The Financial Express

Silver lining to deferred WTO meet

Silver lining to deferred WTO meet

From Tuesday next, trade ministers of more than 160 countries were scheduled to gather in Geneva to negotiate some critical issues of global trade rules. The four-day event, the 12th ministerial conference (MC12) of the World Trade Organization (WTO), has been postponed on last Friday night for an indefinite period due to fresh upsurge of Covid-19 in Europe. Ministerial conference is the highest decision-making platform of the member countries.

The postponed conference was important for various reasons. First, it was taking place in the post-Covid world where many things have already been changed in terms of trade. Second, it is the 20th year of the inconclusive Doha Development Round which was initiated in 2001 at the MC4 of the WTO. Third, the WTO is already in anexistential crisis as its dispute settlement mechanism has come to a standstill and requires revival. 

The post-Covid setting becomes critical as India and South Africa the last October made a proposal requesting a temporary waiver of  certain provisions of the TRIPS Agreement for the prevention, containment and treatment of Covid-19. The proposal has been supported by Bangladesh and many other developing nations. Putsimply, developing nations want a patent waiver for manufacturing, supplying and procuring Covid vaccines and drugs at low costs.  Developed nations have been, however, arguing that the patent waiver may not be the appropriate and the 'most effective way to address the shortage and inequitable distribution of and access to vaccines and other COVID-19-related products.' Thus, it was unlikely to get any positive deal regarding the waiver of intellectual property rights (IPR) in the MC12.So, developing nations have to continue their effort to negotiate with the developed countries to reach a consensus on the patent waiver in the future.

Now, the postponement of the conference brings an opportunity for the developing nations to strongly push for the IPR waiver immediately to fight against the deadly virus. WTO DG NgoziOkonjo-Iweala rightly said: "This new variant reminds us once again of the urgency of the work we are charged with." She also mentioned that the negotiation should continue and representatives of the member countries in Geneva need to be fully empowered in this regard.

Another critical thing for the MC12 was the status and future of Doha round. Since 2001, developed and developing countries have been bargaining hard to make a deal on farm subsidy, market access for non-agriculture products and services and some other issues.

So far, the progress is disappointing and negotiators have become exhausted. In the MC10 in Nairobi in 2015, it became clear that developed and even some developing countries were no more interested to continue the Doha negotiation. It is reflected in the Nairobi ministerial declaration. In the MC11, which took place in the Argentine capital Buenos Aires in 2017, member countries failed to adopt any ministerial declaration. Since then, there has been no discussion relating to Doha round and the indication is there that there will be no mention of Doha round. Most of the members have silently accepted that it will be imprudent to talk on the Doha agenda. Though the postponed MC12 was unlikely to abandon or conclude the round formally, as doing so will be recognition of failure, there was an indication that the round would be buried informally or indirectly.

WTO has two core functions. One is to prepare and update rule books for global free trade and facilitate the countries across the world to do rule-based trade. The idea behind rule-books is to provide a level-playing field for the trading partners so that no one gets undue or extra leverage. The rule books, however, is subject to regular revision in line with the global change. Member countries of the WTO are thus entrusted with the task of  negotiating trade rules using the WTO platform.  The ministerial conference provides the formal opportunity to finalise negotiations on different trade rules and regulations that become obligatory for all the members.

Another core function of the multilateral trade body is to settle the trade disputes among the member countries. Disputes arise for various reasons and make trade difficult for the trading partners. The dispute settlement mechanism of the WTO provides a legal framework and platform for the countries to resolve their differences and address their grievances in case international trade rules and norms are violated. The mechanism, however, come under attack from the United States (US) which has blocked the appointment of the appellate jury since 2019. Without having a minimum number of appellate members, hearing the appeal against panel report becomes impossible and so the body virtually became defunct.  There was no sign that the US is going to withdraw its objection or veto and clear the way for appointing juries in the appellate body.  Without making the dispute settlement body fully functional, the role of WTO in global trade rulemaking will be weaker. The postponement of MC12, however, opens a different scope for members to negotiate with the US informally to withdraw its objection.

Bangladesh along with other Least Developed Countries (LDCs) has been trying to negotiate the continuation of preferential trade treatments for the graduating LDCs for at least six to nine years. So far, there is no positive response in this connection. Other members, developed and non-LDC developing countries to be precise, are yet to agree in principle on the necessity or justification of the proposed continuation of benefits for graduating LDCs.  Thus, the suspended conference would not bring any positive outcome in this connection. Now, LDCs need to put their best effort to keep the agenda live in the multilateral trade negotiation without irritating or frustrating other members especially the key players in the WTO.    

Development before the last moment suspension of the conference makes it clear that a declaration would be made at the end of the four-day conference, scheduled to be concluded on December 3. Members have already agreed on curbing the fisheries subsidies, with some differences, to stop overexploiting the sea and ocean fishes for trade.  Now, the postponement of the MC12 for the second time is disappointing as countries are desperately looking for some positive breakthrough. Nevertheless, deferment of the 12th WTO Ministerial Conference (MC12)   also brings an opportunity to devise new routes of negotiation and cooperation as the pandemic situation still prevails.

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