Posts By Terence P. Stewart

Climate change and a border tax — will the U.S. and EU have a unified position at the WTO in 2021?

The European Union has been working on reducing its carbon footprint consistent with the Paris Agreement commitments and its updated 2030 reduction levels. Part of its effort has been to impose costs on carbon content of certain high energy-consuming industries. To avoid carbon leakage, the EU has been looking at the possibility of imposing a carbon border adjustment mechanism. The European Commission’s work program has the EC presenting a draft proposal of such a mechanism in the second quarter of 2021. See EU Green Deal (carbon border adjustment mechanism), https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/12228-Carbon-Border-Adjustment-Mechanism. The Inception impact assessment released by the European Commission is embedded below.

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The EU has indicated that whatever action it takes in its carbon border adjustment mechanism will be consistent with WTO obligations.

The Biden Administration, in the President’s 2021 Trade Policy Agenda, has indicated an openness to considering a carbon border adjustment. See 2021 Trade Policy Agenda and 2020 Annual Report of the President of the United States on the Trade Agreements Program, March 2021, page 3, https://ustr.gov/sites/default/files/files/reports/2021/2021%20Trade%20Agenda/Online%20PDF%202021%20Trade%20Policy%20Agenda%20and%202020%20Annual%20Report.pdf. The section on “Putting the World on a Sustainable Environment and Climate Path” is copied below (emphasis added).

“The United States and the global community face a profound climate crisis, and the Biden Administration is committed to pursuing action at home and abroad to avoid the increasingly disruptive and potentially catastrophic impact of climate change. The United States will work with other countries, both bilaterally and multilaterally, toward environmental sustainability.

“As part of this whole-of-government effort, the trade agenda will include the negotiation and implementation of strong environmental standards that are also critical to a sustainable climate pathway. These standards will include promoting sustainable stewardship of natural resources, such as sustainable fisheries management, and preventing harmful environmental practices, such as illegal logging and wildlife trafficking. This comprehensive approach may also entail leveraging our strong bilateral and multilateral trade relationships to raise global climate ambition.

“The Biden Administration will work with allies and partners that are committed to fighting climate change. This will include exploring and developing market and regulatory approaches to address greenhouse gas emissions in the global trading system. As appropriate, and consistent with domestic approaches to reduce U.S. greenhouse gas emissions, this includes consideration of carbon border adjustments. Additionally, the Biden Administration will work with allies as they develop their own approaches and act against trading partners that fail to meet their environmental obligations under existing trade agreements.

“The trade agenda will support the Biden Administration’s comprehensive vision of reducing greenhouse gas emissions and achieving net-zero global emissions by 2050, or before, by fostering U.S. innovation and production of climate-related technology and promoting resilient renewable energy supply chains.”

President Biden’s Special Envoy on Climate traveled to the United Kingdom and to the European Union the week of March 8. See U.S. Department of State, Special Presidential Envoy for Climate John Kerry Engages European Allies on Climate Ambition, March 6, 2021, https://www.state.gov/special-presidential-envoy-for-climate-john-kerry-engages-european-allies-on-climate-ambition/ (traveling to London, Brussels and Paris March 8-10). A Financial Times article indicated that Special Envoy Kerry was pushing the European Commission to hold up any announcement on a carbon border adjustment mechanism until after the November 2021 meeting of parties to the Paris Agreement in Glasgow (COP26) to see if sufficient commitments were made to make such a mechanism unnecessary. The article indicated that a draft proposal was expected from the EC in June. See Financial Times, John Kerry warns EU against carbon border tax, March 12, 2021, https://www.ft.com/content/3d00d3c8-202d-4765-b0ae-e2b212bbca98 (“The former secretary of state told the Financial Times he was ‘concerned’ about Brussels’ forthcoming plans for a carbon border adjustment mechanism and urged the EU to wait until after the COP26 climate change conference in Glasgow to move forward.”).

Obviously, Special Envoy Kerry’s comments prioritize diplomacy over development of a mechanism to deal with countries who are slow to address the pressing climate challenges. The EU system, of course, has a process for approving proposals like the carbon border adjustment mechanism which if followed as presently planned presumably would not result in adoption in 2021. It is not clear from the press article if the U.S. concern is with the planned June proposal or with ensuring that no adoption happens until after the Glasgow meeting in November. If the latter, there should be little problem for the EU to ensure no adoption in 2021, and the EC proposal could include language about the COP 26 meeting. If the former, postponing action by the EC would push back adoption by at least six months which may or may not be acceptable to the EU.

With USTR nominee Katherine Tai expected to be confirmed by the U.S. Senate later this week, it is unclear based on the press article of the meeting between the EC and Special Envoy Kerry if USTR would hold up efforts to find common ground with the EU on the trade approach on climate change, including on what a carbon border adjustment mechanism would look like so that there is a united front between the U.S. and the EU whenever the mechanism is presented (or at least adopted).

With China, the largest emitter, having announced that it will continue to increase it emissions until 2030, the efforts of the EU and U.S. to speed up the global reductions in emissions will face insurmountable obstacles if there isn’t greater efforts by all, including China. See Politico, US and EU search for a China climate doctrine that works, The first European trip by US climate envoy John Kerry sparks a joint effort to get China to cut its emissions, March 9, 2021, https://www.politico.eu/article/u-s-and-eu-search-for-a-china-climate-strategy-after-snub/.

There is little doubt that if all major emitters are not in solidarity on the need to increase the depth of carbon reductions quickly, there will be carbon border adjustment mechanisms put in place by the EU and likely by the U.S. to ensure actions taken in countries working hard toward major reductions in emissions by 2030 are not undermined by less ambitious objectives. A joint effort by the U.S. and EU would be more effective than the EU going it alone. Let’s hope common ground is found on how to proceed.

COVID-19 vaccines — U.S., Japan, India and Australia agree to one billion doses for Indo-Pacific countries

In a post earlier today, I reviewed a Chatham House event which looked at issues surrounding ramping-up production, dealing with supply chain issues and other matters affecting production and distribution of COVID-19 vaccines. See March 12, 2021, The 8-9 March  “Global C19 Vaccine Supply Chain and Manufacturing Summit” – efforts to ramp-up production, https://currentthoughtsontrade.com/2021/03/12/the-8-9-march-global-c19-vaccine-supply-chain-and-manufacturing-summit-efforts-to-ramp-up-production/

Today, the U.S., Japan, India and Australia held a head of government remote Quad meeting. One of the outcomes being reported in the press was agreement that the United States and Japan would pay for, India would produce and Australia would distribute one billion doses of COVID vaccine for the Indo-Pacific region. See Financial Times, US and Asia allies launch major vaccine drive to counter China, The 1bn Covid jabs will be funded by US and Japan, made in India and distributed by Australia, March 12, 2021, https://www.ft.com/content/bcf5ff42-ac7f-4533-8fc2-b3e50a5e13ba.

The White House fact sheet on the quad meeting is available on the White House webpage. The portion dealing with the COVID-19 vaccines is copied below. See White House, Fact Sheet: Quad Summit, March 12, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/12/fact-sheet-quad-summit/. The one billion doses will be made available in 2021 and will be done in consultation with WHO, COVAX and others.

The Quad Vaccine Partnership

“While ensuring that vaccines have been made available to our people, “Quad” partners will launch a landmark partnership to further accelerate the end of the COVID-19 pandemic. Together, Quad leaders are taking shared action necessary to expand safe and effective COVID-19 vaccine manufacturing in 2021, and will work together to strengthen and assist countries in the Indo-Pacific with vaccination, in close coordination with the existing relevant multilateral mechanisms including WHO and COVAX.

“o Drawing on each of our strengths, we will tackle this complex issue with multi-sectoral cooperation across many stages of action, starting with ensuring global availability of safe and effective vaccines.

“o Quad partners are working collaboratively to achieve expanded manufacturing of safe and effective COVID-19 vaccines at facilities in India, prioritizing increased capacity for vaccines authorized by Stringent Regulatory Authorities (SRA). Quad partners will address financing and logistical demands for production, procurement, and delivery of safe and effective vaccines. Quad partners will work to use our shared tools and expertise, through mechanisms at institutions including the United States Development Finance Corporation (DFC), Japan International Cooperation Agency (JICA), and, as appropriate, Japan Bank of International Cooperation (JBIC), as well as others.

“o The United States, through the DFC, will work with Biological E Ltd., to finance increased capacity to support Biological E’s effort to produce at least 1 billion doses of COVID-19 vaccines by the end of 2022 with Stringent Regulatory Authorization (SRA) and/or World Health Organization (WHO) Emergency Use Listing (EUL), including the Johnson & Johnson vaccine.

“o Japan, through JICA, is in discussions to provide concessional yen loans for the Government of India to expand manufacturing for COVID-19 vaccines for export, with a priority on producing vaccines that have received authorization from WHO Emergency Use Listing (EUL) or Stringent Regulatory Authorities.

“o Quad partners will ensure expanded manufacturing will be exported for global benefit, to be procured through key multilateral initiatives, such as COVAX, that provide life-saving vaccines for low-income countries, and by countries in need.

“o Quad partners will also cooperate to strengthen ‘last-mile’ vaccination, building on existing health-security and development programs, and across our governments to coordinate and strengthen our programs in the Indo-Pacific.

“o This includes supporting countries with vaccine readiness and delivery, vaccine procurement, health workforce preparedness, responses to vaccine misinformation, community engagement, immunization capacity, and more.

“o Australia will contribute US$77 million for the provision of vaccines and “last-mile” delivery support with a focus on Southeast Asia, in addition to its existing commitment of US$407 million for regional vaccine access and health security which will provide full vaccine coverage to nine Pacific Island countries and Timor-Leste, and support procurement, prepare for vaccine delivery, and strengthen health systems in Southeast Asia.

“o Japan will assist vaccination programs of developing countries such as the purchase of vaccines and cold-chain support including through provision of grant aid of $41 million and new concessional yen loans, ensuring alignment with and support of COVAX.

“o The United States will leverage existing programs to further boost vaccination capability, drawing on at least $100 million in regional efforts focused on immunization.”

Conclusion

The solution to the COVID-19 pandemic involves greater cooperation among governments, international organizations, manufacturers, suppliers and others. The Quad’s announcement today is an important step in helping bring the pandemic to a close.

The 8-9 March “Global C19 Vaccine Supply Chain and Manufacturing Summit” — Efforts to Ramp-Up Production

On Monday and Tuesday of this week, the Chatham House hosted an event that was”sponsored by COVAX (the COVID-19 vaccine initiative led by the World Health Organization, the Coalition for Epidemic Preparedness Innovations and Gavi, the Vaccine Alliance), together with the Developing Countries Vaccine Manufacturers Network (DCVMN), the Biotechnology Innovation Organization (BIO), and the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA).” WTO, DG calls on COVID-19 vaccine manufacturers to increase production in developing countries, March 9, 2021, https://www.wto.org/english/news_e/news21_e/dgno_09mar21_e.htm. Because the event was conducted under Chatham House rules, the information available is from the participants’ releases.

The participants had a document and apendix to provide some factual background to help the discussion. “Towards Vaccinating the World: Landscape of Current COVID-19 Supply Chain and Manufacturing Capacity, Potential Challenges. Initial Responses, and Possible “Solution Space” — a Discussion Document” is the 28 page background document. It is accompanied by a 12 page Appendix. The introduction provides a useful overview of efforts to address the COVID-19 pandemic and the areas for discussion at the meeting. The introduction is copied below and is followed by both the background document and appendix being embedded.

Introduction

“I feel like I didn’t just get a vaccine, I got a shot of hope. It’s hope that this is the beginning of the end of this terrible pandemic.” – Dr Hagan, Frontline Worker1

“With over 2.6 million deaths as of 3rd March 2021,2 and economic cost estimated at 5-14 trillion USD per year3 due to COVID-19, mitigating the pandemic is a paramount global priority and vaccines are a critical part of the solution.

“Since the start of the COVID-19 pandemic, the world has seen unprecedented progress in vaccine development, manufacturing ramp-up, and deployment. Within a record time of less than a year, 11 vaccines are already in clinical use in the countries where they obtained approval (often with emergency/limited authorisation), more than 80 additional candidates are in clinical trials, and hundreds of candidates are in the pre-clinical phase. At the same time, vaccine manufacturers and suppliers of vaccine components are scaling up for COVID-19 vaccine production from zero to billions of doses, with an announced cumulative supply target of up to 14 billion doses by the end of 2021. This represents three to four times the pre-COVID-19 annual global demand for all vaccines of 3.5-5.5 billion.4 The impact of these efforts is starting to be seen, with over 270 million people globally vaccinated as of 3rd March 2021.5

“The increase in capacity is remarkable because of the complexity of vaccine manufacturing processes that require specific know-how and equipment. It usually takes more than five years to build manufacturing capacity and 18-30 months to transfer production to other sites or manufacturers.6 The use of new technologies such as mRNA in response to COVID-19 poses additional challenges because no large-scale manufacturing capacity nor specific raw materials existed at the outset of the pandemic. COVID-19 vaccine manufacturers ramped up their own manufacturing in parallel to clinical development (“scale-up”) in response to this challenge. They also formed more than 150 partnerships7 with contract development and manufacturing organisations (CDMOs) and other multinational biopharmaceutical companies to transfer their technology and increase their overall production (“scale-out”). Notwithstanding these efforts, the strain on manufacturing capacities and capabilities is very high, in light of the immediacy and scale of the demand, which may be exacerbated further if a broader coverage of the population is needed and if boosters are needed due to waning efficacy and need to protect from new variants.

“However, it has become apparent that many COVID-19 vaccine input supplies of raw and packaging materials, consumables and equipment are in short supply which may result in several COVID-19 vaccine manufactures not being able to meet their current vaccine manufacturing commitments. Such shortages will also impact the ability to manufacture other lifesaving vaccines and biologics. Mechanisms to ensure input supplies for current and increased manufacturing capacity intent need to be put in place with short, medium and long-term solutions.

“Supply of COVID-19 vaccines will more than double the annual volume of vaccines procured via UNICEF. These additional COVID-19 vaccine needs from manufacturers of routine vaccines and other essential supplies is of concern to UNICEF. There is a need for expanded manufacturing capacity while building on existing mechanisms to sustain and scale current investments that the Vaccine Alliance has achieved thus far.

“The summit will evaluate all potential bottlenecks of supply chain for input supplies, from manufacturing, through procurement, export, delivery and use of the materials for COVID-19 vaccine manufacture. It is of paramount importance to anticipate, understand, and establish an open dialogue with all stakeholders to find and implement additional short-term and sustainable solutions to the inevitable supply chain challenges.

“For this reason, Chatham House – with co-sponsorship from COVAX (CEPI, Gavi, WHO, UNICEF), IFPMA, BIO, and DCVMN – has convened the COVID-19 Vaccine Manufacturing and Supply Chain Summit with key public, private, and other vaccine stakeholders on 8th and 9th March 2021, to explore the emerging input supply challenges in depth and to start to work towards strategies to avoid or mitigate them. The main goals of the Summit are:

“▪ Help to identify and define the most critical bottlenecks across the supply network for a diverse array of COVID-19 vaccines with an emphasis on input supply

“▪ Provide a platform to explore a range of solutions to address bottlenecks.

“▪ Lead to a series of recommendations, and ideally commitments, on the priority areas for monitoring and/or action.

“Today, the only element that can be predicted about the future is its high degree of uncertainty. The objective of this document is to provide a structured fact base to serve as background for participants, not to attempt to predict any aspect of the future course of this pandemic. This fact base builds on perspectives and information developed and provided by Summit conveners and participants. Given the rapid pace of events in this space, it should be considered as a ‘best effort’ guide towards a high-level analysis and assessment of the state of play today but it is unlikely to be complete and may have omissions. Any estimates should be validated before being used for decision-making. The discussion document should be viewed as a discussion guide for participants and is structured into the following sections:

“1. Introduction to Vaccine Manufacturing and Supply Chain

“2. COVID-19 Vaccine Supply and Demand Overview

“3. Input Supply Challenges

“4. Manufacturing Capacity and Interdependencies beyond COVID-19 Vaccine

“5. Overview of Potential Solutions for Discussion

“6. Moving to Action

In parallel to the Chatham House Summit, many discussions are ongoing on how further to increase available manufacturing capacity of vaccine drug substance/drug product and accelerate technology transfer.

The purpose of this Summit, and this discussion document, is not aimed to identify or assign responsibility. COVID-19 is an exceptional crisis with unforeseen and shifting challenges. The aim is to bring stakeholders together to understand and align on how to move forward together leveraging their combined capabilities to optimise access to vaccines against COVID-19 for good of the world.

“1 New York Times, ‘A Shot of Hope’: What the Vaccine Is Like for Frontline Doctors and Nurses. 2020. https://www.nytimes.com/2020/12/14/us/coronavirus-vaccine-doctors-nurses.html

“2 WHO; Economist

“3 Airfinity; IMF

“4 WHO Global Vaccine Market Report 2019, 2020. http://who.int/immunization/programmes_systems/procurement/mi4a/platform/module2/2019_ Global_Vaccine_Market_Report.pdf?ua=1#:~:text=Global%20market%20volumes%20increased%20approximately,large-scale%20campaigns%20in%20India.

“5 WHO, WHO Coronavirus Disease (COVID-19) Dashboard. https://covid19.who.int/; Bloomberg, COVID-19 Vaccine tracker. https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/

“6 McKinsey & Company, Why tech transfer may be critical to beating COVID-19. 2020. https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/why-tech-transfer-may-be-critical-to-beating-covid-19

“7 Airfinity”

Summit_Landscape_Discussion_Document

Summit_Landscape_Discussion_Document_Appendix

The background paper is useful by pulling together information on demand, likely production, a review of the challenges in supply chains, and the fact that globally only 3% of likely 2021 vaccines had been manufactured by March 3, 2021, meaning there are huge production increases coming in the remaining ten months driven by more vaccines being approved for use by countries and the WTO. Several exhibits from the report are copied below (Exhibit 2, page 7; Exhibit 5, page 12; Exhibit 6, page 14; Exhibit 7, page 16) and show the distribution of manufacturers with approved vaccines or vaccines in third stage trials, projected supply under three scenarios, input supply bottleneck issues, and a “summary of major supply challenges and drivers”.

There was a joint press release which is embedded below. See Global C19 Vaccine Supply Chain and Manufacturing Summit Press Release, March 9, 2021, https://www.dcvmn.org/IMG/pdf/global_covid-19_vaccine_supply_chain_manufacturing_summit_press_release_1_.pdf.

global_covid-19_vaccine_supply_chain_manufacturing_summit_press_release_1_

Several paragraphs on the first page review the supply chain issues and then review areas for potential additional work. Because of their importance, they are copied below (emphasis added).

“Vaccine manufacturers and upstream suppliers are increasingly reporting shortages of raw and packaging materials, critical consumables, and equipment. Over time such shortages, if left unaddressed, will lead to shortages of vaccines and impact delivery commitments. Such shortages will also impact the ability to manufacture other lifesaving vaccines and biologics. Preventing bottlenecks in the system requires among others: addressing export restrictions, immediate easing and facilitation of access to raw materials and upstream supplies; regulatory prioritization of validation of supply, batch release and achieving greater visibility on vaccines demand forecasts to enable upstream suppliers to do better supply planning.

“All stakeholders agreed there is a need to expand capacity and in a way that promotes equitable access and leaves no one behind. Other approaches were discussed including:

“1. Free flow of goods and workforce;

“2. Continue technology transfer and manufacturing partnerships between innovators and manufacturers to scale up and scale out COVID19 vaccine capacity;

“3. Better demand forecasting and inventory management of raw materials and critical consumables;

“4. Support from the highest political level is needed;

“5. Value of regulatory harmonization and streamlining to accelerate manufacturing capacity and supply;

“6. Better production, demand and supply, forecast and visibility;

“7. Give consideration to the potential impacts of COVID-19 production on non-COVID products

The quotes from the six organizations participating fell along predictable lines — CEPI’s CEO focused on the need to address bottlenecks to ensure delivery of supplies; IFPMA’s DG reviewed the huge build up of capabilities and need to address bottlenecks while recognizing the need to continue to expand capacity; the CEO of GAVI viewed the event as “an important step in building the global consensus needed to solve the bottlenecks and supply constraints”; the WHO’s chief scientist focused on equitable distribution and in the “longer term more sustainable approach will be to enable technology transfer to manufacturing sites in LMICs that have the capacity”; the President and CEO of BIO noted that “We must invest across all of the ecosystem to ensure that there is not only manufacturing capacity but also increasing amounts of the vital production supplies needed for that capacity”; the President of the DCVMN focused on expanding production in developing countries, “Global products, local manufacturing, and leave no one behind.”

The WTO’s Director-General Ngozi Okonjo-Iweala who is a former Chair of GAVI, spoke to the participants on March 9 urging licensing and partnerships with vaccine manufacturers in developing countries and repeating her themes of recent days of focusing on ending or phasing out export restrictions. See WTO, DG calls on COVID-19 vaccine manufacturers to increase production in developing countries, March 9, 2021, https://www.wto.org/english/news_e/news21_e/dgno_09mar21_e.htm. The press release is copied below.

“Director-General Ngozi Okonjo-Iweala on 9 March called on COVID-19 vaccine manufacturers to do more to ramp up production in developing countries to combat the vaccine supply shortage that is excluding many lower-income nations from access. In remarks to an event hosted by the UK think tank Chatham House, she said cooperation on trade, and action at the WTO, would help accelerate vaccine scale-up.

The scarcity of COVID-19 vaccine supplies had led to a situation in which around 75 countries are able to move ahead with vaccination while 115 countries wait as people die, DG Okonjo-Iweala told the Global C19 Vaccine Supply Chain and Manufacturing Summit.

Not only was this morally “unconscionable,” she said, it would prolong the pandemic and cause economic harm to all countries. Instead of restricting exports and bidding up prices, she argued, “it is in all of our self-interest to cooperate in dealing with this problem of the global commons.”

The Director-General saw cause for hope in the first vaccine deliveries to developing countries by the COVAX facility, the global mechanism for procuring and equitably distributing COVID-19 vaccines. Nevertheless, production and delivery volumes remained too low.

“We have to scale up and scale out COVID-19 vaccine production, particularly in emerging markets and developing countries,” she said. Given the years required to build new manufacturing facilities from scratch, increasing production in the short-term means “making the most of existing manufacturing capacity — finding existing sites and turning them around.” Recent experience suggests that repurposing facilities and vetting them for safety and quality can happen in six or seven months, less than half as long as previously thought.

“By bringing more production online around the world, she said, vaccine manufacturers would send a signal that they are taking action, and ‘that people and governments in low- and middle-income countries can expect to get access to affordable vaccines within a reasonable timeframe.’

“DG Okonjo-Iweala observed that companies in India and elsewhere were already manufacturing COVID-19 vaccines under licence but said that more such arrangements are necessary.

