WTO DDG Anabel González, Ex World Bank and Costa Rica Minister Shares thoughts on MC12

MC12: more than meets the eye

WTO ministerial conferences are unpredictable events, which usually take a life of their own. When trade ministers from across the world come together to negotiate a set of complex and sensitive issues in just a few days, no one can really anticipate what will happen. There has been great success, like in Bali in 2013 when ministers adopted the landmark Trade Facilitation Agreement; there has also been massive failure, like in Seattle in 1999 when the organizers pulled the plug even before the conference end date. The last meeting of the WTO’s main decision-making body, in Buenos Aires, did not result in any multilateral outcome.

In the case of MC12, expectations were low, but the stakes were high. Success, even if modest, was critical. Failure to deliver would have been devastating on several counts. It would have been a missed opportunity for governments to use trade collaboration to tackle the pandemic, the food crisis or the depletion of fish stocks. Failure to extend the moratorium on the imposition of customs duties on electronic transmissions would have been a setback for the continued expansion of the digital economy and the growing number of small and medium businesses and consumers in both advanced and developing economies that rely on it. Without the appetite to collaborate, governments would have dealt a blow to the prospects of WTO reform and with it, to the future of the organization. Fortunately, ministers opted for success. Much credit goes to WTO’s Director-General Dr. Ngozi Okonjo-Iweala, who worked tirelessly to prevent members from choosing the alternative.

China Opts Out Covid-19 Flexibility – Footnote 1

An inconspicuous footnote in the intellectual property decision may be the most important systemic contribution of MC12. In defining which countries could benefit from the flexibilities included in the deal, footnote 1 provides a pragmatic blueprint to support the increased adoption of responsibilities by emerging markets in the system. It declares that all developing countries are eligible and encourages those with existing capacity to manufacture COVID-19 vaccines to make a binding commitment to opt out of the decision. China did. Those obligations may be adopted in the General Council and will be recorded, compiled and published in the WTO website. Footnote 1 was negotiated jointly by the United States and China. Unsurprisingly, it was the last piece of MC12 to fall into place. Beyond helping to balance responsibilities within the WTO, the “opting out” technique could facilitate multilateral outcomes by allowing those members that cannot join to stay out, bringing much needed flexibility to the trading system.