The 12th Ministerial Conference of the World Trade Organization (WTO) ended in the early hours of 17 June with a series of long-awaited agreements. Despite initially very different positions (see EUROPE 12971/11, 12973/17), a consensus was reached on: - a decision on fisheries subsidies; - a decision on the intellectual property of Covid-19 vaccines (TRIPS waiver); - a statement on trade and health; - a decision and declaration on food security; - a work programme on e-commerce; - a work programme for reforming the WTO. However, the 164 members were unable to agree on a text on the reform of the agricultural system.
Pandemic response and intellectual property
The final sticking points on intellectual property rights for Covid-19 vaccines were overcome in the final hours of the night of 16-17 June. There was a divide between those calling for a temporary lifting of patents on vaccines, tests and treatments and those members who consider that intellectual property is not an obstacle to the distribution of vaccines.
The agreement reached provides additional flexibilities to WTO rules on intellectual property. This follows the proposal from the EU, South Africa, India and the US in their March 2022 Quadrilateral Agreement (see EUROPE 12912/9). The text provides for developing members to grant vaccine production licences to companies without the latter holding the vaccine patents and through all kinds of administrative acts. Many developing countries have so far not been equipped with the legal tools to apply the flexibilities that already exist in the WTO rules on intellectual property (TRIPS).
The United Kingdom, which maintained its opposition to the principle of the text, finally lifted its veto during the night. China and the US, which had been in talks for several days, also agreed on which countries will be eligible for the flexibilities. The exclusion of countries that exported more than 10% of the world’s Covid-19 vaccine doses, such as China, is removed. A victory for Beijing. Now, in the text, countries with the capacity to export doses are “encouraged” to adopt a binding declaration not to exploit these flexibilities.
Regarding the scope, it was decided that the agreement will only apply to vaccines, their components and means of production. In 6 months, members will decide on a possible extension to diagnostic tools and treatments.
The EU welcomed the agreement, after a year and a half of discussions. For advocates of a broader lifting of patents, however, the text does not sufficiently address the needs of the least developed countries: “The WTO deal on the TRIPS waiver is disappointing. [...] A victory for ‘Big Pharma’, and a heavy responsibility for the EU”, lamented MEP Sara Matthieu (Greens/EFA, Belgium).
See the agreement: https://aeur.eu/f/26s
WTO members also adopted a declaration on trade and health that includes a reference to the agreement on intellectual property. In the text, they stress the importance of open trade in particular for the production and distribution of Covid-19 vaccines. They stress the need for transparency on trade measures, coordination between States and the need for better pandemic preparedness in general.
See the statement: https://aeur.eu/f/26x
Fisheries subsidies
The negotiating mandate on fisheries dates from 2005. It is therefore a historic agreement between WTO members, who adopted the text of the decision by consensus.
It prohibits subsidies to operators engaged in illegal, unreported and unregulated fishing activities or fishing-related activities on overfished stocks. The reference to subsidies contributing to overfishing and overcapacity was finally removed from the agreement.
Developing countries are given a two-year period to adapt, and will not be subject to these provisions during this period.
India thus obtained broad concessions. “The [MC12] forum echoes India on many issues, making it a reliable partner for the common good”, said Indian Trade Minister Piyush Goyal.
Speaking to EUROPE, EU Trade Commissioner Valdis Dombrovskis said the agreement “does not cover comprehensively the whole areas which were meant to be covered by the agreement, but it’s an important and major first step, to be followed on”.
See the decision: https://aeur.eu/f/26t
Moratorium on e-commerce
This was a very important subject for the EU. WTO members approved the extension of the moratorium on e-commerce until the next Ministerial Conference (MC13), which is expected to be held by 31 December 2023. “Should MC13 be delayed beyond 31 March 2024, the moratorium will expire on that date unless Ministers or the General Council take a decision to extend”.
The countries that were reluctant (South Africa, India, Indonesia, Pakistan and Sri Lanka) finally agreed to the extension.
This extension is “vital for SMEs and for the digital transition”, said Valdis Dombrovskis.
See the text: https://aeur.eu/f/26r
Food security
Two texts were adopted in relation to food security in an attempt to counter the current crisis and potential future crises.
The first is a ministerial declaration in which members commit themselves to facilitating trade, in particular of agri-food products. Members “reaffirm the importance of not imposing export prohibitions or restrictions in a manner inconsistent with relevant WTO provisions”.
Emergency measures taken by countries in response to food security concerns should minimise disruption to trade as far as possible, be temporary, targeted, transparent and proportionate. They must also be notified to the WTO.
The language has also been strengthened to take into account the needs of the least developed countries as well as those of net food-importing developing countries.
The issue of public stockholding for food security purposes has been more or less left aside and will have to be addressed in depth in the reform of the agricultural system. This issue is also one of the reasons why the work programme on the reform of the agricultural system could not be approved at MC12.
See the ministerial declaration: https://aeur.eu/f/26q
Secondly, a ministerial decision was adopted to prohibit members from imposing export prohibitions or restrictions on food products purchased by the UN World Food Programme (WFP).
The text, which consists of only two articles, provides, however, that the above provision shall not interfere with a country’s adoption of measures to ensure its food security. Again, this provides a safety net for countries that wanted to have flexibility in the conduct of their policies.
See the decision: https://aeur.eu/f/26p
WTO reform
Finally, the MC12 was an opportunity to begin working on the reform of the organisation. There is broad agreement among its members that the WTO is currently dysfunctional, particularly with regard to its dispute settlement system. In a general outcome document, members recalled the importance of the rules-based multilateral system and stressed the importance of special and differential treatment for the least developed countries (LDCs).
An issue important to them was the mention of the graduation process, which consists of LDCs moving away from this status. “We acknowledge the particular challenges that graduation presents, including the loss of trade-related international support measures [...] We recognise the role that certain measures in the WTO can play in facilitating smooth and sustainable transition for these Members after graduation from the LDC Category”.
“The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time”, said the organisation’s Director General, Ngozi Okonjo-Iweala.
Reacting to the series of agreements reached in Geneva, the chairman of the European Parliament’s Committee on International Trade, Bernd Lange (S&D, Germany), expressed relief: “We need to look at the package in detail, but I am relieved that the system has survived and we are now on a path to reform”.
The 164 members of the WTO have agreed to hold the next Ministerial Conference before 31 December 2023, returning to an annual conference cycle.
The EU27 shared the Commission’s positive assessment of the package achieved at MC12.
See the conclusions adopted by the Trade Council on 17 June: https://aeur.eu/f/26y (Original version in French by Léa Marchal)