“Discussions during the conference had highlighted three constraints to ramping up production, the Director-General noted: scarcity of raw materials, shortages of qualified and experienced personnel, and supply chain problems linked to export restrictions and prohibitions as well as excessive bureaucracy. The WTO’s mandate on trade facilitation, quantitative trade restrictions, and trade policy monitoring were relevant to the latter challenges in particular.

“Because vaccine production relies on sourcing components and ingredients from multiple countries, she said, trade restrictions would slow down production, and make it more expensive.

“Nevertheless, DG Okonjo-Iweala noted, WTO rules do allow for export restrictions or prohibitions to be ‘temporarily applied to prevent or relieve critical shortages’ of essential products. That said, such restrictions must be notified to all members. Restrictions should be transparent, proportionate to the problem at hand, and members should provide timelines for when they will be phased out, she said.

“She reported that WTO monitoring indicates that 59 members and 7 observers still had some pandemic-related export restrictions or licensing requirements in place at the end of February, primarily for personal protective equipment. It was welcome that these figures were lower than the 91 countries that had brought in such measures over the past year. However, ‘not all pandemic-related export restrictions have been notified,’ she said. ‘Not all of them appear to be temporary. Not all of them are proportionate.’

“’We must strengthen our monitoring and reporting function,’ DG Okonjo-Iweala said, explaining that her objective would be to encourage members to drop or reduce export restrictions, or set timelines for phaseout, to help minimize problems in the vaccine supply chain.

“With regard to trade-related bureaucracy, she invited manufacturers to tell the WTO about the problems they are encountering in real time, ‘so we can put them before our membership and find ways they can be minimized and if possible solved.’ She said a little-appreciated fact about trade policy during the pandemic is that members’ trade-facilitating measures, such as electronic customs procedures and simplified paperwork requirements, have far outnumbered trade-restricting policies, and covered a higher value of merchandise.

“On both export restrictions and trade facilitation, DG Okonjo-Iweala noted, prospects for action at the WTO would improve as businesses are seen to step up efforts on vaccine production.

“The Director-General referred to the ongoing debate at the WTO on a proposal to waive standard WTO intellectual property rules for COVID-related vaccines, therapeutics, and diagnostics.

“’Many of the proposal’s supporters are developing and least developed countries, deeply marked by the memory of unaffordable HIV/AIDS drugs,’ she told conference participants. ‘Many, many people died who should not have. More recently, they remember being left at the back of the queue for H1N1 vaccines as richer countries bought up available supplies, which in the end were not used.’ Critics of the proposed waiver, she noted, say it could threaten investment and innovation, and other members have asked for more evidence that intellectual property protections are an inhibiting factor in vaccine scale-up.

“While these ‘vitally important discussions are intensifying here in Geneva,’ she said, ‘the fact is that each additional day the vaccine shortage continues, people will pay with their lives.’ She argued that it was possible to ‘walk and chew gum at the same time,’ continuing the search for solutions in the TRIPS debate, while simultaneously taking action to increase production, ‘especially in emerging markets and developing countries where such possibilities exist.’

“She expressed hope that it would be possible for manufacturers from developed and developing countries to come together with civil society groups, organizations such as the World Health Organization, Gavi, and the Coalition for Epidemic Preparedness (which together run the COVAX facility), and business associations including the International Chamber of Commerce to find ways to increase vaccine production.

“’We must make sure that in the end we deliver so that the millions of people who are waiting for us with bated breath know that we are working on concrete solutions,’ she said.

“The 8-9 March ‘Global C19 Vaccine Supply Chain and Manufacturing Summit’ was convened by Chatham House and sponsored by COVAX (the COVID-19 vaccine initiative led by the World Health Organization, the Coalition for Epidemic Preparedness Innovations and Gavi, the Vaccine Alliance), together with the Developing Countries Vaccine Manufacturers Network (DCVMN), the Biotechnology Innovation Organization (BIO), and the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA). The meeting was held under the Chatham House rule, so the above report on the Director-General’s speech does not reflect views attributed to other participants.”

Conclusion

Countries around the world are starting the process of vaccinating their populations. The COVAX vaccine roll-out, which includes efforts to get doses to low- and middle-income countries, appears to be on target for its goal of two billion shots in 2021. While vaccine doses from COVAX started at the very end of February, by March 11, COVAX was reporting 28.5 million doses had been shipped to 37 countries. See Gavi, COVAX has so far shipped over 28.5 million COVID-19 vaccines to 37 countries, March 11, 2021, https://www.gavi.org/covax-vaccine-roll-out.

All countries working with vaccine producers have encountered some delays as manufacturers are having both start-up challenges at their own facilities and supply chain issues as reviewed in the background paper used by participants at this week’s Chatham House event. There are clearly supply chain issues that pose risks to current manufacturing efforts and already scheduled ramp ups of capacity. The major pharmaceutical groups have worked hard to develop capacity and upgrade supply chains. They all appreciate that more can and will be done.

There are a host of issues on COVID vaccines that need to be addressed that fall within the WTO’s wheelhouse — control of export restraints, easing and access to raw materials and upstream supplies to name two. As DG Okonjo-Iweala noted, the WTO TRIPS Council is considering whether to recommend a waiver of TRIPS obligations for medical products for COVID-19 use during the pandemic. Indeed another meeting of the TRIPS Council was held on March 10-11. See WTO, Members discuss TRIPS waiver, LDC transition period and green tech role for small business, March 11, 2021, https://www.wto.org/english/news_e/news21_e/trip_11mar21_e.htm. However, not only is the requested waiver opposed by major developed countries and at least one developing country (and hence unlikely to obtain consensus to forward to the General Council), but also a review of the background document shows the complexity of technology transfer in the best of situations. Pharmaceutical and biotech companies are opposed to the waiver and view such action as almost certain to slow the ramp up of production. See, e.g., IFPMA, Pharma delivers COVID-19 solutions, but calls for the dilution of intellectual property rights are counterproductive, 20 December 2020, https://www.ifpma.org/resource-centre/pharma-innovation-delivers-covid-19-solutions-beyond-expectations-but-calls-for-the-dilution-of-intellectual-property-rights-are-counteproductive/; Bio, Letter to President Biden, March 5, 2021, https://www.bio.org/letters-testimony-comments/bio-sends-letter-president-biden-discussing-collaboration-ensure-patient; PhRMA, letter to President Biden, March 5, 2021, https://phrma.org/Public-Communication/Letter-to-President-Biden-from-31-PhRMA-Board-Members.

The Chatham House event was a timely and practical effort to have the major participants review challenges currently being faced and to exchange ideas on how to move forward. Efforts such as we have seen under the Biden Administration to help address bottlenecks through the use of the Defense Production Act should be undertaken by other governments to help streamline the ramp up process for both vaccines and the key inputs and other materials needed for expanded production. The seven “other approaches” identified in the joint press release are sound and ambitious but will require not only government involvement (regulatory harmonization; support at the highest level of government) but also improved data gathering and dissemination (supply and demand forecasts). The size of the planned ramp up of production (assuming vaccines that are in stage three end up being approved and supply chain issues can be handled) as shown in Exhibit 5 of the background document is truly impressive. The addition of more capacity through additional licensing or partnership arrangements will further improve the outlook for 2021 for the world.

While COVAX was set up with the ambitious objective of 2 billion doses to the 192 countries (including 92 low- and middle-income countries were vaccines will be provided without charge) COVAX is serving in 2021, most scenarios in the background paper show the likelihood of additional billions of doses available by the end of the year. This suggests that the challenge may not be production but rather securing funding for the additional doses that will be available and/or movement of additional unneeded supplies from developed countries in the latter part of 2021. The G20 and others should be able to help with the financing. It is likely that doses may be available for transfer from at least some developed countries by the fourth quarter.

So there is a lot that is happening and lots that needs to be done to see that the COVID-19 pandemic is fully addressed. Waiving TRIPS obligations is not one of them.

“No Quick Fixes for WTO Dispute Settlement Reform” — a skeptical view by the former Deputy USTR of the EU’s willingness to address core U.S. concerns

In yesterday’s post, I reviewed a program hosted by Georgetown Law’s Institute for International Economic Law that looked at opportunities for transatlantic cooperation in WTO reform. See March 10, 2021, Today’s webinar hosted by Georgetown Law’s Institute for International Economic Law “Rethinking the WTO:  Opportunity for Transatlantic Cooperation” — many areas for likely cooperation; some important challenges, https://currentthoughtsontrade.com/2021/03/10/todays-webinar-hosted-by-georgetown-laws-institute-for-international-economic-law-rethinking-the-wto-opportunity-for-transatlantic-cooperation-many-areas-for-likely-cooperation-some-impo/. The focus of the program was the mid-February EC Trade Policy Review paper and Annex on WTO Reform. While there was agreement that there were many areas of possible U.S.-EC cooperation in pursuing WTO reform, Thomas Graham, a former Appellate Body Member and Chair, raised a caution about how quickly meaningful reform of the WTO dispute settlement system could be achieved. He referenced a commentary published by CSIS from Amb. Dennis Shea, the former U.S. Ambassador and Permanent Representative to the WTO during the Trump Administration. See Amb. Dennis Shea, No Quick Fixes for WTO Dispute Settlement Reform, March 9, 2021, https://www.csis.org/analysis/no-quick-fixes-wto-dispute-settlement-reform.

Ambassador Shea’s commentary is worth separate review. Amb. Shea starts by sharing his experience in 2018 as the new U.S. ambassador to the WTO in pressing the EU on whether they shared U.S. concerns about overreach and other problems in the Appellate Body’s functioning and being told that the EU shared none of the U.S. concerns. He then contrasts that position with the position staked out in the EC’s Trade Policy Review paper where there is a recognition that the U.S. “has raised ‘a number of valid concerns'”. The point of Amb. Shea’s initial comments is both to show skepticism as to whether the EU change of position is real and to point out comments by the EU which suggests a lack of understanding of the U.S. concerns or which indicate needed reversal by the EU of a number of positions taken in the past. Amb. Shea urges the Biden Administration not to take up negotiations before the U.S. is able to explore with the EU and others “why the Appellate Body felt free to overreach and why the WTO membership allowed it to occur for so long. A shared diagnosis of the problem will help lead to more durable solutions, including a possible rethinking of the dispute settlement system itself.” This is, of course, the position that Amb. Shea,for the Trump Administration, took consistently at the WTO during his tenure there.

There is little doubt that many WTO Members have been looking at very limited modifications to the WTO dispute settlement system as being adequate to address longstanding U.S. concerns — an approach repeatedly rejected by the prior Administration and unlikely to result in forward progress with the Biden Administration.

The Appellate Body was a new concept added at the end of the Uruguay Round. The binding nature of dispute settlement with an Appellate Body was premised on a limited role for the Appellate Body and assumed an ability of WTO Members to correct erroneous decisions through either negotiations or through interpretations adopted by the Ministerial Conference or the General Council. After 25 years, it is clear that the checks on the dispute settlement system that are included in the WTO Agreements have not functioned as intended or functioned at all. Coupled with the collapse of the negotiating function more broadly, the reality has been a dispute settlement system that has often made up rights and obligations on the fly. Why WTO Members have been ok with that usurpation of sovereign states’ right to limit obligations to those negotiated and agreed to is the fundamental question. It is at the heart of Amb. Shea’s commentary.

From some thirty years of traveling to Geneva, I have heard from nearly every major Member using the dispute settlement system that based on how the Appellate Body was operating, the Member believed it could obtain results through disputes that should be the subject of negotiations and that the Member knew had not been agreed by trading partners. Thus, obtaining rights without negotiations is certainly one of the reasons that many Members have accepted the actions of the Appellate Body that have exceeded its limited authority over time. There are undoubtedly other reasons. Understanding the reasons for Member acceptance of a dispute settlement system operating outside of its limited mandate presumably would be relevant to identifying solutions that would put dispute settlement back into its proper role and ensure errors can be addressed in fact, not just in theory.

Amb. Shea presents eight questions for European trade officials that raise some of the concerns the U.S. has and highlight where there have been significant differences in the positions staked out by the EU in prior cases from the statements in the EC Trade Policy Review paper.

The first question goes to the lack of precedent in WTO dispute settlement and whether the EU thus now recognizes that the Appellate Body erred when it mandated that panels follow Appellate Body reports “absent cogent reasons”. He also asks if the EU rejects “the view that the Appellate Body was vested with broad authority to develop ‘a coherent and predictable body of jurisprudence?'” The U.S. position has been that the dispute settlement process is intended to help the Members find a solution to a problem raised, and that the power to establish rights and obligations lies with the Members through negotiations.

The second question goes to the proper role of the Appellate Body — whether the role is limited to questions of law raised on appeal or extends to whether panels made an objective assessment of the facts under DSU Art. 11. The EU has supported the latter position in prior disputes which has often meant a relitigation of cases at the Appellate Body level.

The EU in its Trade Policy Review paper states that the 90-day deadline for Appellate Body reports should be “strictlly respected”. Because this is different than the position the EU exhibited during the first 25 years when the Appellate Body far exceeded 90 days on a regular basis, Amb. Shea in his third question asks “What has changed?” Problems with timeliness of reports exist both for the Appellate Body and for panels. The problem at the Appellate Body has been noteworthy because of early year compliance with the requirements and early outreach to disputants where 90 days couldn’t be met but an evolution of the Appellate Body’s approach to where extensions were taken without consultations with the disputants.

On the topic of “overreach” by the Appellate Body, Amb. Shea asks whether the EU agrees with the U.S. on cases other than the Appellate Body’s interpretation of “public body’ and if yes, how would the EU propose correcting these other prior rulings? (Question 4). Questions 5 and 6 address particular areas of concern (additional requirements in safeguard cases; the prohibition created by the Appellate Body on “zeroing” in antidumping duty investigations). As I have raised in prior posts, there will not be a resolution of the impasse on the Appellate Body until the problem of overreach is addressed and correction of past overreach has been achieved. While there has been overreach in areas besides trade defense agreements, the three examples raised in Questions 4-6 deal with major overreach problems in the subsidy/countervailing duty, safeguard and antidumping agreements.

Question 7 asks the EU if it agrees with the problems identified by former Appellate Body member Thomas Graham “including a ‘prevailing ethos’ to act like a court that was unaccountable to WTO members, an unjustified sense of infallibility, and an excessive degree of control exercised by its staff”. Mr. Graham at yesterday’s IIEL program argued for the need for greater accountability and the need for reexamining the structure of the dispute settlement — presumably addressing his prior observations on the problems of the Appellate Body. See March 10, 2021, Today’s webinar hosted by Georgetown Law’s Institute for International Economic Law “Rethinking the WTO:  Opportunity for Transatlantic Cooperation” — many areas for likely cooperation; some important challenges, https://currentthoughtsontrade.com/2021/03/10/todays-webinar-hosted-by-georgetown-laws-institute-for-international-economic-law-rethinking-the-wto-opportunity-for-transatlantic-cooperation-many-areas-for-likely-cooperation-some-impo/. The U.S.’s position has been that the Appellate Body is not a court. Indeed, the EU has agreed that the Appellate Body is not a court. See October 1, 2020:  Thoughts on the Geneva Trade Week session entitled “WTO Dispute Settlement – Where Do We Stand?”, https://currentthoughtsontrade.com/2020/10/01/thoughts-on-the-geneva-trade-week-session-entitled-wto-dispute-settlement-where-do-we-stand/ (EU Amb. Machado’s summary (as compiled by me) included that “The EU agrees that panels and the Appellate Body are not courts and that panelists and AB members are not judges. It is the role of WTO Members, not adjudicators, to establish new rules.”). The question in essence goes to how does reform of the dispute settlement system restore the very limited role panels and any second tier review have in helping parties find a solution to a dispute between Members.

Amb. Shea’s last question acknowledges two of the demands of the EU — binding decisions independently reached. But he questions the value of a two-tier system noting that over 25 years it has often been the U.S. view that panels reached the correct result and the Appellate Body the incorrect result. “Shouldn’t the focus be on reforming the WTO dispute settlement system (perhaps with an updated appellate review mechanism) rather than ‘reconstituting’ the Appellate Body?” Amb. Shea’s question seems to stress the institutional problems that the Appellate Body has developed over 25 years and the potential challenges to actually reforming the Appellate Body. But Amb. Shea doesn’t say a second-tier couldn’t work, just that Members should not be locked into restoring the Appellate Body as such.

Conclusions

USTR under the Trump Administration did an exceptional job of laying out U.S. concerns with the WTO Appellate Body over a 2-3 year period. Amb. Shea’s commentary reflects the fact that during the Trump Administration (and before), the EU’s positions on a host of issues important to the proper functioning of the dispute settlement system differed from those of the United States.

The EC’s Trade Policy Review paper and Annex on WTO Reform is an important document, including by showing movement by the EU on some issues of concern to the U.S. in the dispute settlement arena. Amb. Shea’s commentary highlights some of the issues that need to be resolved if there is to be a meeting of the minds between the U.S. and EU on Appellate Body reform, including addressing overreach including on past Appellate Body reports. As Mr. Graham reviewed yesterday and as Amb. Shea reviews in his question 7, reform includes the need for greater accountability of those involved. It also involves a significant contraction in the role any second-tier review handles.

While the approach advocated by Amb. Shea certainly has merit (gain an understanding of “why” the Appellate Body exceeded its authority and Members accepted such action before starting negotiations), it also is possible for the U.S. to start laying out reform needs realizing that some such reforms may go beyond the DSU and operating procedures of the Appellate Body to ensure meaningful checks and balances through the Members (currently hypothetically through Ministerial Conferences or the General Council) or through creating a different appeal mechanism for legal questions. But as Mr. Graham indicated yesterday, dispute settlement will not happen quickly and will be challenging based on the depth of the problems and the need for structural changes and changes in operating procedures as well as addressing the substantive needs.

While there seemed to be different views within the Trump Administration on whether dispute settlement should be binding, that is not the view of Amb. Shea in his commentary nor is it historically the view of the U.S. Congress (as long as Members have the authority to not implement an adverse decision and rather pay compensation or suffer retaliation) or prior Administrations (including the Trump Administration in its handling of disputes). While it is not known as yet the position of the Biden Administration, it is likely that a system that is binding and independent should be acceptable if properly limited and with meaningful crosschecks. I don’t know that there will be objections to a two-tier process, although the reforms needed may make the resulting second-tier look very different from the Appellate Body.

Reform of the dispute settlement system and restoration of a two-tier review is important to most WTO Members. Having focused Members attention on the importance of reform, the Trump Administration has handed off dispute settlement reform to the Biden Administration with WTO Members finally understanding that the longstanding concerns of the United States need to be addressed. The EC Trade Policy Review paper and Annex on WTO Reform shows movement by the EU on some issues of importance to the U.S. While the road forward is likely to be complicated and long, hopefully the Biden Administration will help the process move forward by identifying the array of changes that are needed in the coming months.

Today’s webinar hosted by Georgetown Law’s Institute for International Economic Law “Rethinking the WTO: Opportunity for Transatlantic Cooperation” — many areas for likely cooperation; some important challenges

On March 10, 2021 Georgetown Law’s Institute for International Economic Law (IIEL) held the second in a series of events on “Rethinking the WTO”, this time on “Opportunity for Transatlantic Cooperation”. See Georgetown Law, Rethinking the WTO: Opportunity for Transatlantic Cooperation, March 8, 2021, https://www.law.georgetown.edu/news/rethinking-the-wto-opportunities-for-transatlantic-cooperation/. The program was introduced by David Kleimann, Senior Visiting Research Fellow, IIEL. The program was moderated by Joost Pauwelyn, Murase Visiting Professor of Law, Georgetown Law and also a professor at the Graduate Institute of Geneva. The four panelists included Sabine Weyand, Director General, Directorate General for External Trade, European Commission; Jennifer Hillman, Professor from Practice, Georgetown Law, Senior Fellow, Council on Foreign Relations and a former member of the WTO Appellate Body; Thomas Graham, partner at Cassidy Levy Kent and former member and Chair of the WTO Appellate Body; and Henry Gao, Associate Professor of Law, Singapore Management University, Dongfang Scholar Chair Professor, Shanghai Institute of Foreign Trade and Advisory Board Member of the WTO Chairs Program.

Ms. Weyand provided an overview of the European Commission’s revised trade policy paper, focusing on the Annex dealing with WTO reform. I had reviewed the revised policy paper in a prior post. See February 18, 2021, The European Commission’s 18 February 2021 Trade Policy Review paper and Annex — WTO reform and much more proposed, https://currentthoughtsontrade.com/2021/02/18/the-european-commissions-18-february-2021-trade-policy-review-paper-wto-reform-and-much-more-proposed/. Ms. Weyand’s comments expressed hope that early statements by the Biden Administration meant that there were many areas for possible cooperation, although she started with reviving the Appellate Body — an area where cooperation is more challenging. She articulated that the EU was looking for an early commitment by the Biden team that the U.S. supported a two-tiered, binding, independent dispute settlement system — that which was promised in the Dispute Settlement Understanding. She acknowledged that the U.S. had valid concerns including on overreach on some cases.

Ms. Weyand reviewed areas where collaboration had occurred during the Trump Administration — the joint consultations on subsidies, SOEs, forced technology transfer — and opined that the process should be taken back up. She also mentioned new areas where rules were needed, including Joint Statement Initiatives (electronic commerce where the U.S. is active and others where the U.S. is not) where there should be opportunities for collaboration. She viewed that open plurilaterals were the likely necessary option for reform with benefits limited to those participating. She acknowledged that WTO Members need to address how to make folding plurilaterals into the WTO easier to do. The EU supports the U.S. view that the Special and Differential Treatment provisions and approach don’t make sense in 2021 though the revised policy.

Jennifer Hillman, after the disclaimer that she is not part of the Biden Administration and hence doesn’t speak for them, agreed that the early pronouncements by the Biden team showed significant areas of likely cooperation on WTO reform between the U.S. and the EU based on its revised trade policy paper. She believed that the period of time for getting collaboration started and showing early results was short and that many of the topics for collaboration would require time, hence raising concerns about the ability to actually see forward movement. During her direct comments, Ms. Hillman focused on areas other than dispute settlement. She noted that the concept of sustainable development appeared to have different meanings depending on whom one was talking to. For Europe, it seemed to focus on environment whereas for the Biden Administration there is a heavier focus on labor rights whereas for many WTO Members (developing and least developed countries), the focus would be development. She viewed it as important for the EU to realize focus on labor by U.S. in seeking and obtaining collaboration on sustainable development. She agreed on areas of cooperation on gender equality and empowerment of women and girls, on having the WTO contribute to addressing climate change, including on border taxes that are WTO consistent, on plurilaterals and the need for change to how Special and Differential Treatment is addressed, and on the need for new (e-commerce) or revised rules (industrial subsidies).

