-19 diagnostics and therapeutics seems like an eyesore and has raised serious doubts on the credibility of ministerial decisions, said people familiar with the developments.
According to paragraph eight of the MC 12 decision on TRIPS Agreement, members ought to have decided on extending the decision to cover the COVID-19 diagnostics and therapeutics by December 2022.
A decision was further delayed until some members like the United State completed their internal processes. Despite those processes having been completed in the second half of October, there is no forward movement.
It is against this backdrop, that South Africa, Bangladesh, Bolivia, Egypt, India, Indonesia, Pakistan, South Africa and Venezuela asked the General Council to adopt a draft decision they had proposed for consideration at the GC meeting.
Indonesia said “We cannot apologize to the dead, particularly to the 7 million people whose live tragically ended by COVID-19,” adding that members can at least “rectify our past mistakes through immediately extending the 17 June TRIPS Decision adopted by the Ministers by consensus after long protracted negotiations, mutatis mutandis to therapeutics and diagnostics, as requested by proponents in document WT/GC/W/913.”
The draft decision by co-sponsors drew attention to the MC12 decision which, they argued, “is far removed from the comprehensive TRIPS waiver proposal contained in documents IP/C/W/669 and IP/C/W/669/Rev.1 (original TRIPS waiver proposal) co-sponsored by 65 WTO Members (co-sponsors).”
The proponents of immediate extension of paragraph eight reiterated that “A more comprehensive waiver decision as envisaged in the original TRIPS waiver proposal would support the efforts to ensure timely, equitable and universal access to safe, affordable and effective therapeutics and diagnostics, ramping up of production and expanding supply options.”
They informed members that “the MC12 Ministerial Decision on the TRIPS Agreement (document WT/MIN(22)/30) is the result of over one and a half years of arduous and lengthy discussions on the original TRIPS waiver proposal and intense negotiations heading towards the
12th Ministerial Conference in the midst of a global crisis. It is of limited scope covering only vaccines.”
Moreover, “Diagnostics and therapeutics are essential tools for a comprehensive approach to fight the pandemic, that it is not over,” the co-sponsors argued.
They pointed out that “Omitting these vital tools will deter the effectiveness of the decision that aims timely and affordable access to effective vaccines against the ongoing COVID-19 pandemic.”
Further, based on their earlier document, the co-sponsors maintained that “at a minimum, the extension of the policy tools provided in document WT/MIN(22)/30 to therapeutics and diagnostics will result in a holistic approach to enable developing countries to address those IP barriers that prevent the expansion and diversification of production and increase accessibility to crucial life-saving COVID-19 tools.”
According to the co-sponsors, “the current outcome represents a narrow-conditioned Decision due to demands of some WTO Members, requiring significant compromises on the part of the co-sponsors that had hoped for greater solidarity among WTO Members during a public health emergency and consequently a more comprehensive waiver decision as envisaged in the original TRIPS waiver proposal that would support ramping up of production and expanding supply options.”
They called on the General Council to adopt the following draft decision:
1. “The MC12 Decision on the TRIPS agreement is extended mutatis mutandis for the production and supply of COVID-19 therapeutics and diagnostics.” and
2. An eligible Member may apply the provisions of this Therapeutics and Diagnostics Decision until 5 years from the date of this Decision. Any extension of the MC12 Decision on the TRIPS Agreement pursuant to paragraph 6 shall apply to this Decision as well.
However, the draft decision failed to gather consensus due to opposition from Switzerland and the United Kingdom among others. The leading pharmaceutical-producing countries repeatedly argued that there are no intellectual property barriers for accessing COVID-19 diagnostics and therapeutics, said people familiar with the discussions.
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