What is
on the Agenda at the WTO’s 12th Ministerial Conference in Geneva?
·
WTO DG
Highlights Agenda in Opening Remark
·
Moves to Tame
China
·
The World Trade Organization’s (WTO) four-day 12th Ministerial
Conference (MC12) starts on Sunday in Geneva (Kazakhstan, Co-host in the Chair)
·
Trade ministers will gather for the first time in four
years after the conference was postponed twice due to the coronavirus
The future
of the World Trade Organization (WTO)
will face a test of credibility during the four-day 12th Ministerial Conference
(MC12), which starts on Sunday in Geneva.
It takes
place against the backdrop of the global coronavirus pandemic, rising food and energy
prices (Wheat up 56%, Fertilisers 128%, Edible Oil
45%), the protracted war in Ukraine, geopolitical
tensions and the ongoing threat of climate change.
Trade
ministers from member countries are set to gather for the first time in four years,
after the conference – originally scheduled for June 2020 in Nur-Sultan, Kazakhstan- was postponed twice due to the coronavirus.
Any results
from the conference will be seen as a vital answer to whether the multilateral institution
can still be capable of agreeing on anything and whether consensus can be attained
to reform its outdated laws and keep pace with global developments.
The Ministerial
Conference is the top decision-making body of the WTO, and has generally met every
two years since 1996.
MC12
marks the first ministerial conference since the latest gathering four years ago
in Buenos Aires, Argentina which collapsed without decision.
The war
in Ukraine adds another layer of complication to the already dysfunctional WTO as
multiple members have revoked Moscow’s trading privileges and refused to negotiate
agreements with Russian delegates (Violation of WTO Rules?).
“But again, I think we will find ways to work it
out. There has not been this sort of divisions into blocs, at least not within the
WTO – we are fortunate that kind of regional blocs has not really happened.”
Okonjo-Iweala had
earlier said that “MC12 should not simply be a talk shop”.
1. Agreement
on ending subsidies for fisheries?
Around
34 per cent of the world’s fishing stocks are overfished, according to the World
Economic Forum, and negotiations have been ongoing since 2001 without any consensus
on eradicating financial subsidies that contribute to the crisis.
According
to insiders, a deal is set to be struck this time and a revised draft agreement
exists for negotiation.
(India
not happy Near shore fishing covered)
The agreement,
if passed by member states, will prohibit all except low income countries from providing
subsidies to overfished stocks and those that contribute to illegal and unregulated
fishing and overfishing.
Developing
countries may also be exempt from rules on subsidies that contribute to overfishing,
provided they fulfil certain provisions.
China
is the world’s largest subsidiser of fisheries, spending
three times as much as the European Union, according to a 2019 paper in the Science Direct journal.
As a
self-identified developing country, China could be allowed to continue using subsidies,
but this could pose a problem in negotiations.
(WTO
DG says China should give up S&D privileges)
The deal
may be further impacted by Western grievances on the alleged use of forced labour on Chinese fishing fleets.
The United
States insists on including a clause in the agreement that would require members
to declare granting subsidies to vessels that have been proven to use forced labour, whereas China is opposed to such a provision.
2. Vaccine
patent waivers?
In March,
the US, European Union, India and South Africa reached an agreement to provide a
waiver on vaccine patents for three years.
If the
agreement is accepted by the 164 WTO members, it would allow so-called developing
countries to produce Covid-19 vaccines without being sued by the developers.
However,
developing countries that have exported more than 10 per cent of the world’s Covid-19
vaccine are not eligible to be exempt from the patents, which includes China.
The agreement
marks a compromise from the original proposal put forth in October 2020 by South
Africa and India that asked for intellectual property rights to be waived for not
only vaccines but also other related drugs and
treatments for Covid-19.
The compromise
agreement has still not been signed by key stakeholders, such as the UK and Switzerland.
“At end
of the day it will require the ministers to close, and the political will to close,
one or two remaining issues. But it’s within the possible,” Okonjo-Iweala
added.
3. WTO
reform?
The US
and the EU have repeatedly brought up the need to reform the WTO to contain the
rise of China and keep pace with the current system of digital trade and commerce.
“[The
WTO] needs to be dealing with issues related to the pandemic,” said John W.H. Denton,
secretary general of the International Chamber of Commerce at a public forum in
September.
“It has
to deal with the digital agenda. It needs to join up climate and trade … we can’t
have functioning businesses in a planet that is actually not functioning,” he added.
Reform
has also become another battlefield between China and the US-led West. In 2019,
the US paralysed the organisation’s
appeals court- critical for settling disputes- by refusing to nominate
new judges to protest what it saw as the organisation’s inability to deal with China’s economic model.
The US
insists that existing trade laws be altered or changed to remove ambiguities that
contribute to China’s so-called unfair trading practices.
One such
issue has to do with China’s provision of subsidies to domestic businesses through
its state-owned enterprises.
According
to the WTO Agreement on Subsidies and Countervailing Measures, discriminatory subsidies
cannot be given by a government or public body.
However,
it remains unclear whether state-owned enterprises are “public bodies” and whether
the subsidies provided to domestic businesses by state-owned enterprises violate
the law.
China’s
accession to the WTO has not led to its transformation to a market economy and member-states
contend that China has not provided access to its markets in a way that corresponds
to its weight in the global economy.
Current
WTO rules do not account for the influence of the Chinese state on its markets.
Negotiating new rules and reaching consensus among 164 members to tackle China’s
unique system and other issues such as digital trade and sustainability remains
the biggest challenge.
China,
for its part, has repeatedly denied breaking WTO rules, stating that it has fully
delivered the accession commitments while upholding them.
Shu Jueting, a spokeswoman for China’s Ministry of Commerce, said
on Thursday that China will “support the reform of the WTO in the right direction”
and “support the inclusive development of the multilateral trading system”.
The crucial
meeting also comes after a low profile celebration in China in December for its
20th anniversary of accession
to the WTO, and it will present a challenge to Beijing on
how the country tackles increasingly complex and tense relations with other major
economies in the organisation, while pursuing a greater
role in the global trade governance.
Both
the US and the European Union appear inclined to work together to build new rules
and clarify existing ones, to confront the issues posed by China’s unique economic
system, according to the Atlantic Council.
But whereas
the European Union has set up a joint working group with China to reform the WTO,
the US is not similarly inclined to include China in negotiations.
For her
part, Okonjo-Iweala has said that targeting China is unlikely
to lead to reform.
“We need
to find ways to engage China. Obviously, any member who feels particularly targeted
will react in a manner that may not be constructive,” she said.
A group
of 89 member-states will issue a joint declaration during MC12 on developing and
improving gender-disaggregated data so that more gender-based policies can
be introduced.
The member
states will also introduce research initiatives that can inform trade policy to
increase women’s participation in economic trade. A two-year action plan will be
developed after the conference.
Australia,
Japan and Singapore – the co-conveners of negotiations on e-commerce – will issue
a statement during MC12, reiterating their target of achieving an e-commerce agreement
among member states and setting related targets for the upcoming year.
The agreement
will contain rules on paperless trading, cybersecurity and customs duties on electronic
transmissions, among other aspects of digital trade.
A total
of 65 member states- representing over 90 per cent of the world trade- will also
conclude negotiations to ensure that domestic regulations do not constrain trade
in services.