Thomas Graham, as a former Appelate Body who had left after eight years at the end of 2019 (his and a colleague’s departure reduced the number of Appellate Body Member below the number needed to hear an appeal), believed that the problems with the dispute settlement system could not be easily addressed and would take significant time to resolve in a way that would address the underlying problems. He urged greater accountability by Appellate Body members. He noted in particular the tension between the second and third sentences of DSU 3.2 (as referenced as well in 19.2) where the bar to creating rights and obligations (important to the U.S.) was neutered by actions of the Appellate Body in clarifying existing provisions (historically the focus of the EU). Mr. Graham did not see an easy resolution to this problem without changing the language itself. He also reviewed the Appellate Body’s elimination in effect of Art. 17.6(ii) of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Antidumping Agreement or ADA), a provision intended to grant discretion to administering authorities in interpreting provisions of the Agreement which were capable of more than one interpretation. Mr. Graham noted that members of the Appellate Body viewed there being either no or very few situations where the Antidumping Agreement provisions would be capable of more than one interpretation. He also raised the question of how Members would deal with past decisions made by and principles adopted by the Appellate Body. He referenced a commentary by Amb. Dennis Shea (the Trump Administration Deputy U.S. Trade Representative in Geneva) posted on the CSIS website on March 9, 2021, “No Quick Fixes for WTO Dispute Settlement Reform” and indicated the questions raised in the paper needed to be addressed. See Center for Strategic & International Studies, No Quick Fixes for WTO Dispute Settlement Reform, March 9, 2021, https://www.csis.org/analysis/no-quick-fixes-wto-dispute-settlement-reform (article includes eight questions Amb. Shea believes the EU needs to answer as it thinks about WTO Dispute Settlement reform).

Mr. Gao provided his perspective on how the types of reform issues identified in the EC revised trade policy paper would be viewed by China, among others. Mr. Gao indicated that China has been unwilling to consider reforms which it views as discriminating against China. Thus, initiatives like the EU’s to start a plurilateral on competitive neutrality (SOEs, heavy subsidization, etc.) is viewed by China as aimed at them and hence will never be supported by China. China’s response has been to assert that there should be ownership neutrality (no special rules for SOEs or for differences in economic systems). China has participated in Joint Statement Initiatives where it does not view itself as targeted including e-commerce, domestic services regulation, investment for development, SMSEs, etc. China is supportive of restoration of the Appellate Body. On S&DT, China does not agree to a change in classification of Members but has agreed to take on responsibilities that it views as consistent with its level of development.

Observations

The above review is undoubtedly incomplete and doesn’t include the discussion during the question and answer portion., but hopefully provides enough of a summary to show large areas of agreement and some of caution between the U.S. and the EU. Both the EU and the US (under the Biden Administration) are putting a lot of focus on recovery from the COVID-19 pandemic and both are interested in supporting global distribution of vaccines, therapeutics and diagnostics through COVAX, though there are short term issues in terms of supplies for national needs for both the U.S. and EU.

In general, the two U.S. panelists agreed with Ms. Weyand that there are areas where cooperation between the U.S. and the EU is possible and viewed the revised EC trade policy paper as helpful, particularly in terms of perceived movement by the EU on dispute settlement. Mr. Gao’s comments show that any reform will not likely be easy or quick because of the large differences in views of existing Members and the challenges posed by China’s economic system to global commerce since consensus decision making permits China to effectively derail multilateral solutions and it can opt not to participate in plurilaterals that it views as not in its interests.

While the U.S. and EU have each articulated the need to have unilateral response capabilities if solutions can’t be found through the WTO or bilaterally, the EU position (and likely Biden Administration position) is that cooperation should be sought between the U.S., EU and possibly others before unilateral actions are taken to permit coordination.

Much of the forward movement at the WTO on new rules is likely to be through plurilateral deals. The JSIs are generating most of the energy at the moment. India and South Africa have submitted a paper arguing that such plurilaterals area not proper under the WTO or require consensus (which doesn’t exist) to be included within the WTO. See February 20, 2021, Will India and South Africa (and others) prevent future relevance of the WTO?, https://currentthoughtsontrade.com/2021/02/20/will-india-and-south-africa-and-others-prevent-future-relevance-of-the-wto/. Ms. Weyand’s position was that the WTO will need to find ways to incorporate the plurilaterals into the WTO or action will happen outside of the WTO which cannot be beneficial to the WTO. In a post in recent days, I have argued that the U.S. should joint the JSIs that it is not a party to. See March 9, 2021, The Biden Administration should join the Joint Statement Initiatives that it is not presently party to, https://currentthoughtsontrade.com/2021/03/09/biden-administration-should-join-the-joint-statement-initiatives-that-it-is-not-presently-part-to/. The new Director-General has also put significant emphasis for obtaining forward movement in the JSIs. So despite the current importance of the JSIs, there are challenges to how much the U.S. and EU can achieve through plurilaterals within the WTO without changes to the Marrakesh Agreement Establishing the WTO, and Members will be divided on having WTO plurilaterals where benefits are limited to the parties vs. all Members (i.e., non-MFN, but open for later membership of non-participants).

On Dispute Settlement, the EU has stated that it understands the long-standing U.S. concerns that are bipartisan and reflected both in the Biden Administration and in Congress. While Ms. Weyand’s view is that the U.S. must signal that it accepts a two-tier, binding, independent dispute settlement system early for negotiations to move forward, the comments of Thomas Graham and the paper by Amb. Shea suggest that such an early commitment may be inappropriate. This would be true if the underlying problems laid out over the last years by the U.S. cannot be rectified satisfactorily under such a system — currently unknown as negotiations haven’t taken place.

Since the problems for the U.S. and others with the Appellate Body flow in part from an ineffective mechanism for Members to correct Appellate Body errors (i.e., the negotiating a clarification and/or Ministerial Conference/General Council adoption of an interpretation (Marrakesh Agreement Establishing the WTO Art. IX:2)), reform of the dispute settlement will likely exceed review of the Dispute Settlement Understanding and procedures.

Ms. Hillman has suggested and Mr. Graham has supported Ms. Hillman’s proposal for a separate process for trade remedy or trade defense cases in light of the large number of cases in the area where there has been longstanding disagreement on Appellate Body decisions and because of the failure of the Appellate Body to respect Art. 17.6(ii) of the Antidumping Agreement.

In earlier posts, I had suggested some modifications to Amb. Walker’s 2019 draft General Council Decision that (1) would interpret both DSU Art. 3.2 and 19.2 and possibly deal with the tension Mr. Graham reviewed in his comment and that have led to much of the overreach problem; (2) would address ADA Art. 17.6(ii); and (3) would deal with past erroneous decisions. See July 12, 2020, WTO Appellate Body reform – revisiting thoughts on how to address U.S. concerns, https://currentthoughtsontrade.com/2020/07/12/wtos-appellate-body-reform-revisiting-thoughts-on-how-to-address-u-s-concerns/ (relevant section copied below; modifications are in bold and underlined).

‘Overreach’

As provided in Articles 3.2 and 19.2 of the DSU, findings and recommendations of Panels and the Appellate Body and recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.   In a large number of Panel and Appellate Body reports, one or more parties and/or third parties have raised concerns about the Panel or Appellate Body adding to or diminishing the rights and obligations contrary to Articles 3.2 or 19.2 of the DSU.

To clarify situations where rights and obligations are being added to or diminished, Panels and the Appellate Body will not fill gaps in agreements, construe silence to indicate obligations or construe ambiguities in language of existing agreements to require a particular construction.  Any such actions by a Panel or by the Appellate Body is inconsistent with Articles 3.2 and 19.2 of the DSU.

Any party to an Appellate Body report that raised at the DSB meeting considering adoption of the Appellate Body report concerns about the creation of rights or obligations inconsistent with Articles 3.2 or 19.2, will have 90 days from the adoption of this General Council decision to request a review of the Appellate Body decision.  Such request will be for the limited purpose of having the Appellate Body determine whether on the specific issues raised where the party complained of creating rights or obligations the clarification of meaning provided in this General Council decision would result in a changed decision on the particular issue.  The Appellate Body will render decisions on all such requests within 90 days and will accept no additional briefing or argument from parties.  Where the report would have been different on one or more particular issues, it is sufficient for the Appellate Body to so indicate.  Where the same decision on an issue would have been made, the Appellate Body shall provide a detailed explanation.      

Panels and the Appellate Body shall interpret provisions of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (“antidumping agreement”) in accordance with Article 17.6(ii) of that Agreement.  Any party to an Appellate Body report that raised at the DSB meeting considering adoption of the Appellate Body report that Article 17.6(ii) was not applied in interpreting the antidumping agreement, will have 90 days from the adoption of this General Council decision to request a review of the Appellate Body decision.  Such a request will be for the limited purpose of having the Appellate Body determine whether a different outcome on one or more issues would have resulted had the Appellate Body applied Article 17.6(ii)  of the antidumping agreement.  The Appellate Body will render decisions on all such requests within 90 days and will accept no additional briefing or argument from parties.  Where the report would have been different on one or more particular issues, it is sufficient for the Appellate Body to so indicate.  Where the same decision on an issue would have been made, the Appellate Body shall provide a detailed explanation.       

There presumably are many other ways (and perhaps better ways) to deal with these issues, but the above suggests that solutions could be found that would support a two-tiered system. Perhaps, the EU proposal for what it needs from the U.S. early should be supplemented by an understanding that any such commitment assumes ability to address U.S. concerns meaningfully with a two-tier, binding, independent dispute settlement system.

Conclusion

Ms. Weyand’s statement was that cooperation between the U.S. and the EU was a necessary but not sufficient condition to a successful effort at WTO reform. The European Commission in its revised trade policy paper demonstrated some movement from prior positions that had made resolution of matters such as the impasse on the Appellate Body unlikely. Similarly, the Biden Administration has been indicating on a range of issues including environmental sustainability movement that makes a united front between the U.S. and EU more likely. Actions reported in the press in recent weeks show movement by both the U.S. and the EU to improve bilateral relations in the trade sphere. All are very promising signals.

But the path forward is complicated by a lack of common objectives with many third countries, including China. Hence, the correctness of the observation that U.S.-EU cooperation is necessary but not sufficient.

Programs like today’s IIEL program provide a useful opportunity for large numbers of members of the public to gain a better understanding of the possible road forward and challenges to be faced. All of the panelists (and moderator) did an excellent job. It will be interesting to see how the WTO responds in the coming months if the U.S. and EU can in fact mount a united front on reform.

WTO Director-General Okonjo-Iweala’s statement on International Women’s Day, a broader read on gender equality; U.S., EU and New Zealand actions and statements

In my post yesterday, I pulled some information from a short video put together by the WTO, UNCTAD and ITC that dealt with the issue of priorities for the three organizations in terms of recovering from the pandemic. I also reviewed some actions President Biden was taking in the United States. See March 8, 2011, March 8, 2021, International Women’s Day — statements of UN Women Executive Director,  heads of WTO, UNCTAD and International Trade Centre, and U.S. Executive Orders and Statement by President Biden, https://currentthoughtsontrade.com/2021/03/08/march-8-2021-international-womens-day-statements-of-un-women-executive-director-heads-of-wto-unctad-and-international-trade-centre-and-u-s-executive-orders-and-statement-by-president-biden/.

WTO Director-General Ngozi Okonjo-Iweala

Yesterday the WTO hosted a virtual event entitled “Women in leadership: Achieving an equal future in a COVID-19 world,” Director-General Okonjo-Iweala gave an opening statement which chronicles both the disproportionate harm women have encountered during the COVID-19 pandemic but also some of the actions some governments are taking to address the challenges facing women. See WTO, International Women’s Day: Focus on women for a stronger recovery, March 8, 2021, https://www.wto.org/english/news_e/news21_e/women_08mar21_e.htm. While the two priorities of the Director-General (DG) reviewed in yesterday’s post are also present in her statement at yesterday’s event (equitable and affordable access to vaccines, therapeutics and diagnostics; eliminating or phasing out export restraints), there is a lot more ground covered in the statement. The women and trade agenda at the WTO is relatively limited at the present time. Having a woman as Director-General can lead to changes in the organization and structure of the Secretariat — which is identified as a topic DG Okonjo-Iweala will be addressing — and can help ensure that women are at the table for all negotiations so that trade policy and negotiations include an understanding of the implications for gender equality and empowerment of women and girls. DG Okonjo-Iweala reviews the reasons women have been disproportionately affected — including being overrepresented in sectors heavily impacted by the pandemic (textile and apparel manufacturing, tourism), being heavily concentrated in the informal economy of countries with limited or no safety net if jobs are lost, for entrepreneurs, being in small businesses with limited financial resources making surviving a pandemic more challenging, shouldering heavy loads at home in terms of child care, and facing great health care risks because of the concentration in medical and essential services jobs, The text of DG Okonjo-Iweala’s statement, which ls linked to the press release is copied below. See Speeches — DG Ngozi Okonjo-Iweala, 2021 WTO International Women’s Day: “Women in Leadership: Achieving an Equal Future in a COVID-19 World”, March 8, 2021, https://www.wto.org/english/news_e/spno_e/spno2_e.htm.

“Ladies and gentlemen,

“Today is my first International Woman’s Day as the WTO Director-General. Given the particular challenges the pandemic has brought to women globally, I wish to focus my opening remarks today on what the WTO can do to help address these challenges. But I am keenly aware that achieving gender equality is also one of the top priorities for the Secretariat itself, and we will find an occasion soon to have a focused discussion on gender issues for the Secretariat.

“The COVID-19 pandemic has deepened inequalities of every kind. Between countries with money to spend on vaccines and economic relief, and those that cannot. Between workers who must risk their health every day, and those who can safely work from home. Between big firms and small businesses.

“But perhaps no divide has deepened more than that between men and women.

“In both paid and unpaid work, women bore the brunt of the pandemic’s social and economic impact.

“Globally, 5% of women lost jobs in 2020.  The employment loss of men was 3.8%. Women have also been much more likely than men to drop out of the labour market and become inactive.

“In low-income countries without the means to offer economic support during lockdowns, many women lost their only source of income. As family incomes fell, many girls stayed home when schools reopened, or went to work.

“Why has the recession caused by the pandemic had such a disproportionate impact on women?

“First, women are overrepresented in sectors that have been more negatively affected than others.

“This includes jobs requiring in-person contact, such as food service and retail — sectors that either shut down or became much riskier. Women also account for a large share of workers in services such as tourism — sectors directly affected by travel restrictions.

“Women also outnumber men in the manufacturing sectors hardest hit by the pandemic, such as textiles and apparel, where factories shut down early in the pandemic in response to plummeting export demand. In Bangladesh, for example, female employees represent 80 per cent of the workforce in ready-made garment production. Industry orders declined by 45.8 per cent over the first quarter of 2020 — by 81 per cent in April 2020 alone.

Second, more women work in informal sectors than men. Women make up 58% of employment in informal sectors, and the numbers are higher in developing and least-developed economies. In Africa, for example, almost 90% of employed women work in the informal sector.​ These women workers are hurt the most because they are likely to have lost their only source of income and been left with no social and legal protection. 

“Third, many women entrepreneurs own or manage small businesses that already struggle with limited financial resources and borrowing capacity. The pandemic worsened these pressures.

“And within families, women continue to shoulder a heavier burden than men. Temporary school closures made fathers step up a little, but mothers stepped up much more. Working mothers changed work schedules, reduced hours or took unpaid leave far more frequently than working fathers. In Germany, 6% of fathers but 62% of mothers indicate they have taken on the primary responsibility for their children during school closures.

“Finally, women face greater health risks as they work more in areas such as health and social care, sales of food and other necessary goods. In many countries, women comprise over 75% of the healthcare workforce. In certain countries (Italy, Spain, and the US), a higher proportion of women healthcare workers (69%, 75.5%, and 73% respectively) were found infected with COVID-19: although work is still ongoing to understand the reasons for this, one possible reason is that personal protection equipment has been designed to fit for men and even the smallest size is too big for some women.

“Even before COVID-19, progress towards gender parity had been too slow, too uneven. Now, unless we act quickly, the pandemic’s disproportionate impact on women could last for decades. This would be a moral failure — and an economic disaster.

“The biggest thing the WTO can do right now is to work with Members to keep trade open.

“As the economic data shows, trade has proven crucial in the global fight against the pandemic.

“While too many export restrictions remain in place, trade helped improve access to key medical products over the past year. In the first half of 2020, while global trade contracted by 14% compared to the year before, total imports of personal protective equipment and other COVID-related products rose by 29%. The value of trade in textile face masks grew six-fold. PPE trade grew by 50%. Trade thus enhanced supply resilience, particularly for those countries without manufacturing capacity.

“The pandemic has also highlighted how the temporary movement of healthcare workers, of whom many are women, has particularly helped the most affected countries to deal with the crisis. Open trade will continue to be key to building faster and more inclusive growth.

“Second, WTO Members must minimize or remove existing export restrictions that are impeding access to essential medical supplies and disrupting supply chains. Transparency on any export trade restrictions should also be improved through prompt notifications.

“In all these efforts, our priority should be to contribute to making vaccines, therapeutics and diagnostics available and affordable in all countries. Until we have successfully tackled health challenges for everyone, we cannot tackle economic ones.

“Third, trade can be a source of more and better jobs, and increased purchasing power for women. Overall, countries that are more open to trade, as measured by the ratio of trade to gross domestic product, have higher levels of gender equality.

“For one, women are more likely to be in formal jobs if they work in trade-integrated sectors with higher levels of exports, thereby giving them opportunities for benefits, training, and job security. A recent World Bank survey shows that, for women, the probability of being informal declines from 20% in sectors with low levels of exports to 13% in sectors with high levels of exports. 

“Digital technologies can also help women overcome gender-based barriers to trade, reach broader markets, and weather the impact of crises better. Women facemasks producers in Kenya, for example, found ways to develop and even expand their businesses during lockdowns using growing e-commerce opportunities. Rwandan women coffee producers were able to export their products directly to China. Let’s close the existing gender digital divide and help all women benefit from the opportunities created by digital technologies.

“Finally, all these efforts must be supported by targeted support measures for women.

“Women could be left behind in the recovery unless adequate measures are put in place to address the uneven impact of the pandemic on them. Let me give you one example of how targeted intervention can make a difference: in Zambia, the Enhanced Integrated Framework (EIF) and the International Trade Centre (ITC) helped women-owned businesses selling textiles, leather, and honey to attend trade fairs and other B2B activities. The result: they were able to break into 10 new international markets, and generate hundreds of thousands of dollars worth of new sales. They also expanded their supplier networks, and many of those new suppliers were also run by women.

“Governments need to prioritize women in the labour force and in the home through financial, legal, and educational measures. Fiscal support for women will be particularly crucial. Yet currently less than 40 per cent of all measures taken globally for the recovery are gender sensitive, with only 7 per cent containing measures supporting women’s economic security.

“This is a crude reminder for all of us that women must be at all decision-making tables equally as men. As Dame Graça Machel once said, “…socio-economic transformation will only be realized once we aggressively address gender-specific challenges, prioritize gender equality and women’s participation, and firmly entrench women in leadership positions at all levels in society.”

“The cost of gender inequality is enormous. A few years ago McKinsey estimated that if women played a fully equal role to men in the labour market, global economic output could increase by as much as $28 trillion per year. To put it in perspective, this pandemic reduced global output last year by between $3 and 4 trillion.

“The COVID-19 pandemic is setting women back in all domains of society.

“At the same time, it has reminded everyone of the enormous value of care and other kinds of work traditionally associated with women. And it has highlighted the power and effectiveness of women’s leadership. Although no analytical study has been conducted yet, anecdotal examples show that economies led by woman leaders (e.g. New Zealand, Denmark, Chinese Taipei, Iceland, Finland, and Norway) have outperformed their peers in terms of management of this pandemic.

“We cannot expect to make good policy for all members of society if half of the population is not properly and equally represented at the table.

“Gender equality is a fundamental human rights issue and also an economic empowerment issue. We should all work harder in our respective roles to achieve complete gender equality.

“I wish you all a happy International Women’s Day!”

Additional actions by President Biden

In yesterday’s post, I also reviewed actions President Biden was taking in the form of two Executive Orders (one Executive Order on Establishment of the White House Gender Policy Council, a second Executive Order on Guaranteeing an Educational Environment Free from Discrimination on the Basis of Sex, Including Sexual Orientation or Gender Identity). But President Biden on March 8th reviewed additional actions he has taken including nominating two women to hold command positions in the U.S. Military and putting forward to Congress the Violence Against Women Reauthorization Act of 2021. See Statement by President Biden on the Introduction of the Violence Against Women Reauthorization Act of 2021 and Remarks by President Biden on International Women’s Day (“On Friday, I submitted to the Senate for confirmation my first slate of nominations for four-star command positions in our Armed Forces — among them, two outstanding and eminently qualified warriors and patriots.  General Jacqueline Van Ovost in the United States Air Force is currently the only female four-star officer serving in our military.  I nominated her as Commander of the United States Transportation Command.  And when confirmed, the Lieutenant General Laura Richardson, of the United States Army, will be promoted in rank and join General Van Ovost as the only four-star — as another four-star general.  I nominated her as Commander in the United States Southern Command.  And, when confirmed, they will become the second and third women in the history of the United States Armed Forces to lead combatant commands.”). The Biden Administration also had a press briefing with the two co-chairs of the Gender Policy Council. See Press Briefing by Press Secretary Jen Psaki, Co-Chair of the Gender Policy Council and Chief of Staff to the First Lady Julissa Reynoso, and Co-Chair and Executive Director of the Gender Policy Council Jennifer Klein, March 8, 2021. And Vice President Kamala Harris reported participated in a discussion with an EU Parliamentary Committee. See eudebates.tv, We are all in this together! Jacinda Ardern on International Women’s Day, March 8, 2021, https://www.eudebates.tv/debates/world-debates/australia/we-are-all-in-this-together-jacinda-ardern-on-international-womens-day/ (“.During the plenary session of the European Parliament in Brussels, Jacinda Ardern, Prime Minister of New Zealand joined MEPs to celebrate the International Women’s Day during a debate. Prime Minister Jacinda was one of a number of high-profile guests, including US Vice President Kamala Harris, to address the European Union Parliament for International Women’s Day.”)..

So the Biden Administration has been taking actions to bring women into positions of power in a unprecedented manner in the United States and to embark on reviews to ensure problems to achieving gender equality are identified and addressed.

European Commission President Ursula von der Leyen

The EU has had relatively strong programs promoting gender equality over time. Like the United States, the EU is looking to do more. European Commission President Ursula von der Leyen made a statement yesterday at the EP FEMM Interparliamentary Committee meeting reviewing the important contributions of women to the development of COVID-19 vaccines and the actions the EU will be taking to improve gender equality. Like President Biden’s cabinet, EC President von der Leyen has much greater balance in the Commission composition in terms gender representation. See Opening speech by President von der Leyen at the EP FEMM Interparliamentary Committee meeting, on the occasion of the International Women’s Day 2021, March 8, 2021, https://ec.europa.eu/commission/presscorner/detail/en/SPEECH_21_1017. Her speech is copied below.

