Crucial decisions of WTO MC12 awaits members’ action ahead of Feb ’24 meeting

Money Control, June 20, 2023

By Pradeep S Mehta & Advaiyot Sharma

This time a year ago, trade ministers of World Trade Organisation (WTO) members adopted the Geneva Package of outcomes after intensive negotiations at the 12th Ministerial Conference (MC12). MC12 will long be remembered as the ministerial where the larger interest of reviving rules-based trade multilateralism through a solution-oriented approach won the day. Despite continuing pandemic-induced stressors and the added complexities of conducting trade negotiations in the shadow of the Russia-Ukraine conflict, trade ministers led from the front and invested significant political capital in ensuring deliverables at MC12, which ultimately helped carry the day.

Where do things stand a year on? With just around eight months to go for the next WTO Ministerial Conference in Abu Dhabi, we take stock of progress achieved since MC12 and the road ahead to MC13.

Work In Progress

One of the landmark achievements of MC12 was the adoption of theAgreement on Fisheries Subsidies to eliminate subsidies for illegal, unreported and unregulated fishing. This now awaits formal acceptance by two-thirds of the WTO membership in order to enter into force. Only 10 WTO members have so far deposited their instrument of acceptance, which includes the United States. This is a positive signal of its active reengagement with the WTO.

However, this agreement remains a work in progress. The more contentious aspects of disciplining subsidies that contribute to overcapacity and overfishing, and the contours of special and differential treatment (S&DT) for developing country members are yet to be thrashed out. These will be the priority issues in the run-up to MC13.

The MC12 decision limiting patent rights over subject matter required for the production and supply of COVID-19 vaccines by reducing the rigour of procedures relating to use without authorisation of right holders (‘compulsory licencing’) was another propitious outcome. Having missed the original deadline on a decision on whether to extend this decision to COVID-19 diagnostics and therapeutics, the issue remains important and on the agenda for MC13, despite the pandemic having receded from headlines.

Apart from the WTO, the United States International Trade Commission is also examining the matter of the relationship of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) with Covid-19 diagnostics and therapeutics, and its results are expected in late October.

Development-oriented Multilateralism

The developmental aspects of trade will continue to underpin discussions on all substantive issues and take centre stage in discussions before MC13. At its heart will be making the WTO framework for S&DT of developing and least-developed countries more operationally effective. A recent Policy Brief for the ThinkTwenty (T20) engagement group of the G20, co-authored by one of us in collaboration with global experts, identifies some reformatory interventions which can promote development-oriented multilateralism at the WTO.

At MC13, WTO members also have to arrive at a decision on the future of the existing moratorium on levying customs duties on electronic commerce. This is a complex issue with implications not just for cross-border digital trade, but equally for the development dimensions of digital industrialisation.

The WTO membership will also continue to grapple with legacy issues in the run-up to MC13, particularly relating to agricultural trade, where delivering outcomes on food security and domestic support reform remains challenging. While a declaration on emergency response to food insecurity was one of the MC12 outcomes, the priority now is its implementation through an effective decision at MC13 which can alleviate prevailing and impending food insecurity, particularly in least-developed and net food-importing developing countries.

With concerns around climate change and sustainability becoming a mainstay of discussions on international cooperation, the WTO will need to arrive at a shared understanding of the role it can play in these global conversations. Trade measures and environmental sustainability will become even more intertwined in the future. How trade policy can contribute to environmental sustainability without creating new barriers to trade, particularly for developing countries, will be an issue the WTO membership will have to contend with at MC13 and beyond.

Reforms At WTO

Finally, systemic concerns and WTO reform will continue to occupy top priority in the remaining months till MC13. All eyes will be on the MC12 mandate of restoring a fully functioning dispute settlement system by 2024. If progress on this front is to be achieved, it will require intensifying discussions amidst a rapidly changing landscape of different proposals on the shape of dispute settlement reforms.

MC12 came as a shot in the arm for the WTO and breathed fresh life into the moribund institution. While success breeds success, we must be careful to not burden the WTO with unrealistic expectations for MC13.

MC13 will be held in the week of February 26, 2024. About two decades ago, on February 26, 2004, then WTO Director-General Supachai Panitchpakdi, delivering a speech in Washington DC, had said, “It is true that as the WTO’s importance to the world economy increases, so too does the challenge of making it work – there are more countries, more issues, trade is in the spot light as never before.”

The echoes of the past must serve as a guide to the future. We must not take the benefits of the rules-based multilateral trading system with the WTO at its centre for granted. It remains indispensable as a global public good, and is worth all the work required to preserve it.

Pradeep S Mehta & Advaiyot Sharma work for CUTS International, a global public policy research and advocacy group. Views are personal, and do not represent the stand of this publication.

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