“Thank you very much Evelyn Regner,

“Presidents and Honourable Members,

“It is an honour to be with you today, in the company of so many amazing women. And allow me to begin by mentioning three women who are not with us today. Doctor Özlem Türeci. Professor Sarah Gilbert. Doctor Kizzmekia Corbett. Some of you may have never heard their names before. But we owe them a lot. They are three scientists from Germany, the UK and the U.S. And these three extraordinary women lead the teams that developed the first three vaccines against coronavirus. BioNTech, Moderna and AstraZeneca.

“And I am sure that they, like many of us, have fought against all sorts of stereotypes. But this is how women respond to stereotypes: By going their way, showing leadership and excelling in their field. And today the whole world can see that we are all better off when women get the opportunities they deserve. Of course, women are made for science. Of course, women are fit to lead. Of course, career and motherhood can go together. It is obvious, but unfortunately it still needs to be said.

“This year’s International Women’s Day is for women like these three scientists. This Women’s Day is for women on the front-line, and for women in the back-office. It is for the health workers, who have been our guardian angels, and it is for our sales assistants, who have kept our supermarkets open. And indeed, let us never forget that almost 80% of them are women.

“Women’s Day is also for all the mothers who have taken care of their children during the lockdowns, while also working from home. But this Women’s Day is also for the women who lost their job during the crisis. And Women’s Day is for those who no longer want to settle for discriminations, insecurity and unfairness. As a female leader, I would like 2021 to bring good news to all of them, to all European women. And this is what we are working on: Putting women at the centre of all our policies.

“And let me start with the basics. Later this year we will propose new legislation to fight violence against women. This has become even more urgent because of the lockdowns. Living free from fear and violence is a basic human right. And we must ensure adequate protection for all women, in all European countries, online and offline, and especially at home.

“Second, women must be at the centre of the recovery. This is a clear requirement for all national recovery plans. NextGenerationEU will finance good jobs for women and men alike. It will invest in quality education for girls and women, including scientific education. NextGenerationEU will be for all Europeans, women and men.

“Third, today indeed we are presenting our new Action Plan to implement the European Pillar of Social Rights. We have set ambitious targets on jobs, skills, and poverty reduction. These are clear and measurable goals to drive our work.

“And let me take one of them: By 2030, at least 78% of European adults should be employed. And this can only be achieved by having more women in the labour market. But to do this we need to make progress on work-life balance. Ensuring parental leave for mothers and fathers. Investing in childcare and good schools. And indeed creating a child guarantee, so that all parents, from all social backgrounds, can send their kids to childcare and school. And this is what empowerment means. Freedom to be a mother and to have a career, for all women.

“And this adds up to the fourth point, today we are also proposing a Directive for pay transparency. It builds on a very simple idea: Equal work deserves equal pay. And for equal pay, you need transparency. Women must know whether their employers treat them fairly. And when this is not the case, they must have the power to fight back and get what they deserve.

“And finally, women should always be able to reach for the top, including in private companies. I fought for this when I was a Minister in Germany. And I will not stop pushing for gender quotas on boards until we get a fair system for all European countries. We simply cannot exclude half of our talents from leadership positions.

“Having women in leadership position should become the norm, not the exception. And slowly but steadily, Europe is changing. Five EU governments are now led by women. For the first time, an EU country, Estonia, is led by two women, as President and Prime Minister. And you, President Sakellaropoulou, are the first woman to be elected as Greek President.

“For the first time in our history, not only the European Commission is led by a woman, but we have also achieved gender-balance in the College of Commissioners. As you know, this is something I promised on my nomination. I asked every European country to present a man and a woman as candidates for each post. It was not always easy. But we made it. And it shows that everything can change, with tireless perseverance.

“All of this matters. It matters to the quality of our decision-making. And it matters to our daughters. It tells them that they can reach for the top. It tells them that hard work pays off. That they will be judged on their ideas, their dedication and their talent, not for their chromosomes. A gender-balanced Europe is a better Europe. Not just for women, but for all of us.

“And in this spirit: Long live Europe, and happy Women’s Day!”

New Zealand Prime Minister Jacinda Arden

New Zealand’s Prime Minister Jacinda Arden also spoke to the European Parliament yesterday. Her speech can be found here. eudebates.tv, We are all in this together! Jacinda Ardern on International Women’s Day, March 8, 2021, https://www.eudebates.tv/debates/world-debates/australia/we-are-all-in-this-together-jacinda-ardern-on-international-womens-day/. New Zealand has done a lot to promote gender equality and has leadership in government that is roughly in number equal between women and men. But challenges remain as the Prime Minister notes in her speech including women being “overrepresented in job loss and low paid work and domestic violence statistics.” The Prime Minister’s speech is copied below (headers are from the webpage).

“Jacinda Ardern European Parliament speech on International Women’s Day 

“I’m honoured to see this kind invitation to speak with you and I bring warm greetings from New Zealand. President Sassoli, thank you for convening this session and for the focus on women’s empowerment and leadership during the covid crisis. To say this is a challenging time would be, of course, a monumental understatement. The world is reeling from the effects of the covid-19 pandemic.

“It has had far reaching consequences that have affected every one of us. This is a critical time for us as leaders and representatives to come together, even if it is by video in these constrained times. Covid-19 highlights how truly interdependent we all are, how reliant we are on cooperation, communication and compassion to successfully combat the virus.

“Jacinda Ardern puts people at the centre

“It highlights how important it is that we work together for a sustainable recovery that delivers for our economies and our planet. But it also puts people at the centre of our decision making. In New Zealand our approach in battling covid-19 has been one of inclusivity. The idea that everyone needs to do their bit to protect one another, especially our most vulnerable.

“I want to talk about our population as the team of five million, and we may be a small team, but one that nonetheless has proven the power and importance of the collective. And now that’s exactly what we need from the world. It’s a haunting legacy if the virus drags on around the globe. It has become clear no country is safe until every country is safe. As we move to a phase of vaccination we are not a team of five million, but we are a team of seven point eight billion

“The success of individual countries or regions means little unless we are all successful. In New Zealand‘s indigenous language Te Reo Maori, we say “we are all in this together”. But some have felt the effects of covid-19 even more acutely than others. Covid-19 has ravaged our health systems, our economies, our livelihoods. But it is also exacerbated structural inequalities that disproportionately impact women and girls.

“Women are at the forefront

“Women are at the forefront of fighting the covid crisis. Amongst the doctors, nurses, scientists, communicators, caregivers and frontline and essential workers who face the devastations and challenges of this virus every day. Along with being directly affected by the virus itself and its immediate impacts on our livelihoods, we’re also the subjects of intensified domestic violence.

“Now this is being reported as the shadow pandemic in all corners of the world. Not only by fully and meaningfully including women and girls in leadership and decision making at all levels can we ensure that our responses to the pandemic meet the needs of everyone. As prime minister of a small country on the far side of the world, I’m proud of what our team of five million in New Zealand has been able to achieve over the last year.

“We have a proud history of championing gender rights since we became the first country in the world to give all women the right to vote in 1893. I’m part of the most diverse and inclusive parliament New Zealanders have ever elected, with women making up forty eight per cent of our parliament and fifty five per cent of my party in government.

“Women hold top positions

“Women also hold the post of Governor-General, Prime Minister, Leader of the Opposition and Chief Justice, and increasingly holding senior roles in our public service and business sector. And now, for the first time and long overdue, I might add, New Zealand‘s Minister of Foreign Affairs is a woman. She is a skilled, values driven indigenous woman with a contemporary worldview.

“And yet for all of that, we have so much more to do because it doesn’t matter how many women are in leadership, so long as we have women overrepresented in job loss and low paid work and domestic violence statistics. In my mind, that is the true measure of whether we have made progress and whether we have equality.

“As we look towards the year ahead we all know it will be tough. There will be big challenges and demands made of all of us as leaders. We will be tested. We must all do more to support women lead business, including small enterprises, to be part of the covid-19 economic recovery so they can more readily experience the benefits of trade.

“The European Union and New Zealand. We are Like-Minded Partners with so many values and interests in common, we both desire the stability and freedom afforded us all by global rules and institutions, free and open markets and a world where human rights are valued and prioritised.

“As we all turn towards creating a sustainable global economic recovery, my message to you is simple. We need to stick together because we are all in this together. I wish your Parliament and all our people the very best for the challenges that lie ahead. Stay safe. Stay well.”

Conclusion

Gender equality is an issue that needs a permanent place on agendas of organizations and governments to ensure progress is made for half the world’s people. Progress has been too slow in too much of the world and discrimination or unequal treatment can be found in various forms in nearly all countries. It is unimaginable that the world has not progressed more. We can and must do better.

Biden Administration should join the Joint Statement Initiatives that it is not presently party to

President Biden has made it clear that his Administration will work within multilateral organizations to the extent possible to move the U.S. agenda forward. During the Trump Administration, the U.S. participated actively in the World Trade Organization but was active in only one of the Joint Statement Initiatives that were initiated at the end of the Buenos Aires Ministerial Conference in late 2017.

Thus, the United States is an active participant in the ongoing negotiations following the Joint Statement on Electronic Commerce (WT/MIN(17)/60, 13 December 2017), but is not a party to the other Joint Statement Initiatives. See Joint Ministerial Statement on Services Domestic Regulation (WT/MIN(17)/61, 13 December 2017); Joint Ministerial Statement on Investment Facilitation for Development (WT/MIN(17)/59, 13 December 2017); Joint Ministerial Statement, Declaration on the Establishment of a WTO Informal Work Programme for MSMEs (WT/MIN(17)/58, 13 December 2017); Joint Declaration on Trade and Women’s Economic Empowerment on the Occasion of the WTO Ministerial Conference in Buenos Aires in December 2017.

While India and South Africa have challenged the legitimacy of the Joint Statement Initiatives (JSIs), a great deal of the energy in the WTO in the last several years has been put into the JSIs. See, e.g., February 20, 2021, Will India and South Africa (and others) prevent future relevance of the WTO?, https://currentthoughtsontrade.com/2021/02/20/will-india-and-south-africa-and-others-prevent-future-relevance-of-the-wto/; WTO, Coordinators of joint initiatives cite substantial progress in discussions, 18 December 2020, https://www.wto.org/english/news_e/news20_e/jsec_18dec20_e.htm. The WTO press release is copied below.

“The coordinators of the joint initiatives on e-commerce, investment facilitation, services domestic regulation and micro, small and medium-sized enterprises (MSMEs) said on 18 December that substantial progress has been achieved in their respective discussions and that they are on track to deliver concrete results or additional progress at the WTO’s 12th Ministerial Conference (MC12) scheduled for next year.

“In their communication, the coordinators noted that they have delivered summary statements to WTO members outlining how far the four initiatives have advanced since they were launched three years ago, where they stand today, and what their next steps in the discussions will be.

“’What these statements clearly show is the substantial progress [of the initiatives] in a short period of time, that they are on track to delivering concrete results or progress at MC12, and that they are contributing to building a more responsive, relevant and modern WTO — which will be critical to restoring global trade and economic growth in the wake of the COVID-19 crisis.’

“’These initiatives have grown into an increasingly important part of the agenda of the WTO, with an expanding number of participants from both the developed and developing worlds that account for a significant part of the WTO’s membership, and based on the principles of openness, transparency and inclusiveness,’ the coordinators added.

“The new joint initiatives were launched at the WTO’s 11th Ministerial Conference in Buenos Aires in December 2017 with the aim of commencing negotiations or discussions on issues of increasing relevance to the world trading system.

“The joint initiative coordinators are Ambassador José Luis Cancela Gómez (Uruguay) for the Informal Working Group on MSMEs; Ambassadors George Mina (Australia), Yamazaki Kazuyuki (Japan) and Tan Hung Seng (Singapore) for the Joint Statement Initiative on E-Commerce; Deputy Permanent Representative Jaime Coghi Arias (Costa Rica) for the Joint Statement Initiative on Services Domestic Regulation; and Ambassador-designate Mathias Francke (Chile) for the Structured Discussions on Investment Facilitation for Development.

“The coordinators noted that the consolidated negotiating text on e-commerce will provide a foundation for intensified negotiations in 2021. They highlighted that the negotiations on services domestic regulation are at a ‘mature stage’, with a genuine potential for an outcome by MC12.

“The coordinators also said that substantive provisions of an investment facilitation agreement are being negotiated by the participating members in this initiative. In addition, they noted the recent announcement by the Informal Working Group on MSMEs of a package of declarations and recommendations to help small business trade internationally.

“The coordinators underscored that the shared and ultimate goal of these initiatives is to strengthen and reinforce the multilateral trading system, that they are open to all WTO members, and that they seek the participation of as many members as possible.

“The coordinators stated: ‘The initiatives on e-commerce, investment facilitation, services domestic regulation, and MSMEs clearly demonstrate that the WTO can respond to new economic and technological challenges in a flexible, pragmatic, and timely way. These initiatives — and their innovative approach to cooperation and negotiation — can provide a valuable illustration of WTO reform in action.’”

While the Joint Declaration Trade and Women’s Economic Empowerment on the Occasion of the WTO Ministerial Conference in Buenos Aires in December 2017 is not treated as a JSI, it does have many Members supporting the Declaration and engaging in the informal work programme.

Some of the other countries participating in all of the JSIs and Joint Declaration

While the number of WTO Members participating in the JSIs and supporting the Joint Declaration vary, the following is a partial list of Members who are signatories to all of the JSIs and the Joint Declaration. Other than the Electronic Commerce initiative, the U.S. is presently not a signatory or participant in any of the other JSIs or Joint Declaration.

Argentina, Australia, Brazil, Canada, Chile, China, Colombia, European Union, Japan, Korea, Mexico, New Zealand, Russian Federation, Switzerland are participants in all of the JSIs and supportive of the Joint Declaration. Dozens of other Members are participating in some or many of the JSI’s that the U.S. is not presently supporting or active in.

Conclusion

While the United States has a large agenda of issues it wishes to address at the WTO (including trade and the environment, WTO reform, industrial subsidies), it makes no sense that the United States would not actively participate in work programs where most of the major economies are active and where new rules will be relevant to areas of significance for the United States as well as for trading partners. While the work program on women and trade is in an informal working group, President Biden has made empowerment of women an important priority for his Administration as a range of actions during International Women’s Day made clear. See, e.g., March 8, 2011, March 8, 2021, International Women’s Day — statements of UN Women Executive Director,  heads of WTO, UNCTAD and International Trade Centre, and U.S. Executive Orders and Statement by President Biden, https://currentthoughtsontrade.com/2021/03/08/march-8-2021-international-womens-day-statements-of-un-women-executive-director-heads-of-wto-unctad-and-international-trade-centre-and-u-s-executive-orders-and-statement-by-president-biden/. Similarly, MSMEs are an important part of the U.S. economy and a major driver of economic growth. The U.S. has a very strong services sector which has an interest in domestic regulatory issues both in the U.S. and as addressed overseas. Finally, the U.S. is both a major investor in foreign countries and a recipient of large amounts of foreign investment and has a significant interest in helping the global community address issues involved in investment in developing and least developed countries on a more predictable basis.

Hopefully, the Biden Administration when its USTR nominee is confirmed in the coming days, will opt to engage in all of the JSIs. It is time.

March 8, 2021, International Women’s Day — statements of UN Women Executive Director, heads of WTO, UNCTAD and International Trade Centre, and U.S. Executive Orders and Statement by President Biden

Today is International Women’s Day. With the pandemic still occupying center stage in global affairs, the UN effort on its Sustainable Development Goal 5 to “achieve gender equality and empower all women and girls” is in trouble. Women have been disproportionately adversely affected by the pandemic, tens millions leaving the workforce to take care of children, tens of millions losing jobs and having no safety net. Various reports have reviewed the disparities and the loss of progress towards achieving gender equality and empowering all women and girls. See, e.g., UN Women, From Insights To Action, Gender Equality in the Wake of COVID-19 (September 2020); (“The pandemic has widened gender and economic inequalities.” “COVID-19 is exposing vulnerabilities in social, political and economic systems. It is forcing a shift in priorities and funding across public and private sectors, with far-reaching effects on the well-being of women and girls. Action must be taken now to stop this backsliding.”); UN Women, SPOTLIGHT ON GENDER, COVID-19 AND THE SDGS, WILL THE PANDEMIC DERAIL HARD-WON PROGRESS ON GENDER EQUALITY?, https://www.unwomen.org/-/media/headquarters/attachments/sections/library/publications/2020/spotlight-on-gender-covid-19-and-the-sdgs-en.pdf?la=en&vs=5013.

It is against this backdrop that statements and actions today on the importance of Women to the achievement of sustainable development goals should be seen. Below are materials from the UN Women’s Executive Director, the heads of the three Geneva organizations with a trade mission or function that are headed by women, and the announced actions today by President Biden in the United States.

UN Women Executive Director Statement

The following statement was made today by the UN Women Executive Director. See International Women’s Day Statement by Phumzile Mlambo-Ngcuka, UN Women Executive Director, on International Women’s Day 2021, Change up the pace: women at the table, March 8, 2021, https://www.unwomen.org/en/news/stories/2021/3/statement-ed-phumzile-international-womens-day-2021. The statement is copied below in its entirety.

“International Women’s Day this year comes at a difficult time for the world and for gender equality, but at a perfect moment to fight for transformative action and to salute women and young people for their relentless drive for gender equality and human rights. Our focus is on women’s leadership and on ramping up representation in all the areas where decisions are made – currently mainly by men – about the issues that affect women’s lives. The universal and catastrophic lack of representation of women’s interests has gone on too long.

“As we address the extraordinary hardship that COVID-19 has brought to millions of women and girls and their communities, we also look ahead to the solid opportunities of the Generation Equality Forum and Action Coalitions to bring change.

“During the pandemic, we have seen increased violence against women and girls and lost learning for girls as school drop-out rates, care responsibilities and child marriages rise. We are seeing tens of millions more women plunge into extreme poverty, as they lose their jobs at a higher rate than men, and pay the price for a lack of digital access and skills. These and many other problems cannot be left to men alone to solve. Yet, while there are notable exceptions, in most countries there is simply not the critical mass of women in decision-making and leadership positions to ensure that these issues are tabled and dealt with effectively and this has affected the pace of change for women overall.

“There are breakthroughs to celebrate, where women have taken the helm of organizations such as the World Trade Organization, the International Monetary Fund and the European Central Bank and we look forward to more such appointments that help to change the picture of what a leader looks like. Yet this is not the norm. In2020, as a global average, women were 4.4 per cent of CEOs, occupied just 16.9 per cent of board seats, made up only 25 per cent of national parliamentarians, and just 13 per cent of peace negotiators. Only 22 countries currently have a woman as Head of State or Government and 119 have never experienced this – something that has important consequences for the aspirations of girls growing up. On the current trajectory, we won’t see gender parity in the highest office before 2150.

“This can and must change. What is needed is the political will to actively and intentionally support women’s representation. Leaders can set and meet parity targets, including through appointments for all executive positions at all levels of government, as has occurred in the few countries with gender equal cabinets. Special measures can work; where countries have put in place and enforced quotas, they have made real progress on women’s leadership, as have those that have policies to address representation. Where these measures do not exist, progress is slower or even nonexistent and easily reversed.

“No country prospers without the engagement of women. We need women’s representation that reflects all women and girls in all their diversity and abilities, and across all cultural, social, economic and political situations. This is the only way we will get real societal change that incorporates women in decision-making as equals and benefits us all.

‘This is the vision of the 2030 Agenda and the Sustainable Development Goals and the vision of the Beijing Declaration and Platform for Action. It is the vision of civil society and multitudes of young people who are already leading the way and of all those who will join us in the Generation Equality Action Coalitions. We need bold decisive action across the world to bring women into the heart of the decision-making spaces in large numbers and as full partners, so that we can make immediate progress on a greener, equitable and inclusive world.”

Video of Director-General Ngozi Okonjo-Iweala of the WTO, Acting Secretary-General Isabelle Durant of UNCTAD, and Executive Director Pamela Coke-Hamilton of the International Trade Centre

For International Women’s Day, the three heads of multilateral organizations in Geneva involved in trade put out a video entitled, International Women’s Day — Leading global trade: Three women, three organizations. The note accompanying the video states “For the first time, all three major global trade organizations have women leaders: Ngozi Okonjo-Iweala at the WTO, Isabelle Durant at UNCTAD and Pamela Coke-Hamilton at ITC. On International Women’s Day, they talk about the importance of looking at trade through a gender lens, and how trade can help tackle the challenges related to the COVID-19 pandemic.” https://www.wto.org/english/news_e/news_e.htm.

Top priorities to boost recovery outlined by the three leaders include the following. For Director-General Okonjo-Iweala, her first priority to boost economic recovery, is the health aspect. “It is absolutely a top priority for me that we should look at how to make equitable and affordable access to vaccines, therapeutics and diagnostics happen. It is unconscionable that any countries or peoples should be waiting for any of these medical products. And we know that until we tackle the health challenges, we will not be able to really get a handle on the economic challenges and return to a sustainable growth path that would spell recovery from the pandemic. So that’s a really important priority. Second is what can trade do to boost the economic recovery? How can we liberalize trade in certain sectors to make sure that supply chains stay open and work and that countries can produce more and sell more? So what can trade contribute to that? It’s a priority for me that export restrictions and prohibitions that have been put by countries during this time of the pandemic be dropped or minimized or phased out very quickly so that we can have a freer flow of goods and intermediate inputs. So those are two top priorities that I think we need to focus on to boost economic recovery.”

For Acting Secretary-General Durant, her first priority is “to ensure that our institutions contribute to making trade a real tool for recovery, especially for those countries, groups and sectors that have paid a high price due to the pandemic. My priority is that everything we provide them in terms of analysis, data, technical and intergovernmental support helps them steer their recovery towards more inclusive and greener sectors and strategies. Climate change is indeed the greatest threat to current and future generations. Countries need urgently to start planning and implementing actions to adapt their production and trade to the ruthless effects of climate change: what does this imply for better production methods; new comparative advantages; investments; diversification of their economies; and regional integration and value chains? I have the same concern for fairness in the digital revolution. How can developing countries derive the greatest benefit for their development, and become players in it, when digital technology has become the driving force of the economy? COVID has shown the importance of digital infrastructure, policies and skills. More than ever, we need the cooperation, expertise and experience of all to build the road to recovery, because we all know that countries we are far from being equal when it comes to these issues.” (English translation from French as provided in the video).

For Executive Director Pamela Coke-Hamilton, her first priorities are “empowerment and equality — empowerment by building resiliency for MSMEs through partnership; empowerment for recovery by moving towards greener trade. ITC is starting a new initiative to support MSMEs and green trade, helping MSMEs adopt more sustainable practices, pursue opportunities in the circular economy and participate in greener supply chains. Empowerment through digital inclusion by promoting greater integration of MSMEs in digital economies and facilitate digital access for all. Empowerment of women and youths. A dedicated program at ITC will lead the way to women’s economic empowerment, and we will continue to work with governments to build an eco-system of new and innovative jobs for youths. And secondly, equality. Ultimately we want to make sure that no one is left behind as we seek paths for recovery, and build resilience against future shocks. COVID-19 has loaid bare the depths of inequality still prevailing from the global economic system. We must choose to challenge the status quo, and as women we will.”

Action by President Biden

President Biden provided a statement on International Women’s Day and issued two Executive Orders. See Statement by President Biden on International Women’s Day, March 8, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/08/statement-by-president-biden-on-international-womens-day/; Executive Order on Establishment of the White House Gender Policy Council, March 8, 2021, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/03/08/executive-order-on-establishment-of-the-white-house-gender-policy-council/; Executive Order on Guaranteeing an Educational Environment Free from Discrimination on the Basis of Sex, Including Sexual Orientation or Gender Identity, March 8, 2021, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/03/08/executive-order-on-guaranteeing-an-educational-environment-free-from-discrimination-on-the-basis-of-sex-including-sexual-orientation-or-gender-identity/; Fact Sheet: President Biden to Sign Executive Orders Establishing the White House Gender Policy Council and Ensuring Education Free from Sexual Violence, March 8, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/08/fact-sheet-president-biden-to-sign-executive-orders-establishing-the-white-house-gender-policy-council-and-ensuring-education-free-from-sexual-violence/. The President’s statement is copied below as is the fact sheet on the two Executive Orders.

“Women’s history is American history — and world history. On International Women’s Day, we celebrate the achievements, contributions, and progress of women and girls in the United States and around the globe.
 
“My Administration is committed to honoring women by investing in their opportunity, security, and wellbeing. I was proud to issue an Executive Order today establishing the White House Gender Policy Council, to ensure that every domestic and foreign policy we pursue rests on a foundation of dignity and equity for women. My Administration is also committed to ensuring that women are represented equally at all levels of the federal government. That starts with Vice President Harris, who broke through a barrier that stood for more than two centuries. And it includes a record number of diverse women whom I’ve nominated to serve in Cabinet-level roles and appointed to senior-level positions.
 
“In our nation, as in all nations, women have fought for justice, shattered barriers, built and sustained economies, carried communities through times of crisis, and served with dignity and resolve. Too often, they have done so while being denied the freedom, full participation, and equal opportunity all women are due. Their contributions have been downplayed. Their stories have been neglected. That is why International Women’s Day is also a time for us to recommit ourselves to the cause of equity and equality for women the world over, and to shine a light on the systemic obstacles that fuel gender disparities and undermine women’s potential.
 
“Despite persistent obstacles, women are leading every day. Over the past year, women have played a critical, often outsized role in responding to the global coronavirus pandemic. They are our vaccine researchers and public health officials. They are our doctors and nurses. They are our essential workers — so many of whom are women of color — in fire stations and nursing homes, on farms and in grocery stores, in schools and in shelters.
 
“Around the world, we are seeing decades of women’s economic gains erased by this pandemic. It’s forcing millions more girls out of school, which could impact economic growth for decades to come. Incidents of violence against women in their homes and communities have spiked. And, as is so often the case, COVID-19 is hitting the poorest and most marginalized women the hardest. These global trends damage all of us, because we know that governments, economies, and communities are stronger when they include the full participation of women — no country can recover from this pandemic if it leaves half of its population behind.
 
“Elevating the status of women and girls globally is the right thing to do — it is a matter of justice, fairness, and decency, and it will lead to a better, more secure, and more prosperous world for us all.  On International Women’s Day, let us recommit to the principle that our nation, and the world, is at its best when the possibilities for all of our women and girls are limitless.”

Fact Sheet

Biden-Harris Administration establishes a government-wide focus on uplifting the rights of women and girls in the United States and around the world

“The full participation of all people – including women and girls – across all aspects of our society is essential to the economic well-being, health, and security of our nation and of the world. This is a matter of human rights, justice and fairness. It is also critically important to reducing poverty and promoting economic growth, increasing access to education, improving health outcomes, advancing political stability, and fostering democracy.

“Today, President Biden will sign two Executive Orders. The first establishes the White House Gender Policy Council to ensure that the Biden-Harris Administration advances gender equity and equal rights and opportunity for women and girls. The second directs the Department of Education (ED) to review all of its existing regulations, orders, guidance, and policies for consistency with the Administration’s policy to guarantee education free from sexual violence.

“A year into COVID-19, women are still contending with the public health crisis, an ensuing economic crisis, and on top of those challenges, a caregiving crisis. The pandemic has exacerbated barriers that have held back women, especially women of color, forcing many to leave the workforce, manage virtual schooling, and absorb additional caregiving responsibilities. Many women are also on the frontlines of the response to COVID-19 – as essential workers keeping our economy, communities and families going. As the country continues to grapple with the pandemic and reckons with the scourge of systemic racism, President Biden knows that we need a government-wide focus on uplifting the rights of women and girls in the United States and around the world, restoring America as a champion for gender equity and equality.

“Today’s actions will:

“Establish the Gender Policy Council. The first Executive Order formally establishes the Gender Policy Council within the Executive Office of the President, with a role in both domestic and foreign policy development. The Council will work in coordination with the existing policy councils to advance gender equity and equality, including by:

“Combatting systemic bias and discrimination, including sexual harassment;

“Increasing economic security and opportunity by addressing the structural barriers to women’s participation in the labor force, decreasing wage and wealth gaps, and addressing the caregiving needs of American families and supporting care workers, predominantly low-paid women of color;

“Ensuring access to comprehensive health care and preventing and responding to gender-based violence;

“Promoting equity and opportunity in education and leadership; and

“Advancing gender equality globally through diplomacy, development, trade, and defense, and by recognizing the needs and roles of women and girls in conflict prevention, peacebuilding, democratic rights-respecting governance, global health and humanitarian crises and development assistance.

“The White House Gender Policy Council will be an essential part of the Biden-Harris Administration’s plan to ensure we build a more equal and just society – by aggressively protecting the rights and unique needs of those who experience multiple and intersecting forms of discrimination, including individuals who are Black, Latina, Native, Asian American and Pacific Islander, people with disabilities, and LGBTQI+.

“The Executive Order requires the Co-Chairs of the Council to submit to the President a Government-wide strategy to address gender in policies, programs and budgets, and an annual report to measure progress on implementing the strategy. To prevent and respond to gender-based violence, wherever it occurs, there will be a Special Assistant to the President and Senior Advisor on Gender-Based Violence on the Council staff. The Executive Order also requires engagement with non-profit and community-based organizations, state and local government officials, Tribal Nations, foreign government officials and multilateral organizations.

Ensure education free from sexual violence. President Biden will sign an Executive Order that will direct the Department of Education (ED) to review all of its existing regulations, orders, guidance, and policies to ensure consistency with the Biden-Harris Administration’s policy that students be guaranteed education free from sexual violence. It also directs ED to specifically evaluate the Title IX regulation issued under the previous administration and agency action taken pursuant to that regulation, to determine whether the regulation and agency action are consistent with the policies of the Biden-Harris Administration.”

Conclusion

The WTO at its 2017 Ministerial Conference held in Buenos Aires saw a joint declaration on women and trade released. There are currently 127 WTO Members who support the declaration. There was an interim report released in 2019 and an informal working group on trade and gender working on a voluntary basis to share information and best practices in ways to increase women’s role in global trade. Such activities are a start for the WTO, but much more could be done if there was greater support by the Members. The 2020-21 selection of Dr. Ngozi Okonjo-Iweala was an important action and will likely presage change at the Secretariat. Her priorities as reviewed in today’s video address trade issues that are important to economic recovery which may facilitate greater movement towards gender equality.

The challenges women face globally during the pandemic are significantly greater than those faced by men both in terms of lost employment, withdrawal from the workforce to deal with child care and much more. The UN Sustainable Development Goal of gender equality and empowerment of all women and girls is important for many reasons. In trade, gender equality will promote growth and innovation. This is true in all societies regardless of level of economic development.

The pandemic has pushed back progress in economic development for much of the world as has been often reported and has slowed or reversed the drive for gender equality and empowerment of half the world’s population.. More focus and efforts are needed to ensure achieving the UN SDG 5 by 2030. Trade is but one aspect of the challenge.

Today’s speeches by the three leaders of multilateral organizations handling trade show some of the broader issues facing global trade to recover from the pandemic and highlight the capabilities of women leading important organizations. The UN Women’s Executive Director highlighted the deep societal challenges that continue to retard gender equality in fact in many parts of the world.

Finally, the actions by President Biden and his Administration are the types of actions needed by countries who have not achieved gender equality to date. More can and must be done by nations around the world. International Women’s Day is a reminder of the enormous global opportunities that exist if gender equality and empowerment of women and girls is achieved.

WTO’s four Deputy Directors-General tenure reportedly concludes at the end of March 2021 — thanks for an outstanding job

A press account earlier this week (March 2) indicated that “New World Trade Organization Director General Ngozi Okonjo-Iweala yesterday apparently conveyed to her four existing deputy director generals that their tenure will not be continued
beyond the end of this month.” See Washington Trade Daily, March 2, 2021, page 7, .https://files.constantcontact.com/ef5f8ffe501/ed93e180-7dee-4beb-8629-0e73d4d0ea5c.pdf.

It is normal for existing Deputy Directors-Generals (DDGs) to depart shortly after the arrival of a new Director-General and to be selected before the new Director-General takes office. Indeed, typically DDGs have four year terms that start one month after the Director-General’s term. Pursuant to procedures adopted in late 2002, DDGs employment starts later and ends later than the DG’s. See PROCEDURES FOR THE APPOINTMENT OF DIRECTORS-GENERAL, Adopted by the General Council on 10 December 2002, WT/L/509 (20 January 2003) at para. 22 (“In order to ensure continuity at the senior management level, the terms of office of the Director-General and of the Deputy Directors-General shall be staggered, such that the terms of the Deputies expire subsequent to the expiry of the Director-General’s term.”). Because of the short time from appointment (February 15, 2021) to start (March 1, 2021) as Director-General for Dr. Ngozi Okonjo-Iweala, presumably the DDG selection process was delayed until after she took up her position on March 1.

While all DDGs will likely be new, it is possible for a new Director-General to keep on one or more of the DDGs. See WTO, Director-General Elect Azevêdo announces his four Deputy Directors-General, 17 August 2013, https://www.wto.org/english/news_e/news13_e/dgsel_17aug13_e.htm {(Director-General elect, Roberto Azevêdo has announced the appointment of Yi Xiaozhun of China, Karl-Ernst Brauner of Germany, Yonov Frederick Agah of Nigeria and David Shark of the United States as his four Deputies Director-General. The new Director-General will begin his term on 1 September while his deputies begin service on 1 October 2013.”); WTO, Lamy announces his four Deputy Directors-General, 29 July 2005, https://www.wto.org/english/news_e/pres05_e/pr415_e.htm (“Mr. Lamy, who assumes office on 1 September, told the General Council in a statement that he has selected Alejandro Jara of Chile, Valentine Rugwabiza of Rwanda, Harsha Singh of India and Rufus Yerxa of the United States. Their terms of office will begin on 1 October.” “Mr. Yerxa, a former Deputy U.S. Trade Representative, has served the last three years as Deputy Director-General to Director-General Supachai Panitchpakdi.”).

Three of the four current DDGs have served since October 1, 2013 and their second four year term would have ended September 30, 2021 but for the early departure of the prior Director-General Roberto Azevedo. Yonov Frederick Agah of Nigeria, Karl Brauner of Germany and Yi Xiaozhum of China are the three current DDGs who have served more than seven years. Alan Wolff of the United States is the fourth DDG and has served since October 1, 2017. Their backgrounds, areas of responsibility and press articles on the WTO webpage can be found here. WTO, The Deputy Directors-General, https://www.wto.org/english/thewto_e/dg_e/ddg_ra_e.htm

With the early departure of DG Azevedo, the agreed selection process for a new Director-General calls for the Members to select one of the four DDGs to serve as an Acting DG if there is a gap period between departure and appointment of a new Director-General. See PROCEDURES FOR THE APPOINTMENT OF DIRECTORS-GENERAL, Adopted by the General Council on 10 December 2002, WT/L/509 (20 January 2003) at para. 23 (“In the event of a vacancy in the post of Director-General, the General Council shall designate one of the existing Deputy Directors-General to serve as Acting Director-General until the appointment of a new Director-General. The Chair of the General Council shall initiate, as soon as possible, a process for appointment of a new Director-General, in keeping with the procedures set out herein, and may establish expedited deadlines as necessary in consultation with Members.”).

However, in 2020, WTO Members were not able to agree on which of the four DDGs should serve as an Acting Director-General. As a result Members asked the four DDGs to stay on and jointly handle the management responsibilities. See WTO, General Council agrees guidelines for final stage of DG selection, 31 July 2020, https://www.wto.org/english/news_e/news20_e/gc_31jul20_e.htm (“The decision to extend the terms of the four Deputy Directors-General came after consultative efforts had been made to designate one of them as Acting Director-General until a new Director-General takes office. Amb. Walker explained once again to members that choosing an Acting Director-General was “very much a housekeeping matter to facilitate the continued running of the organization” as the membership focused on choosing the new Director-General. But consultations did not yield a consensus on which of the four should be designated as Acting Director-General, so Amb. Walker proposed instead that all four DDGs stay on and continue their existing responsibilities until such time as the new Director-General takes office. During this period, all four DDGs will consult closely with the members as represented by the General Council chair. Amb. Walker underscored that during this interim phase, no structural changes will be made to the WTO Secretariat. Amb. Walker also stated that he remained open to consult with members.”).

The four DDGs and the entire Secretariat staff has carried on the work of the WTO in exceptional fashion for the last six months, receiving praise from WTO Members at the February 15, 2021 Special Session of the General Council to appoint the new Director-General. DDG Wolff on February 25, 2021 at an informal TNC and Heads of Delegation thanked Members for their praise and provided an overview of the activities of the organization during the six months where the four DDGs had been asked to shepherd the organization’s activities. See WTO, DDG Wolff calls on members to work with new Director-General to reform WTO, 25 February 2021, https://www.wto.org/english/news_e/news21_e/ddgaw_25feb21_e.htm. The paragraph reflecting praise from the Members appears below.

“I wish to take note of the thanks many of you expressed to the four Deputy Directors-General in your statements welcoming Dr Ngozi at last week’s meeting. We take that always as words of thanks for the Secretariat as a whole, our Directors and their professional and administrative staff, who bring great experience and talent to the tasks that lie ahead, as well as to the DGO members whom we asked to continue to serve during this period.  I also recognize the General Council chair, Ambassador David Walker, who has during these past six months always been available to the four DDGs, even during the intensive DG selection process.” 

The excerpts from his presentation that deals with the activities of the Secretariat during the six month period is copied below. As the length suggests, the WTO Secretariat has been very busy over the last six months.

“I will now provide a few highlights of Secretariat activities during the past few months. 

“In these unusual times, faced with the pandemic, the first responsibility of the Secretariat was to safeguard the health of the members and Secretariat staff while keeping the WTO and its functions running. To our knowledge, there have been no on-site transmissions of COVID-19.  Staff presence in the WTO buildings has been kept to a minimum following the guidelines of the Swiss authorities. 

“There have nevertheless been some serious illnesses among missions and the Secretariat. Loved ones have been lost. I wish to convey our heartfelt condolences to all who have lost a relative, a friend, or a colleague. 

“Due to the current health precautions, there are now no in-person WTO meetings. Only a few in-person meetings took place, in consultation with the Swiss authorities, during the last half of 2020 and so far this year up to and including this meeting. The lack of in-person meetings has not meant that activities ceased. On the contrary, the Secretariat and members moved into a higher gear:

“Intensive monitoring continued to keep members up to date on trade measures, both trade-restrictive and trade-facilitating.

“Nearly two dozen information notes have been circulated since last April, downloaded in total over 300,000 times. Ranked by those downloaded most often were:

E-commerce, trade and the COVID-19 pandemic;

Trade in Medical Goods in the Context of Tackling COVID-19;

Export prohibitions and restrictions; and

Trade in services in the context of the pandemic

“The most recent note, issued in December, is entitled Developing and delivering COVID-19 vaccines around the world: An information note about issues with trade impact.

“With the information provided from monitoring and information notes, members were in a position to make better-informed decisions.

“During the six-month interim period, through mid-February, members held 417 meetings. These included meetings of the General Council, the Dispute Settlement Body, the Trade Policy Review Body, and the Councils for Trade in Goods, TRIPS and Trade in Services, other WTO committees, the Joint Statement Initiatives and 106 meetings of dispute settlement panels. In short, members were highly active.

“Trade Policy Reviews were held for Zimbabwe; Thailand; Indonesia; Macao, China; India; Nicaragua; and Myanmar.

“A flagship annual market access study was produced to track developments in LDC trade during the pandemic. Studies were prepared on the utilization of trade preferences by LDCs. 

“Despite there being no in-person training and technical assistance, the WTO’s Institute for Technical Training held 20 national activities, 12 regional and one global activity. This does not count the technical assistance of many of the other WTO divisions.

“Internship and young professional programs continued.

“During the interim period, each month there were an average of 38 meetings of dispute settlement panels and arbitrations, with four new cases brought, three new panels composed and five panel reports issued. Virtual meetings of panels had up to 60 participants when third parties were present.

“The TBT Committee received 1,800 notifications, with members discussing 160 specific trade concerns. The e-agenda platform allowed an intensification of work, and the number of ePing subscribers crossed 13,000. Training events on standards continued across all regions. 

“Over the last six months, there has been considerable engagement by members on trade and environment issues. A high-level event co-hosted by the WTO and UNEP had 282 participants on Zoom, and received over 6,600 views with much public engagement, including across WTO social media channels. Two new member-led initiatives were launched: a Trade and Environmental Sustainability Structured Discussion (TESSD) and an Informal dialogue on plastics pollution and environmentally sustainable plastics trade. The Secretariat has also been very active in organizing trade and environment training and participating in capacity building events.

“Of course, clearly, the most noteworthy activity was the DG selection process. Due to the pandemic, it was conducted through very carefully choreographed in-person meetings with the General Council Chair, Ambassador David Walker, and the two facilitators, Ambassador Dacio Castillo and Ambassador Harald Aspelund.

“Last, but not least, the CBFA gavelled in a budget for 2021, providing a measure of certainty in what looked like uncertain times.

DDG Activities

“In addition to being responsible for the divisions reporting to them, the four DDGs acted on administrative matters that would normally be referred to the Director-General. I can report that this process worked smoothly and collegially. 

“We led efforts to  prepare for the transition, with detailed briefing of the incoming Director-General. 

“In January, I represented the WTO at the traditional informal ministerial gathering on WTO issues hosted by Switzerland every January, this time online, rather than in Davos. My very brief remarks and the Chair’s summary were posted on the WTO’s website.  Ambassador Chambovey will report on the meeting.

“My other speaking engagements included addresses to Agriculture Ministers at the Global Forum for Food and Agriculture, as well as to Chatham House in London and the Washington International Trade Association.  

“My colleague DDGs and I have also maintained contacts with Ambassadors here in Geneva and particularly the Chair of the General Council, Ambassador David Walker.”

Conclusion

While the WTO is facing a series of crises, there is an extraordinary group of people within the Secretariat, starting with the four Deputy Directors-General, who work effectively and tirelessly to support the 164 WTO Members, all those seeking to accede, and interfacing with NGOs, businesses, the media and public. The four DDGs are normally less visible than has been true in the last six months. Indeed, each of the DDGs has had extensive outreach opportunities during their tenure as can be seen from the news item link on The Deputy Directors-General webpage ( https://www.wto.org/english/thewto_e/dg_e/ddg_ra_e.htm). DDG Wolff, for example, has 51 news articles on the WTO news webpage just since September 1, 2020 (i.e., when the four DDGs collectively ran the WTO). This compares to 21 press articles in the first eight months of 2020, 34 press articles in 2019, 32 in 2018 and 4 in the October – December 2017 period — a total of 142 WTO press articles (most about speeches or statements DDG Wolff made to groups) in just three years and five months. In the history of the WTO there has not been a more visible or articulate DDG than Alan Wolff. But each of the DDGs has been active and highly supportive of the WTO’s mission during their tenure. They all deserve the thanks not only of the Missions in Geneva but also all those who want a relevant WTO going forward.

In a prior post, I had suggested that DG Okonjo-Iweala can help her efforts to obtain meaningful reform at the WTO by picking a strong set of DDGs who can expand her reach. See February 13, 2021, Leadership change at the WTO — with Dr. Ngozi Okonjo-Iweala’s arrival next week, what support team and early changes in the role of the Secretariat could help WTO Members move forward?, https://currentthoughtsontrade.com/2021/02/13/leadership-change-at-the-wto-with-dr-ngozi-okonjo-iwealas-arrival-next-week-what-support-team-and-early-changes-in-the-role-of-the-secretariat-could-help-wto-members-move-forward/.

Whoever is selected to be the next Deputy Directors-General, I join the many well-wishers in Geneva and in capitals in sending heartfelt thanks to the current DDGs for their efforts while at the WTO. You have helped keep the multilateral trading system ship afloat in very turbulent waters.

COVID-19 vaccines — France supports Italy’s blockage of a shipment to Australia; while Australia has asked the EU to permit the shipment, Australia will have its own production of AstraZeneca product by the end of March

In two posts yesterday, I reviewed the WTO General Council’s consideration of concerns expressed about the EU’s export authorization/licensing program for COVID-19 vaccines and the first blockage of a shipment of vaccine doses by Italy. See March 4, 2021, Italy blocks exports of COVID-19 vaccines to Australia, first blockage of export authorization by the EU or its member states, https://currentthoughtsontrade.com/2021/03/04/italy-blocks-exports-of-covid-19-vaccines-to-australia-first-blockage-of-export-authorization-by-the-eu-or-its-member-states/; March 4, 2021, The EU’s response to challenges to its actions on COVID-19 vaccine exports, https://currentthoughtsontrade.com/2021/03/04/the-eus-response-to-challenges-to-its-actions-on-covid-19-vaccine-exports/.

There has been a lot of press coverage of the blockage with various explanations for the action taken. See, e.g., NPR, Australia Asks European Commission To Review Italy’s Block On Vaccine Shipments, March 5, 2021, https://www.npr.org/sections/coronavirus-live-updates/2021/03/05/973922179/australia-asks-european-commission-to-review-italys-block-on-vaccine-shipments; BBC News, Covid: Italy ‘blocks’ AstraZeneca vaccine shipment to Australia, 5 March 2021, https://www.bbc.com/news/world-europe-56279202; Financial Times, Italy blocks shipment of Oxford/AstraZeneca vaccines to Australia, 4 March 2021, https://www.ft.com/content/bed655ac-9285-486a-b5ad-b015284798c8; Euronews, EU first as Italy blocks export of 250,000 COVID vaccines to Australia, 5 March 2021, https://www.euronews.com/2021/03/04/eu-first-as-italy-blocks-export-of-covid-19-vaccines-to-australia; Washington Post, Italy blocks export of AstraZeneca coronavirus vaccine to Australia, amid E.U. anger over delivery shortfalls, March 4, 2021, https://www.washingtonpost.com/world/europe/eu-blocks-vaccine-australia/2021/03/04/c89b07c6-7cff-11eb-8c5e-32e47b42b51b_story.html.

It is my understanding that the vast majority of export authorization requests that the EU has approved since the new control system went into effect have involved vaccines from Pfizer/BioNTech or Moderna where the EU has been less upset with shortfalls in deliveries to EU member states. It is also my understanding that of the authorization requests received for AstraZeneca, most have been for small volumes, although 300,000 doses were shipped to Australia earlier. The EU’s upset has been focused on AstraZeneca and the production and allocation process which has resulted in only about half of promised doses likely to be delivered to EU member states by the end of March.

Today, press reports indicate that France came out in support of Italy’s action in blocking the shipment. See Republicworld.com, France Supports Italy’s Decision To Block COVID-19 Vaccines Export To Australia, March 5, 2021, https://www.republicworld.com/world-news/europe/france-supports-italys-decision-to-block-covid-19-vaccines-export-to-australia.html . While the action by Italy (supported by the EU failure to oppose the proposed blockage) is problematic as interfering with commercial activities of private parties with other governments and because it appears to be simply an exercise in punishing a company where there are differences in view on contract obligations where there are manufacturing challenges in EU facilities, many governments are not subject to export blockage from the EU (e.g., COVAX low- and middle-income countries; various neighboring countries to the EU) meaning the pool of potentially affected purchasing countries is only part of the world.

Even for Australia, the extent of the damage from the blockage is probably minor considering that the vast majority of vaccine doses Australia has ordered (50 of 53.8 million) will be supplied by a local company, CSL, producing the AstraZeneca vaccine, with shipments expected to start by the end of March at a rate of 1,000,000/week. See ABC Science, CSL may manufacture mRNA and AstraZeneca vaccines that protect against new COVID-19 variants, 17 February 2021, https://www.abc.net.au/news/science/2021-02-18/covid-19-vaccines-csl-mrna-adenovirus-astrazeneca-pfizer-tga/13160404. While the Australian government has spoken to the EU on a number of occasions to get a resolution, the Australian government is in a better position to deal with the lack of a shipment because of the vastly lower case and death rates in Australia compared to most countries in the EU.

Australia’s Prime Minister Scott Morrison in today’s press conference reviewed Australia’s game plan for rolling out vaccinations and dealt with a number of questions on the Italian blockage. The portion of the transcript of the press conference dealing with questions of Italy’s blockage of aCOVID-19 vaccine doses is copied below. The full transcript is available at the following link. See Prime Minister of Australia, TRANSCRIPT, 05 Mar 2021, https://www.pm.gov.au/media/press-conference-sydney-nsw-7.

JOURNALIST: Prime Minister, do you blame the Italian authorities, blocking the supply of the AstraZeneca vaccine to Australia? Given obviously what’s just been laid out in terms of how bad the situation is there?

“PRIME MINISTER: Well, they’re certainly responsible for exercising the veto right they had through the EU process about those supplies coming to Australia. But the point about that is that we’d always anticipated that these sorts of problems could arise. And that’s why we’ve done a number of things, the most significant of which is to ensure that we have our own domestically produced vaccine. And we’re one of few countries that have done that. That means that has given us sovereignty over our vaccination program, which I think is incredibly important. I mean, I’m in regular contact with European leaders. As Professor Kelly said, in Italy people are dying at the rate of 300 a day. And so I can certainly understand the high level of anxiety that would exist in Italy and in many countries across Europe, as is regularly conveyed to me. And so they have some real difficulties there. They are in an unbridled crisis situation. That is not the situation in Australia. But, nevertheless, we have been able to secure our supplies, and additional supplies for importation, both with Pfizer and AstraZeneca, which means we can continue the rollout of our program. So, I want to assure Australians that we’ve been able to secure those vaccines. This particular shipment was not one we’d counted on for the rollout, and so we will continue unabated.”

“JOURNALIST: Prime Minister, have you talked to your EU counterparts about getting that shipment that’s been block released? Or have you had any luck on that front?

“PRIME MINISTER: I’ve had quite a few conversations, as has the Foreign Minister and Health Minister and others in engaging with our EU counterparts on these matters over some time.”

“JOURNALIST: Just on the overseas shipments, we’re meant to be getting more than 3 million doses from overseas. Are we still relying on those at all? Or are we completely not needing them?

“PROFESSOR BRENDAN MURPHY, SECRETARY OF THE DEPARTMENT OF HEALTH: So, we have those 300,000, which will really take us through at our current rate. We plan to use them until the CSL local production comes. We are still working, and still expect to get those other 3.8 million, and we may yet get more in coming weeks. And if we get some more in coming weeks, we will obviously ramp up the pre-local production release phase of the AstraZeneca. So, we can scale our vaccination program according to what we have at the moment. At the moment, we’ve deployed 200,000 doses right throughout the country to states and territories, and they’re about to stand up clinic next week. If we get more, they can do more. So, it’s all scalable and we’ve got the time to do it.”

“JOURNALIST: Prime Minister, notwithstanding our onshore vaccine capacity, are you worried about vaccine nationalism going forward? And is the incident in Italy overnight an example of vaccine nationalism?

“PRIME MINISTER: Yeah, look, vaccination nationalism or protectionism is a matter that has been regularly raised in international forums that I have been involved with. It’s a matter I discussed with Ursula Von der Leyen when I discussed this particular matter. It’s fair to say the European Union has seen a large amount of vaccines leave the European Union, so it would be unfair to suggest that they’ve engaged in a universal practice of that nature. But, obviously, you know, it’s important that contracts are honoured. It’s important that the vaccines not only reach across Europe and North America, but particularly in the developed world as well. I have been so impressed by the way that the Pacific Islands nations have performed during this pandemic, keeping their citizens safe. Up in Papua New Guinea now, it’s a more distressing situation. It has deteriorated somewhat. But, frankly the fact they have been able to maintain the position they have for so long is a great credit to Prime Minister Marape and the work that they’ve done there. So, yes, it is a real issue. It is a matter that I think particularly advanced countries have to be quite vigilant about, and it’s certainly a matter that I’ve raised very consistently, particularly for access for vaccines to those in the Pacific Islands family, and South-East Asia.”

Conclusion

The desire to vaccinate all citizens in a country as quickly as possible is understandable and almost always a politically sensitive issue in country. Vaccine rollout for a global pandemic is challenging and complicated by the need for authorizations on individual vaccines from individual countries or groups, ramp up challenges for supply chains, licensing or establishing of cooperative arrangements, development of distribution systems for products needing special handling (e.g., Pfizer/BioNTech and Moderna extra cold handling and storage requirements) and much more. What prior posts and today’s post demonstrate is that dramatic ramp ups are occurring at many facilities around the world with large increases in production and distribution expected in the 2nd quarter and the third quarter of this year and beyond that. In Australia, 92.9% of their total supplies will come from domestic production although production is expected to start only in late March of this year.

Thus, the export authorization program in the EU will hopefully expire or not be used in the coming months as more vaccines are approved in Europe and as existing approved vaccines increase production, thus making the EU current concerns far less relevant. Governments should encourage any companies with available vaccine capacity to work with vaccine producers to determine ways to cooperate in ramping up production in the coming months. Many arrangements have been announced in the last several months. Governments can facilitate ramp up as the U.S. has done in working with producers and potential partners to expedite/prioritize access to equipment and supplies (Johnson & Johnson and Merck).

.

U.S. and EU issue joint statement suspending for four months retaliatory tariffs from large civil aircraft WTO disputes (Airbus-Boeing)

Yesterday, the U.S. and United Kingdom announced a four month suspension of retaliatory tariffs from the Airbus-Boeing WTO disputes to provide time to seek a negotiated solution. As noted in my post on the development, it was expected that a similar agreement would be reached with the EU. See March 4, 2021, First step in resolving the Airbus-Boeing WTO dispute — U.K. and U.S. announce four month suspension of retaliatory tariffs effective March 4, 2021, https://currentthoughtsontrade.com/2021/03/04/first-step-in-resolving-the-airbus-boeing-wto-dispute-u-k-and-u-s-announce-four-month-suspension-of-retaliatory-tariffs-effective-march-4-2021/

Today a joint statement was released by the U.S. and the European Union on a similar four-month suspension of retaliatory tariffs. See USTR, Joint Statement of the European Union and the United States on the Large Civil Aircraft WTO Disputes, March 5, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/march/joint-statement-european-union-and-united-states-large-civil-aircraft-wto-disputes. The text of the joint statement is copied below.

“’The European Union and the United States today agreed on the mutual suspension for four months of the tariffs related to the World Trade Organization (WTO) Aircraft disputes. The suspension will cover all tariffs both on aircraft as well as on non-aircraft products, and will become effective as soon as the internal procedures on both sides are completed. 

“’This will allow the EU and the US to ease the burden on their industries and workers and focus efforts towards resolving these long running disputes at the WTO.

“’The EU and the US are committed to reach a comprehensive and durable negotiated solution to the Aircraft disputes. Key elements of a negotiated solution will include disciplines on future support in this sector, outstanding support measures, monitoring and enforcement, and addressing the trade distortive practices of and challenges posed by new entrants to the sector from non-market economies, such as China.

“’These steps signal the determination of both sides to embark on a fresh start in the relationship.’”

The agreement to suspend the retaliatory tariffs for four months was the result of a phone call between President Biden and EC President von der Leyen.

The White House has the following readout of the phone call:

Readout of President Joseph R. Biden, Jr. Call with European Commission President Ursula von der Leyen

“MARCH 05, 2021 • STATEMENTS AND RELEASES

“President Joseph R. Biden spoke today with European Commission President Ursula von der Leyen. He underscored his support for the European Union and his commitment to repair and revitalize the U.S.-EU partnership. Noting our shared values and the world’s largest trade and investment relationship, the leaders agreed to suspend the tariffs related to the World Trade Organization (WTO) Aircraft disputes for four months and to work toward resolving these long running disputes at the WTO.  They discussed the importance of close U.S.-EU cooperation to contain the COVID-19 pandemic and enhance global health security, pursue a sustainable global economic recovery, tackle the climate crisis, and strengthen democracy.  The leaders also agreed to coordinate on issues of shared interest, including China, Russia, Belarus, Ukraine, and the Western Balkans.” https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/05/readout-of-president-joseph-r-biden-jr-call-with-european-commission-president-ursula-von-der-leyen/.

The European Commission President von der Leyen issued a press release after her conversation with President Biden. See European Commission, Statement by President von der Leyen following her phone call with President of the United States Joe Biden, March 5, 2021, The press release is embedded below but the relevant paragraphs on the suspension of tariffs are copied below before the full press release.

“As a symbol of this fresh start, President Biden and I agreed to suspend all our tariffs imposed in the context of the Airbus-Boeing disputes, both on aircraft and non-aircraft products, for an initial period of 4 months. We both committed to focus on resolving our aircraft disputes, based on the work our respective trade representatives. This is excellent news for businesses and industries on both sides of the Atlantic, and a very positive signal for our economic cooperation in the years to come.”

Statement_by_President_von_der_Leyen_following_her_phone_call_with_President_of_the_United_States_Joe_Biden

EC Trade Commissioner Valdis Dombrovskis in a tweet indicated the suspension had been agreed and stated that “This is a major breakthrough that provides a welcome boost to EU exporters & it gives both sides time & space to resolve this long-running dispute.” https://twitter.com/VDombrovskis/status/1367888145505783810. See also Financial Times, EU and US agree to suspend tariffs in Airbus-Boeing dispute, March 5, 2021, https://www.ft.com/content/3da1759f-894e-4c1d-813f-5012d96bf52b.

While the development was not unexpected in light of yesterday’s announcement, it is a further sign of the major effort of the Biden Administration to work with our allies such as the European Union and is another manifestation of the Biden Administration’s embrace of multilateral solutions and working with allies.

Italy blocks exports of COVID-19 vaccines to Australia, first blockage of export authorization by the EU or its member states

In a post just released, I reviewed the EU position on its vaccine export authorization program presented at the recent WTO General Council meeting where the EU stated no export request had been blocked. That is no longer true as reviewed in a Financial Times piece released earlier today. See Financial Times, Italy blocks shipment of Oxford/AstraZeneca vaccine to Australia, |March 4, 2021, https://www.ft.com/content/bed655ac-9285-486a-b5ad-b015284798c8?desktop=true&segmentId=d8d3e364-5197-20eb-17cf-2437841d178a. The vaccine supplier is Oxford/AstraZeneca which is a company who has shipped only a part of the quantity promised to the EU thus far and been subject to a public argument with the European Commission. Italy apparently notified the EU at the end of last week (and hence ahead of the EU statement to the General Council this week). As the EU didn’t object, Italy was allowed to block the export. According to the Financial Times, “Italy’s foreign ministry said that it had requested that the commission block the export of 250,700 doses of the Oxford/AstraZeneca vaccine to Australia because the latter was considered a ‘non-vulnerable’ country. It also cited ‘the high number of vaccine doses covered by the request . . . compared to the quantity of doses supplied so far to Italy and, more generally, to EU countries.'”

Expect significant backlash against the EU at the WTO.

The EU’s response to challenges to its actions on COVID-19 vaccine exports

At the WTO General Council meeting held on March 1-2 this week, agenda item 9 was aimed at the European Union. The agenda item, entitled “Call to Prevent Export Restrictions on COVID-19,” was put on the agenda by Colombia, Costa Rica, Ecuador, Panama and Paraguay. I had reviewed this agenda item as one of 16 agenda items that was likely to draw a fair amount of attention. See February 26, 2021, WTO Director-General Ngozi Okonjo-Iweala’s first week on the job starts with a two day General Council meeting, https://currentthoughtsontrade.com/2021/02/26/wto-director-general-ngozi-okonjo-iwealas-first-week-on-the-job-starts-with-a-two-day-general-council-meeting/ (Agenda item 9 was added by Colombia, Costa Rica, Ecuador, Panama and Paraguay reflecting concerns by them (and presumably many other trading partners) about actions taken by the European Union to exert control over exports of vaccines from the EU in light of EU concerns about its own access to vaccines from manufacturers. See CALL TO PREVENT EXPORT RESTRICTIONS ON COVID-19 VACCINES, WT/GC/818 (18 February 2021)).

The new Director-General, Ngozi Okonjo-Iweala, has stressed the importance of the WTO doing more to address the COVID-19 pandemic and help Members recover. Equitable and affordable access to vaccines is an issue of importance to the membership and stressed by the Director-General. See, e.g., March 3, 2021, WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/; March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/

While the EU Ambassador provided comments on various agenda items, agenda item 9 was obviously one of importance to the EU. See EU Statement at the General Council of 2 March 2021 on the “Call to Prevent Export Restrictions on Covid-19Vaccines,” 02 March 2021, https://eeas.europa.eu/delegations/world-trade-organization-wto/94083/eu-statement-general-council-2-march-2021-%E2%80%9Ccall-prevent-export-restrictions-covid-19-vaccines%E2%80%9D_en. EU Ambassador João Aguiar Machado provided a detailed justification for the EU actions in imposing an export licensing/authorization regime on COVID-19 vaccines claiming lack of transparency by pharmaceutical companies and the need to ensure “fair” distribution. The EU program does not affect vaccines for COVAX low- and middle-income countries nor for various neighboring countries. Of note, for countries covered by the export licensing/authorization scheme, there have been 150 export requests all of which have been granted. The statement is embedded below.

EU-Statement-at-the-General-Council-of-2-March-2021-on-the-Call-to-Prevent-Export-Restrictions-on-Covid-19-Vaccines-–-02-March-2021-European-External-Action-Service

The EU stressed that the major problem facing the world was global capacity far below global demand. The EU is working to identify production bottlenecks and to encourage producers to license their products to maximize global production and expressed a willingness to work with other WTO Members and with the Director-General. The part of the statement covering the demand/supply imbalance is copied below.

“However, the root causes of the problem lie elsewhere: the exploding global demand is well above the global production today. As long as this global industrial challenge is not met, and the world population is not vaccinated quickly enough, we will all face a risk of a continuing health emergency including new Covid-19 variants and a prolonged economic crisis.

“The European Union believes there is an important role for public authorities to play and to drive the increase of production, and to facilitate access to the vaccines and other treatments that are in need today. Cooperation must be promoted amongst the different participants along the value chains where necessary to enhance production capacities. A closer, more integrated and more strategic public-private cooperation with the industry is needed. In this spirit, the EU has set-up a Task Force for Industrial Scale-up of COVID-19 vaccines to detect and help respond to issues in real-time. In order to ramp up production, we will, amongst others, work closely with manufacturers to help monitor supply chains and address identified production bottlenecks. Since EU vaccine production is critical for global supply, the benefits of this initiative will extend beyond the EU’s borders.

“Scaling-up of production on a global level requires further actions. It will not happen without increased global collaboration with the pharmaceutical industry, which should facilitate the transfer of the right know-how and technology for the highly complex vaccine production process. We should facilitate this collaboration, while also recognising that intellectual property provides the necessary platform for it to take place. Waiving intellectual property rights would disrupt this collaboration and the transfer of know-how. In conclusion, Mr Chairman, we believe it is legitimate to engage the sector in order to ensure that all complementary production facilities across companies and continents are actively contributing to ramp up production. Companies that have tried and failed to develop a vaccine of their own, for example, should actively consider making their facilities available for the production of vaccines of successful companies. Companies with new vaccines should consider whether they have checked all options for licensing agreements to increase production. The objective should be to ensure they enter into licence agreements with companies around the world that have the necessary production capacities and could export the vaccines to any low middle-income countries without production capacities. At the same time, we should be mindful that the manufacturing campaigns for covid-19 vaccines do not crowd out the production of other life-saving vaccines and therapeutics.

“The EU, working together with other WTO Members and under the leadership of the Director-General Dr. Ngozi Okonjo-Iweala is ready to facilitate a dialogue between the vaccine developers and companies with the production facilities that are ready to step in to help out with the production of vaccines and their delivery to the countries in need. We welcome the DG’s proposal to focus on collaboration among companies to enhance licensing in order to use all the adequate manufacturing capacity, including in developing countries. The EU is ready to facilitate this dialogue and contribute to the efforts on expanding these partnerships.

“The EU remains open to a dialogue with all WTO Members on how to facilitate the collaboration with the pharmaceutical industry on the transfer of know-how and technology. In the same manner, the EU remains open to a dialogue on how to facilitate the use of the TRIPS flexibilities, should the voluntary solutions fail or not be available. The flexibilities offered by the TRIPs Agreement are absolutely legitimate tools for Members in need, as many are in the midst of this pandemic. This includes fast track compulsory licences for export to countries without manufacturing capacity. Administrative burdens should not stand in the way of manufacturing and delivering vaccines to where they are needed.

“We believe that a successful contribution of the WTO to the current pandemic will require all WTO Members to agree on actions that will not only encompass the elements enshrined in the Ottawa Group’s proposal on Trade and Health, such as export restrictions or transparency, but also address the problem of insufficient manufacturing capacity. The EU stands ready to engage in such a dialogue.”

In my post yesterday, I reviewed some of the efforts that have already occurred where pharmaceutical companies are working with other companies to expand production and availability worldwide. See March 3, 2021:  WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/. But the articles referenced yesterday are just some of the collaborations going on as manufacturers with existing capacity work with companies with COVID-19 vaccines to help expand capacity and production and vaccine manufacturers work with contract producers to expand supply chain capabilities. An additional cooperation agreement was announced today in the press. In addition, some governments, including the U.S. and EU have also worked with manufacturers to ramp up production. See, e.g., Wall Street Journal, Novartis to Help Make CureVac Covid-19 Vaccine, March 4, 2021, https://www.wsj.com/articles/novartis-to-help-make-curevac-covid-19-vaccine-11614859271; Reuters, Poland strikes deal to produce Novavax COVID-19 vaccine, March 3, 2021, https://www.reuters.com/article/us-health-coronavirus-poland-mabion/poland-strikes-deal-to-produce-novavax-covid-19-vaccine-idUSKBN2AV19O (“Polish biotech firm Mabion has signed a preliminary agreement to manufacture Novavax’s COVID-19 vaccine with financial support from a state-run fund, as the government strives to accelerate its vaccination programme.”); PMLive, Novartis, Bayer announce separate agreements to bolster COVID-19 vaccine manufacturing, February 1, 2021, http://www.pmlive.com/pharma_news/novartis,_bayer_announce_separate_agreements_to_bolster_covid-19_vaccine_manufacturing_1362454#:~:text=Novartis%20and%20Bayer%20have%20announced,vaccine%20and%20CureVac’s%20vaccine%2C%20respectively.&text=Novartis%20will%20aim%20to%20begin,its%20site%20in%20Stein%2C%20Switzerland (“Novartis and Bayer have announced separate agreements to aid the manufacturing of Pfizer/BioNTech’s COVID-19 vaccine and CureVac’s vaccine, respectively.”); Pharmaceutical Technology, Pharmaceutical Technology-02-01-2021, Volume 2021
Supplement, Issue 1, Contract Service Tapped to Produce COVID-19 Vaccines, Page Number: s29-s30, https://www.pharmtech.com/view/contract-service-tapped-to-produce-covid-19-vaccines (reviewing actions by Pfizer/BioNTech, Moderna, Johnson & Johnson, AstraZeneca, Novavax). Expanding supply also requires vaccines being approved by governments for use. The EU recently announced it was beginning review of the Russian vaccine Sputnik V. See The Globe and Mail, Europe starts review of Russia’s Sputnik V vaccine to try to overcome shortages as new variants appear, March 4, 2021, https://www.theglobeandmail.com/world/article-europe-starts-review-of-russias-sputnik-v-vaccine-to-try-to-overcome/. And, of course, major producers are expanding where they are producing their vaccines using existing or new facilities. See, e.g., The Globe and Mail, Novavax publishes COVID-19 vaccine contract with Canada, March 4, 2021, https://www.theglobeandmail.com/canada/article-novavax-publishes-covid-19-vaccine-contract-with-canada/ (“American pharmaceutical company Novavax has published its vaccine agreement with Canada for 52 million doses of its COVID-19 vaccine. The company expects to eventually produce some of the vaccine in Canada.”).

Thus, a great deal is going on to expand production capacity globally. Strong intellectual property laws are critical to the developments and resource commitments being made. While many developing countries are pushing to start a process of text drafting for a TRIPS waiver at the WTO, such an effort would be counterproductive to global health needs over the longer term. Washington Trade Daily’s March 2, 2021 edition at pages 5-7 has an article entitled “Call for TRIPS Waiver Negotiations” which presents the views of largely developing countries on the desire to move to negotiating text even though there is not agreement on the proposed waiver. See Washington Trade Daily, March 2, 2021, https://files.constantcontact.com/ef5f8ffe501/ed93e180-7dee-4beb-8629-0e73d4d0ea5c.pdf.

The U.S. Chamber of Commerce released a statement on March 2nd characterizing the effort for a TRIPS waiver being promoted by India, South Africa and others as “misguided”. See U.S. Chamber, U.S. Chamber Statement on Proposed WTO IP Rights Waiver, March 2, 2021, https://www.uschamber.com/press-release/us-chamber-statement-proposed-wto-ip-rights-waiver. The statement is copied below (emphasis added to the third paragraph).

WASHINGTON, D.C. – The U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) issued the following statement from Senior Vice President Patrick Kilbride regarding the World Trade Organization (WTO) General Council’s discussion of a proposed waiver of intellectual property (IP) commitments in the Trade Related Aspects of Intellectual Property Rights (TRIPS) Agreement. 
 
“‘Vaccine distribution is critical for ending the pandemic and reviving the global economy. The U.S. Chamber of Commerce welcomes the WTO General Council’s discussion of the role of intellectual property rights in defeating the COVID-19 pandemic. During this time, transparent and predictable intellectual property rights have formed the legal and economic basis for an unprecedented level of highly successful collaborations between government, industry, academia and NGOs. 
 
“‘The Chamber supports decisive and bold action to remove regulatory and trade barriers in order to boost the global distribution of treatments and vaccines, including support of global vaccine programs such as COVAX. Proposals to waive intellectual property rights are misguided and a distraction from the real work of reinforcing supply chains and assisting countries to procure, distribute and administer vaccines to billions of the world’s citizens. Diminishing intellectual property rights would make it more difficult to quickly develop and distribute vaccines or treatments in the future pandemics the world will face.  
 
“’The ‘3rd Way’ proposed by incoming WTO Director General Ngozi Okonjo-Iweala to encourage licensing agreements is worthy of further discussion and consistent with the ongoing success of government-industry efforts to bring an end to COVID-19 as rapidly and as safely as possible.’”

Conclusion 

While there has been a lot of concern among trading partners about the EU action in imposing export licensing of COVID-19 vaccines, to date the licensing system does not appear to have caused problems in fact in the distribution of doses ordered by the group of countries covered by the new system. Moreover, with or without government encouragement, vaccine producers have been working to expand production through arrangements with other vaccine producers, through working with contract manufacturers, and by expanding facilities and internal capacities.

There is no doubt that the COVID-19 pandemic presents a once in a century global health pandemic with demand at the beginning far outstripping supply. Governments have a role to play working with producers, suppliers, those involved in distribution and applying the vaccines to address bottlenecks, to provide encouragement and incentives to rapidly expand production and to support the efforts of the WHO, GAVI, CEPI, and UNICEF to fund the needs of COVAX. While concerns in the early days of vaccine rollout are understandable, COVAX has contracts with a number of vaccine producers and others under negotiation or awaiting approval. AstraZeneca, the first vaccine producer with a contract to supply COVAX put out a press release on March 2, 2021 which is copied in part below. See AstraZeneca, AstraZeneca advances mass global rollout of COVID-19 vaccine through COVAX, March 2, 2021, https://www.astrazeneca.com/media-centre/press-releases/2021/astrazeneca-advances-mass-global-rollout-of-covid-19-vaccine-through-covax.html.

Supply to 142 countries underway as part of the unprecedented effort to bring
broad and equitable access to the vaccine

“AstraZeneca with its partner Serum Institute of India
will be the biggest initial supplier to COVAX
 

“The first of many millions of doses of AstraZeneca’s COVID-19 vaccine have begun arriving in low and middle-income countries across the world through the multilateral COVAX initiative, the first steps in fulfilling the Company’s efforts to provide broad and equitable access to the vaccine.

“First COVAX shipments were dispatched late last week to Ghana and Cote D’Ivoire, and more are due to begin arriving this week in countries including the Philippines, Indonesia, Fiji, Mongolia and Moldova. This supply represents the first COVID-19 vaccine for many of these countries.

“Further shipments will arrive in the coming weeks with the aim of supplying a total of 142 countries with hundreds of millions of doses of the vaccine in the coming months. The majority of these doses, manufactured by AstraZeneca and its licence partner Serum Institute of India, will go to low and middle-income countries.

“Pascal Soriot, Chief Executive Officer, Astra Zeneca, said: ‘These first steps towards fulfilling our broad, equitable and no-profit emergency response to the pandemic mean millions of people, irrespective of their country’s income level, will soon be protected against this deadly virus. This is a moment of great pride for us at AstraZeneca and I am extremely grateful to our partners including Gavi, CEPI and Oxford University for their hard work and dedication in order to make this humanitarian ideal a reality for many millions of people around the world.’

“Seth Berkley, Chief Executive Officer, Gavi, said: ‘Global, equitable access to COVID-19 vaccines is only possible when the public and private sectors work together. When we launched the Gavi COVAX Advance Market Commitment in June 2020, our first Agreement was with AstraZeneca. Nine months later, the first doses are already being delivered to those that need them most. This is the beginning of COVAX’s effort to end the acute phase of the pandemic, not the end, but we can all take strength from this moment and I thank AstraZeneca and the University of Oxford for their support and partnership at every step of our journey.’

“Vaccine shipments have been allocated according to the COVAX Allocation Framework which determines volume per participating country based on a number of factors, including country readiness, national regulatory authorisations and national vaccination plans in place. The supply through COVAX follows the recent Emergency Use Listing by the World Health Organization (WHO) for active immunisation in individuals 18 years of age and older, which provides a vital and accelerated pathway to enable supply.

“AstraZeneca was the first global pharmaceutical company to join COVAX in June 2020 in line with the Company’s shared commitment to global, equitable access to vaccines.

“The vaccine can be stored, transported and handled at normal refrigerated conditions (2-8 degrees Celsius/36-46 degrees Fahrenheit) for at least six months and administered within existing healthcare settings.”

The “third way” sought by the WTO Director-General has been underway for some time and is picking up speed as vaccines start to be approved. There are an increasing number of announced agreements among producers to work together to expand production of particular vaccines. Thus, collaboration and cooperation among producers has and is occurring. Governments can help by identifying bottlenecks in all areas relevant to raw materials, intermediate products, finished vaccine doses, distribution and resources to apply the vaccines and helping to resolve the bottlenecks; by encouraging increased ramp ups of capacity and production, including through licensing.

A broad waiver of TRIPS obligations as being pursued by India, South Africa and many other developing and least developed countries is unwise, unlikely to be agreed to, and if implemented, will backfire in terms of global cooperation in getting the world’s population vaccinated and will destroy the likelihood of private sector engagement to solve future pandemics. The EU’s approach as laid out in EU Ambassador João Aguiar Machado’s statement on March 2 is likely the best course forward whether through the WTO or otherwise.

First step in resolving the Airbus-Boeing WTO dispute — U.K. and U.S. announce four month suspension of retaliatory tariffs effective March 4, 2021

For the U.S., EU and U.K., finding a path to resolving the long-running dispute on civil aircraft subsidies is a major priority. Both the U.S. and the EU have been authorized to retaliate by the WTO in recent years. Some efforts at finding a resolution were pursued during the Trump Administration. The Biden Administration has made it clear that it wants to find ways to work with our allies and resolving the underlying civil aircraft dispute has been a topic covered by President Biden’s USTR nominee Katherine Tai in her confirmation hearing. See March 2, 2021, Katherine Tai, USTR designate, on addressing WTO reform including dispute settlement if confirmed; the USTR 2021 Trade Policy Agenda, https://currentthoughtsontrade.com/2021/03/02/katherine-tai-ustr-designate-on-addressing-wto-reform-including-dispute-settlement-if-confirmed-the-ustr-2021-trade-policy-agenda/.

Today the U.S. and the United Kingdom released a joint statement following agreement to suspend retaliatory tariffs for four months from March 4, 2021 to provide space for seeking a negotiated solution. The U.K. had suspended retaliatory tariffs since January 1st. See USTR, Joint US-UK Statement on Suspension of Large Civilian Aircraft Tariffs, March 4, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/march/joint-us-uk-statement-suspension-large-civilian-aircraft-tariffs. The joint statement is embedded below.

US-UK-4-month-tariff-suspension-to-ease-the-burden-on-industry-while-seek-resolution-of-Airbus-Boeing-disputes

The announcement does not include the EU as a party, but it is expected that the EU will join such action since they are the major European party and face the largest amount of retaliation. In early December 2020, during the last months of the Trump Administration, EC Trade Commissioner Valdis Dombrovskis had indicated the EU would suspend retaliatory tariffs if the U.S. did as well. See Bloomberg, EU Says Boeing-Airbus Dispute Can Be Settled Under Trump, December 3, 2020, https://www.bloomberg.com/news/articles/2020-12-03/eu-says-boeing-airbus-dispute-can-be-settled-under-trump (“EU Trade Commissioner Valdis Dombrovskis said ‘it’s possible’ that both sides will reach an agreement by Jan. 20 governing aid to Boeing Co. and Airbus SE. He reiterated an offer to remove EU retaliatory tariffs on $4 billion of American goods if the U.S. does the same for its duties on $7.5 billion of European products. ‘The solution which would be preferred by the EU would be that both sides withdraw or at least suspend their tariffs and we reach agreement on future disciplines in the area of civil aviation,’ Dombrovskis said in an interview with Bloomberg TV on Thursday. ‘We are still intensively engaged with the current U.S. administration.'”).

The U.S. goal is certainly to find a solution that works for the Boeing Company and that permits the U.S., EU and U.K. to turn their attention to the challenges in the civil aircraft industry by major new entrants like China. Today’s action with the U.K. is the first step in the Biden Administration’s efforts to get this dispute resolved.

WTO Director-General opinion piece in the Financial Times and recent actions by the U.S.

WTO Director-General Ngozi Okonjo-Iweala on her second day on the job in Geneva had an opinion piece in the Financial Times taking to the public her message to the WTO membership that “WTO members must intensify co-operation”. Financial Times, Opinion, Ngozi Okonjo-Iweala: WTO members must intensify co-operation, March 2, 2021, https://www.ft.com/content/0654600f-92cc-47ad-bfe6-561db88f7019. To a large extent, the opinion piece reflects her opening statement to the General Council on March 1st. See March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/. The opinion piece starts with the challenges posed by the COVID-19 pandemic and the need for equitable and affordable access to vaccines and other medical goods. The Director-General (DG) then goes through the reforms and ongoing negotiations that need to be addressed. The topics include completion of the fisheries subsidies negotiations, dispute settlement reform, updating the rule book to include topics like digital trade and other Joint Statement initiatives, restarting negotiations on environmental goods and services, various topics in agriculture (market access, domestic subsidies, removal of export restrictions on farm products purchased for humanitarian purposes by the World Food Programme) and rules to address distortions flowing from industrial subsidies to state-owned enterprises.

For this post, I will focus on the access to vaccines issue and recent actions by the United States (but also others) on this topic.

Two paragraphs from the opinion piece lay out the views of the Director-General on access to vaccines. They are copied below.

“However, for the global economy to return to sustained growth, we must intensify co-operation to ensure equitable and affordable access to vaccines, therapetics and diagnostics. The WTO can and must play a more forceful role in encouraging members to minimise or remove export restrictions and prohibitions that hinder supply chains for medical goods and equipment.

WTO members have a further responsibility to reject vaccine nationalism and protectionism while co-operating on promising new treatments and vaccines. We must find a ‘third way’ on intellectual property that preserves the multilateral rules that encourage research and innovation while promoting licensing agreements to help scale-up manufacturing of medical products. Some pharmaceutical companies such as AstraZeneca, Johnson & Johnson, and the Serum Institute of India are already doing this.”

While India and South Africa have sought a waiver for all WTO Members from most TRIPS Agreement obligations during the pandemic, that proposal has not received the backing from various developed countries with pharmaceutical industries, a fact the new DG saw first hand during the General Council meeting of March 1-2 where the TRIPS Council reported that there was not yet agreement on what to recommend on the proposal. Rather through the WHO, GAVI and CEPI and the creation of COVAX to buy vaccines for low- and middle-income countries and others wishing to participate, the expectation has been that some 2 billion doses would be available through COVAX in 2021 starting in February and ramping up, with 1.3 billion doses going to 92 countries needing assistance.

In her opening statement to the General Council, DG Ngozi Okonjo-Iweala indicated that COVAX would not be enough even though shipments had started. The latest COVAX interim distribution forecast is embedded below and dates from February 3 and shows the number of doses from the AstraZeneca/Serum Institute, from AstraZeneca’s own facilities and from Pfizer/BioNTech.

COVAX-Interim-Distribution-Forecast

Press accounts identify Ghana as the first recipient from COVAX, but other countries have already received the vaccines as well. See, e.g., World health Organization, First COVID-19 COVAX vaccine doses administered in Africa, March 1, 2021,https://www.who.int/news/item/01-03-2021-first-covid-19-covax-vaccine-doses-administered-in-africa; Pan American Health Organization, Colombia receives the first vaccines arriving in the Americas through COVAX, March 1, 2021, https://www.paho.org/en/news/1-3-2021-colombia-receives-first-vaccines-arriving-americas-through-covax. The Financial Times vaccine tracker shows that by March 3, 2021, 268.6 million doses had been administered in 128 locations/countries. Financial Times, Covid-19 vaccine tracker: the global race to vaccinate, March 3, 2021, https://ig.ft.com/coronavirus-vaccine-tracker/?areas=gbr&areas=isr&areas=usa&areas=eue&cumulative=1&populationAdjusted=1.

In recent weeks, the United States confirmed it was contributing $4 billion to COVAX ($2 billion immediately and $2 billion over the rest of 2021 and 2022). Other countries and the EU increased contributions as well and some countries have agreed to send some vaccine doses as well. See February 19, 2021, COVAX’s efforts to distribute COVID-19 vaccines  to low- and middle income countries — additional momentum received from G-7 virtual meeting, https://currentthoughtsontrade.com/2021/02/19/covaxs-efforts-to-distribute-covid-19-vaccines-to-low-and-middle-income-countries-additional-momentum-from-g-7-virtual-meeting/

From a recent WHO release it is clear that GAVI and the other COVAX partners are working at expanding available vaccines and seeking additional funding beyond what has already been provided or promised. Vaccines from Johnson & Johnson and potentially from Novavax were identified. See UN News, Equitable vaccine delivery plan needs more support to succeed: COVAX partners, March 2, 2021, https://news.un.org/en/story/2021/03/1086142. The release is embedded below.

Equitable-vaccine-delivery-plan-needs-more-support-to-succeed_-COVAX-partners-_-_-UN-News

“intensify co-operation”

There have been efforts at co-operation from the beginning as AstraZeneca’s licensing of its product to India’s Serum Institute demonstrated.

In the United States, President Biden on March 2 announced co-operation between Merck and Johnson & Johnson where Merck will convert two facilities to help in the production of the Johnson & Johnson vaccine. This has been supported by the United States through use of the Defense Production Act to speed access to equipment needed for the conversion. Merck is a major vaccine producer but doesn’t have a viable COVID-19 vaccine of its own. See NPR, How The White House Got 2 Pharma Rivals To Work Together On COVID-19 Vaccine, March 3, 2021, https://www.npr.org/2021/03/03/973117712/how-the-white-house-got-2-pharma-foes-to-work-together-on-covid-19-vaccine. This is the type of co-operation that DG Okonjo-Iweala referenced in her opinion piece yesterday.

Johnson & Johnson in late February had struck an arrangement with Sanofi in France for similar cooperation at one of Sanofi’s facilities in France. Similarly, Sanofi had earlier struck a deal with Pfizer-BioNTech. See Sanofi, Sanofi to provide manufacturing support to Johnson & Johnson for their COVID-19 vaccine to help address global supply demands, February 22, 2021, https://www.sanofi.com/-/media/Project/One-Sanofi-Web/Websites/Global/Sanofi-COM/Home/media-room/press-releases/2021/20200222-Sanofi-statement-EN.pdf.

The world’s largest vaccine producer, GlaxoSmithKline, has entered an agreement to help produce CureVac produce some of CureVac’s first generation COVID-19 vaccine in 2021 and “to jointly develop next generation mRNA vaccines for COVID-19 with the potential for a multi-valent approach to address multiple emerging variants in one vaccine.” See GSK, GSK and CureVac to develop next generation mRNA COVID-19vaccines, 3 February 2021, https://www.gsk.com/en-gb/media/press-releases/gsk-and-curevac-to-develop-next-generation-mrna-covid-19-vaccines/.

There are, of course, other vaccine producers — China has multiple vaccines developed, Russia, India, Cuba has two in development — including companies who do not have a COVID-19 vaccine in development. Thus, additional opportunities for co-operation should exist for those producers as well.

Conclusion

There is understandably great focus within the WTO and its Members in getting past the COVID-19 pandemic and getting economies back on growth paths. The rapid development of vaccines has been critical and has seen extraordinary success in the 15 months since COVID-19 was first identified. The R&D efforts globally have been stunning and have received some government support which has undoubtedly been important particularly in giving pharmaceutical companies an assist in early efforts to ramp up production. There is no question that the R&D efforts would not have occurred at the level that has taken place without strong intellectual property protections.

There has been great efforts by the WHO along with GAVI and CEPI to prepare to be able to get large quantities of vaccines to low- and middle-income countries when vaccines are available including by contracting with multiple companies pursuing a vaccine, reserving capacity, etc. There have been efforts by many countries to help build support for the COVAX approach and to provide funding for the purchase of vaccines for those in need. The effort is having success and can be more successful as 2021 moves into the second quarter and as countries, NGOs, businesses and individuals contribute to see that there is adequate funding for the effort being undertaken.

In addition to COVAX, a number of countries have been sending some of their production of vaccines to other countries. These include China, Russia and India. The U.S. has been in discussions with Japan, Australia and India for helping in getting vaccines to some countries as well. See Financial Times, US and Asia allies plan Covid vaccine strategy to counter China, March 3, 2021, https://www.ft.com/content/1dc04520-c2fb-4859-9821-c405f51f8586. These efforts are likely to accelerate as 2021 moves into the 3rd and 4th quarters.

Moreover, many of the major Western pharmaceutical companies engaged in vaccine production have partnered with other companies around the world to expand capacity and production of vaccines that have proven successful. So cooperation is already occurring. The Biden Administration’s efforts in recent weeks with Johnson & Johnson and Merck show that government involvement to encourage cooperation for expanding capacity and production and providing assistance in terms of availability of supplies can be an important assist to ramping up production.

Thus, the track record to date does not support a waiver of most TRIPS obligations as has been requested by the world’s largest producer of vaccines (India) and South Africa. Private companies have worked with partners on developments and in a number of cases on producing vaccines. Early success vaccines like Pfizer/BioNTech and Moderna have led to significant increases in plans for production by those companies through their own operations or through partnering with others. A number of other vaccines are now approved in major markets or are close to being approved. Significant funding has been provided or promised to make vaccines available to those in need at no cost.

All of the above is “the third way” sought by the new Director-General. It is already working. The WTO should focus its efforts on export restraints on medical goods and collaborate with other multilateral organizations to understand bottlenecks in capacity expansions, supply chain issues, distribution challenges and other aspects to determine if there are matters requiring WTO attention.

Katherine Tai, USTR designate, on addressing WTO reform including dispute settlement if confirmed; the USTR 2021 Trade Policy Agenda

President Biden’s nominee for U.S. Trade Representative had a hearing on her nomination before the U.S. Senate Finance Committee on Thursday, February 25, 2021. Written questions to the nominee were due to the Chairman of the Committee on February 26 by 5:00 p.m. Questions with answers were returned to the Committee by the USTR nominee on March 1. Ms. Tai will be one of three nominees who will be voted on by the Senate Finance Committee on March 3 at 10:00 a.m. See Reuters, Senate panel to vote Wednesday on three Biden nominees, including trade pick Tai, March 1 2021, https://www.reuters.com/article/us-usa-biden-nominations/senate-panel-to-vote-wednesday-on-three-biden-nominees-including-trade-pick-tai-idUSKCN2AT3K4?il=0; Inside U.S. Trade’s World Trade Online, Finance Committee to vote on Tai’s nomination on Wednesday, March 1, 2021, https://insidetrade.com/trade/finance-committee-vote-tai%E2%80%99s-nomination-wednesday (includes link to answers to questions from Senate Finance Committee by the nominee).

It is expected that Ms. Tai will receive an affirmative vote and be referred to the full Senate for a confirmation vote in the near future. It is expected that she will be confirmed by the Senate in the coming days.

I had reviewed the February 25th hearing in an earlier post. See February 25, 2021, U.S. Trade Representative nominee Katherine Tai confirmation hearing before the U.S. Senate Finance Committee, https://currentthoughtsontrade.com/2021/02/25/u-s-trade-representative-nominee-katherine-tai-confirmation-hearing-before-the-u-s-senate-finance-committee/. The 95-page compilation of questions for the record and Ms. Tai’s answers contains a little more explanation of her view of the approach of the Biden team on trade issues of importance to the WTO membership. Yesterday was also the day that USTR released the 2021 Trade Policy Agenda and 2020 Annual Report of the President of the United States on the Trade Agreements Program.

While the bulk of questions to Ms. Tai were on the U.S.-China relationship and a wide array of issues flowing from various Chinese practices, there were also a number of questions going to WTO reform and, in particular, on dispute settlement and the Appellate Body. There were also a series of questions on the U.S.-EU WTO disputes on Airbus/Boeing. There were also questions about U.S. actions that are subject to WTO dispute (though the questions didn’t focus on the WTO disputes) — Section 232 tariffs on steel and aluminum; Section 301 tariffs on large parts of imports from China. There were questions on the Environmental Goods Agreement negotiations which stopped in 2016 and whether plurilateral negotiations should be on a non-MFN basis. There were also several questions about the WTO Government Procurement Agreement and U.S. notification of its intent to withdraw coverage from certain medical goods. In addition most of the topics raised in the hearing were covered by specific written questions (e.g., USMCA enforcement, US-EU issues on digital services taxes, negotiations with the U.K., Kenya, CPTPP countries, market access issues with countries like India, Japan and others).

On WTO reform and problems with the WTO dispute settlement system, Ms. Tai’s responses indicate that the Biden Administration will be actively engaged in search for reforms. This is the first affirmative indication that the Biden Administration is likely to move past identifying the myriad problems with the dispute settlement system (something the Trump team identified with great specificity) to engaging in identifying reforms needed. Similarly, Ms. Tai’s response on the WTO disputes on Airbus-Boeing indicates the Biden Administration will be focusing on finding a negotiated solution with the European Union. Similarly, the Biden Administration will focus on enforcement of existing obligations our trading partners have at the WTO or bilaterally or plurilaterally. With China this means the U.S. will seek compliance through the WTO or through bilateral agreements (such as the U.S.-China Phase I Agreement) where there are specific commitments not being complied with, and the U.S. will seek through negotiations new rules where there is a lack of clarity in current agreements or lack of existing rules.

The 2021 Trade Policy Agenda looks at how trade policy can address core Biden Administration priorities — tackling the COVID-19 pandemic and restoring the economy; being worker centric; putting the world on a sustainable environment and climate path; advancing racial equity and supporting underserved communities; addressing China’s coercive and unfair economic trade practices through a comprehensive strategy; partnering with friends and allies; standing up for American farmers, ranchers, food manufacturers and fishers; promoting equitable economic growth around the world; and making the rules count (enforcement). While many of the Administration’s priorities from a trade perspective include areas for potential WTO action, the main discussion of WTO activity is in the partnering with friends and allies section. A three page fact sheet from USTR released yesterday provides a summary on the 2021 trade policy agenda and is embedded below.

fact-sheet-on-2021-Trade-Policy-Agenda-report

Senate Finance Committee Questions and Ms. Tai’s Responses dealing directly with the WTO or the US-EU Airbus-Boeing disputes

I have copied below the questions and responses that deal directly with the WTO or the US-EU Airbus-Boeing disputes. I include the name of the Senator asking the question. Italics (questions) and bold (name of Senator and answers of Ms. Tai) in the materials is from the original text.

Chairman Wyden

“Question 2 – Boeing/Airbus Dispute:

“As a longtime trade professional, you’re well aware of the history of the Boeing/Airbus dispute, a case that has spanned well over a decade. At the end of the WTO process, American businesses continue to be in an untenable position. The Europeans are continuing to subsidize Airbus to the detriment of U.S. competitors, while small American businesses—already suffering from COVID-related challenges—are facing extra tariffs on a variety of European products.

“The Boeing/Airbus dispute is just one “trade irritant” between the United States and Europe. There are numerous others—including digital services taxes, biotech authorization processes that aren’t based on science, and protectionist policies in standards development.

What’s going to change under the Biden Administration – and a USTR Tai – to ensure that Washington and Brussels can bring this dispute to a meaningful and timely conclusion? And ultimately, what would a positive outcome look like?

Answer: The Boeing/Airbus WTO litigation has been ongoing for more than 15 years. If confirmed, I will make it a priority to resolve this long-running dispute in a way that ensures Boeing and its workers can compete on a level playing field.

“Question 3 – WTO Reform:

“It was not always clear that the previous administration saw the value in the WTO. In contrast, the Biden Administration has pledged to work with our allies and re-engage in multilateral institutions like the WTO.

“That said, there has been bipartisan agreement that the WTO is in need of reform. There are numerous issues with the institution—from the lack of meaningful negotiations, to failure to comply with notification and transparency requirements, to ongoing concerns regarding the Appellate Body.

Where do you recommend the United States start in restoring the WTO to a functioning and useful institution?

Answer: If confirmed, I will work to re-engage with like-minded partners who similarly recognize the importance and necessity of WTO reform. Since the founding of the General Agreement on Tariffs and Trade (GATT) in 1947, U.S. leadership has been critical at every juncture when the global trade system has required a major update. This will be difficult work that may take some time, but I remain hopeful that with proper U.S. leadership, we can achieve the necessary reforms.

How can the United States support the incoming Director General, Dr. Okonjo-Iweala, in building consensus and ultimately ensuring that the WTO makes the needed reforms?

Answer: If confirmed, I will work closely with Dr. Okonjo-Iweala, following her own historic appointment, to tackle these challenges in a practical and constructive manner. Dr. Okonjo-Iweala brings a wealth of knowledge from her 25 years of experience at the World Bank and her two terms as Nigeria’s Finance Minister. She is widely respected for her leadership and management skills. The U.S. stands ready to assist her in building the consensus required to achieve the much-needed reforms.

Ranking Member Crapo

“Question 4:

“I have concerns about the power of technology companies. However, I am concerned that the EU is using such concerns as fig-leaf for discriminatory measures against U.S. businesses, including unreasonable digital services taxes or through measures that appear to target American companies in particular, like the Digital Services Act.

Are you willing to aggressively challenge these types of measures whether through use of Section 301 or through WTO dispute settlement?

Answer: The previous Administration started Section 301 investigations in response to the digital service taxes introduced by a number of countries, but it then suspended the introduction or implementation of specific remedies to allow time for negotiations. If confirmed, I will review the status of those actions and will work with my colleagues at the Treasury Department to address digital services taxes as part of the multilateral effort to address base erosion and profit shifting through the OECD/G20 process.

“Question 10:

“WTO reform is of great interest to many Members of this Committee. In particular, there are bipartisan concerns about overreach by the WTO Appellate Body. While I see some utility in second-level review, we need to ensure reforms that stop activism by the Appellate Body, including through rulings that have undercut our trade remedy laws and environmental conservation measures.

What are some concrete reforms that you think are necessary to ensure the Appellate Body operates as intended?

Answer: Over the years, the Appellate Body has overstepped its authority and erred in interpreting WTO agreements in a number of cases, to the detriment of the United States and other WTO members. In addition, the Appellate Body has failed to follow existing rules created to ensure that disputes are resolved in a timely manner. Reforms are needed to ensure that the underlying causes of such problems do not resurface and that the Appellate Body does not diminish the rights and obligations of WTO members.

“Question 12:

“I am deeply concerned about data localization requirements. The European Union attempts to be invoking privacy concerns in the WTO E-commerce negotiations as an excuse to allow it to engage in protectionist practices with respect to data.

Do you agree that that United States should not accept the EU’s proposed exception to allow countries to engage in data localization?

Answer: To participate in today’s global economy, U.S. companies need the ability to access networks, transfer data and use secure data centers of their choice. If confirmed, I commit to using the tools at my disposal to ensure that American workers and innovators are able to compete effectively abroad.

Senator Grassley

“Question 1:

If confirmed, how will you use the tremendous leverage the United States has to revitalize the WTO’s negotiating function so that the rules reflect the modern economy, including e-commerce?

Answer: The WTO negotiating function has failed to keep pace with changes in the global economy. WTO rules need to be updated to reflect developments that have unfolded over the past quarter-century, particularly in the digital economy. If confirmed, I commit to work with like-minded partners to ensure that any new rules are high-standard ones that reflect the Build Back Better agenda.

What reforms would the Biden Administration be interested in pursuing to WTO’s Appellate Body?

Answer: Over the years, the Appellate Body has overstepped its authority and erred in interpreting WTO agreements in a number of cases, to the detriment of the United States and other WTO members. In addition, the Appellate Body has failed to follow existing rules created to ensure that disputes are resolved in a timely manner. If confirmed, I commit to seeking a comprehensive range of reforms to address these shortcomings.

Do you think China should be accorded developing country status at the WTO?

Answer: If the WTO is going to succeed in promoting equitable economic development, it is critical that the institution rethink the ability of countries to self-select developing country status. The rules for special and differential treatment should be reserved for those countries whose development indicators and global competitiveness actually warrant such flexibilities; they should not be abused by countries that are already major trading powers.

“Question 7:

“The European Union is in the process of implementing legislation that will impose new EU antibiotic use restrictions on producers of animal products that export to the EU, a move that could cause serious disruptions. EU regulators are refusing to take into account relevant data from countries outside the EU or to consider use restrictions already in place in the U.S. and elsewhere, as required under WTO rules.

How do you intend to deal with this type of EU regulatory protectionism?

“Answer: I understand the importance of this issue. If confirmed, I commit to holding our trading partners to their WTO commitments with respect to sanitary and phytosanitary measures, the application of standards and other obligations that impact our agricultural exporters.

Senator Cantwell

“Question 4 – Boeing-Airbus Dispute/Europe:

“Aerospace has been a leading U.S. export for many years. The future of aerospace matters to U.S. jobs. There are more than 100,000 aerospace jobs in Washington state and before the pandemic there were even more.

“In 2006, the United States brought a case at the World Trade Organization (WTO) because Europe provided $22 billion in illegal subsidies for the development of Airbus commercial aircraft (A350 and A380).

“The Europeans countered with a case against the United States. The WTO ruled for the United States in 2012 and 2016 and for the EU in 2019. As a result of the WTO cases, the United States imposed WTO-approved tariffs of up to 25% on a range of products including European aircraft, wine and spirits, and dairy. The European Union still imposed tariffs of up to 25% on U.S. aircraft and a range of agricultural products including Pacific salmon, wine, wheat, and berries.

“The EU has kept sanctions in place even though in March 2020 Washington State repealed the tax provision that the WTO found to be out of compliance. Last year, the Trump administration failed to reach an agreement with the Europeans on commercial aircraft subsidies that would finally end the dispute and the tariffs.

“As it seeks to rebuild the transatlantic alliance, the Biden administration has a real opportunity to resolve this dispute, finally end harmful Airbus subsidies, and establish a level playing field for America’s aerospace industry.

Will you prioritize reaching an agreement on commercial aircraft subsidies to end European and U.S. tariffs and finally end the Boeing Airbus dispute?

Answer: The Boeing/Airbus WTO litigation has been ongoing for more than 15 years. If confirmed, I will make it a priority to resolve this long-running dispute in a way that ensures Boeing and its workers can compete on a level playing field.

Do you anticipate reaching separate agreements with the United Kingdom and the European Union?

Answer: The United Kingdom left the European Union on January 31, 2020. If confirmed, I look forward to working with the United Kingdom on a range of trade issues, including the disputes regarding Boeing and Airbus.

Will you commit to resolving the Boeing-Airbus dispute and tariffs prior to finalizing any U.S. – EU Trade Agreement or U.S. – United Kingdom Trade Agreement?

Answer: If confirmed, I will make it a priority to resolve this long-running dispute in a way that ensures Boeing and its workers can compete on a level playing field. I commit to working with Members of Congress on trade priorities with the European Union and the United Kingdom.

“Question 5 – Digital Trade/Europe:

* * *

What steps will you take to cooperate with Europe on addressing intellectual property and market access challenges in China?

Answer: While there are differences between the U.S. and the EU on some important issues, the U.S. and the EU share broad concerns about China’s unfair practices, including policies that in practice condition market access on technology transfer. It is a priority of the Biden Administration to work with our allies, including our European allies, to address the many challenges posed by China.

Will you re-engage on the WTO negotiations on e-commerce and will you make it a priority?

Answer: The WTO negotiating function has failed to keep pace with changes in the global economy. WTO rules need to be updated to reflect developments that have unfolded over the past quarter-century, particularly in the digital economy. If confirmed, I commit to work with like-minded partners to ensure that any new rules reflect the values of the Build Back Better agenda.

“Question 6 – Environmental Goods:

“Climate Change is a global challenge that no nation can solve on their own. For this reason, I appreciate President Biden rejoining the Paris Agreement so the U.S. can resume its role as a leader in reducing the world’s dangerous levels of carbon pollution.
Being part of the global solution on climate will also help ensure the U.S. has access to a rapidly growing trillion-dollar annual market that could create thousands of high-wage trade and manufacturing jobs in Washington state.

“But that market opportunity is currently constrained by a variety of tariffs that make environmental goods and services more expensive and less accessible then they should be, especially in the developing world where most future carbon pollution will come from.

“That’s why I think it’s imperative that we work to make it easier for all countries to adopt lower carbon technologies. Examples include goods and services that address air pollution control, renewable energy, water and waste management, environmental monitoring, and carbon capture and storage technologies.

“Ideally with America being the ones manufacturing and selling those technologies to the rest of the world.

“In 2001, the Doha Ministerial Declaration directed WTO members to negotiate the elimination of tariffs on environmental goods. In 2014 the U.S. and its global trading partners began negotiations on an Environmental Goods Agreement (EGA) under the WTO with the goal of eliminating tariffs on environmental products and services. That was a big deal, because the 46 WTO members negotiating that Agreement account for 90% of environmental goods traded worldwide. Unfortunately, discussions stalled in 2016 and were not pursued by the last Administration.

Ms. Tai, do you support the goals of the Environmental Goods Agreement?

Answer: Combatting climate change and developing green enterprises and jobs are key priorities for the Biden-Harris Administration. In July 2014, the United States and 13 additional Members of the World Trade Organization (WTO) officially launched negotiations on the proposed Environmental Goods Agreement (EGA) to eliminate tariffs on green technologies. If confirmed, I will pursue a trade agenda that supports the Biden Administration’s comprehensive vision of reducing greenhouse gas emissions and achieving net-zero global emissions by 2050, or before, by fostering U.S. innovation and production of climate-related technology and promoting resilient renewable energy supply chains.

As U.S. Trade Representative, will you seek to restart negotiations on this vital pact that could make the products we need to combat climate change cheaper and more accessible worldwide?

Answer: If confirmed, I will seek stakeholder input on the EGA and evaluate the agreement for its consistency with the Build Back Better agenda and its potential contribution to the Biden-Harris Administration’s goal of achieving net-zero global emissions by 2050.

Will you commit to looking into existing tariff levels with other WTO members to determine which countries have tariffs on environmental goods that differ or exceed corresponding US tariffs? And will you share that analysis with the members of this Committee?

Answer: If confirmed, I commit to working closely with you to identify barriers to reciprocal market access for U.S. producers of environmental goods.

Senator Cornyn

“Question 1:

“Since June 2018, certain American spirits exports to the EU and UK have faced a 25% tariff in response to the U.S. imposition of tariffs on steel and aluminum, and in connection with the WTO dispute concerning Boeing. Absent a resolution to the steel tariffs, the EU’s tariff on American Whiskey will automatically double to 50% in June. The U.S. has imposed a 25% tariff on certain EU and UK wines and spirits imports since October 2019 in connection with the WTO Airbus dispute. The negative impact of these tariffs are being felt across the U.S. from farmers, to suppliers, retailers, and the hospitality sector.

Will you commit to taking these views into account?

What is the Administration’s plan to negotiate resolutions to the various trade disputes with the EU and UK to ensure that these tariffs are quickly removed?

Answer: The purpose of WTO dispute resolution process is to ensure that other countries play by the rules so that our businesses, workers, farmers and ranchers can compete on a level playing field. Tariffs may be a tool to achieve these ends, but they are not the goal. The Boeing/Airbus WTO litigation has been ongoing for more than 15 years. If confirmed, I will make it a priority to resolve this long-running dispute in a way that ensures Boeing and its workers can compete on a level playing field and that takes into account all affected stakeholders.

“Question 8:

“The Biden Administration has announced its intention to increase government procurement of domestically manufactured goods and services. At the same time, the United States is a party to the WTO Government Procurement Agreement (GPA), which limits the United States’ ability to apply robust Buy America requirements to government procurement. Some have proposed suspending U.S. obligations under the GPA on a temporary, emergency basis to shore up critical domestic supply chains and spur economic recovery in the wake of the COVID pandemic.

What are your thoughts on such a concept?

Answer: It is the policy of the Biden-Harris Administration that the United States should seek to maximize the use of goods made in the United States for federal procurement and financial assistance awards, consistent with applicable law. If confirmed, I will work to ensure that our trade policy supports this goal.

Should the U.S. renegotiate any of its U.S. GPA commitments to ensure that the Administration can achieve its “Buy America” objectives?

Answer: As a part of its review of the implementation and efficacy of laws, regulations, and policies related to federal procurement, the United States should also examine procurements made under our trade agreement obligations to ensure that they serve the interests of the United States, its businesses and workers. If confirmed, I commit to undertake this review.

“Question 9:

“Both the Obama and Trump Administrations recognized the existence of serious deficiencies in the WTO dispute settlement process. WTO members have used the dispute settlement process to achieve what they could not achieve in negotiations, including the severe weakening of antidumping and countervailing duty laws. In addition, the Appellate Body has repeatedly failed to address China’s dangerous combination of government subsidies, state-owned enterprises and distortive non-market behavior. The United States needs to engage in serious and meaningful negotiations to resolve these issues prior to considering any reestablishment of the Appellate Body.

What are your plans for addressing the serious deficiencies in the WTO’s dispute settlement process?

Do you agree that the Appellate Body should not be revived until these problems are fully addressed?

Answer: If confirmed, I will re-engage like-minded partners who similarly recognize the importance and necessity of reform of the WTO, including its dispute settlement process. This will be difficult work, but I remain hopeful that with proper U.S. leadership, we can achieve the necessary reform that resolves our long-standing, bipartisan concerns.

“Question 10:

“Domestically produced steel is among the cleanest in the world.

How do you plan to ensure that the WTO cannot block or weaken the administration’s efforts to promote and expand markets for domestically produced steel?

Answer: If confirmed, I commit to examining any potential barriers to the expanding the exportation of domestically produced steel, including at the WTO, and working with Congress to address those barriers.

Senator Portman

“Question 3:

“In Choruses from the Rock, T.S. Elliot wrote of creating ‘a system so perfect that no one will need to be good.’ That sentiment might also be applied to the World Trade Organization (WTO), which despite having clear, agreed upon rules has found itself drifting from the obvious meaning of those rules. For systems, or organizations, to be sustainable they need active engagement and not just passive reliance on their underlying institutional architecture. One of the dilemmas facing the WTO reform agenda is the fact that the existing rules are quite clear, and yet the development of new rules may suffer from the same jurisprudential drift as the existing rules have.

Aside from tacking on a clause that says ‘and we mean it’ to a number of provisions in the WTO agreements, how do you believe new rules should be written to avoid the pitfalls that the United States has seen with respect to Appellate Body activism? And what mechanisms, if any, should be created to ensure that those who interpret such agreements remain faithful to the text of the agreement and neither expand or diminish obligations created by the agreement?

Answer: Over the years, the Appellate Body has overstepped its authority and erred in interpreting WTO agreements in a number of cases, to the detriment of the United States and other WTO members. In addition, the Appellate Body has failed to follow existing rules created to ensure that disputes are resolved in a timely manner. Reforms are needed to ensure that the underlying causes of such problems do not resurface and that the Appellate Body does not diminish the rights and obligations of WTO members.

“Question 4:

“The previous two administration have, on a bipartisan basis, blocked appointments to the Appellate Body (AB) of the World Trade Organization (WTO) over concerns about AB activism. Restoring the AB without addressing the underlying issues that sparked U.S. concerns would likely not be a sustainable solution to the problem of AB overreach.

How do you intend to approach issues related to the stalled AB? Do you believe that resuscitating the AB should come with reforms to guard against future overreach? What might some of those reforms be?

Answer: Yes, it is absolutely critical that any solution to the existing impasse be one that seeks to address the underlying problems, including longstanding concerns of overreach and jurisprudential drift. If confirmed, I will seek to work with other countries that share U.S. concerns about WTO dispute settlement to craft reforms to guard against such problems re-emerging in the future.

“Question 5:

“Last summer I introduced a bipartisan resolution, which articulated some proposed reforms to the World Trade Organization (WTO). One of those solutions is to pursue more plurilateral agreements without Most Favored Nation (MFN) requirements. This would allow the United States to pursue trade opening opportunities with like-minded nations while preventing those not party to the agreement from benefiting.

Do you agree about the value of non-MFN plurilaterals? If confirmed, do you intend to explore such arrangements with like-minded countries?

Answer: Given the negotiating challenges that the WTO has encountered in recent years, I agree that non-MFN plurilaterals need to be explored as a possible path forward. If confirmed, I commit to exploring the possibility of such arrangements with like-minded countries. Developing countries are hesitant to accept them, however, and getting these arrangements accepted within the WTO will not be easy.

“Question 21:

“For roughly the past two and a half years, the European Union (EU) and the United Kingdom (UK) have levied a 25 percent tariff on American whiskey imports in response to the United States’ Section 232 tariffs. These tariffs are set to double to 50 percent in June 2021. At the same time, the United States has imposed a 25 percent tariff on certain wine and spirit imports from the EU and UK in connection to the Boeing-Airbus dispute

How do you propose to solve the Boeing-Airbus dispute in order to ensure WTO compliance by the EU, while prioritizing the removal of tariffs on products such as American whiskey subject to 232 retaliation?

Answer: The purpose of WTO dispute resolution process is to ensure that other countries play by the rules so that our businesses, workers, farmers and ranchers can compete on a level playing field. Tariffs may be a tool to achieve these ends, but they are not the goal. The focus must be on the resolution of the issue that has been found to impact our industry and workers. If confirmed, I will make it a priority to review the status of this long-term dispute and seek a resolution that finally addresses the unfair practices found through the WTO process that disadvantage U.S. industry and workers.

“Question 22:

“The United Kingdom (UK) is no longer a member of the European Union. Yet, the UK continues to face Airbus-related tariffs. Since the UK cannot advocate for policy change in Brussels on this issue, and as a gesture of goodwill in the interest of bringing our countries closer together, these tariffs on the UK should be removed.

Do you believe that these tariffs should be removed from the UK?

Answer: The Boeing/Airbus WTO litigation has been ongoing for more than 15 years. If confirmed, I will make it a priority to resolve this long-running dispute in a way that ensures Boeing and its workers can compete on a level playing field.

“Question 23:

“Wheels of Jarlsberg cheese are produced in Ireland by a Norwegian company. These wheels are subject to a 25 percent tariff as a result of the Boeing-Airbus dispute. The same company makes loaves of Jarlsberg cheese in Ohio. The tariff on the wheels threatens the entire company and therefore the U.S. production of loaves. The last six-month statutory review of these tariffs did not benefit from public input, therefore did not account for the impacts on Jarlsberg cheese.

When do you plan to review the items that are subject to Boeing-Airbus tariffs, and will you seek public input? How will you decide what stays on the tariff list and what is removed?

Answer: If confirmed, I will work to make sure our trade enforcement actions consider the impact of tariffs on U.S. businesses and workers. When action taken under the Section 301 process leads to the imposition of tariffs on certain imports, USTR requests public input through a notice and comment period. This statutorily required practice will continue if I am confirmed as U.S. Trade Representative.

“Question 31:

“The World Trade Organization’s Government Procurement Agreement (GPA) opens up parts of the U.S. procurement market to other countries. Yet, the GPA is also a uniquely helpful model for bringing like-minded allies together on a plurilateral basis. In this way, the GPA can be both a limiting and empowering factor when it comes to restoring the resiliency of our supply chains.

To what extent do you intend to pursue changes to U.S. GPA commitments as part of the administration’s broader Buy American agenda?

Answer: It is the policy of the Biden-Harris Administration that the United States should seek to maximize the use of goods made in the United States for federal procurement and financial assistance awards, consistent with applicable law. As a part of its review of the implementation and efficacy of laws, regulations, and policies related to federal procurement, the United States should also examine procurements made under our trade agreement obligations to ensure that they serve the interests of the United States, its businesses and workers. If confirmed, I commit to undertaking this review.

“Question 32:

“In May 2020, President Trump signed an Executive Order directing the Food and Drug Administration (FDA) to identify essential medical countermeasures and require the U.S. Trade Representative (USTR) to withdraw coverage under U.S. trade agreements for these products. USTR has since notified the Government Procurement Agreement (GPA) Committee and our trade agreement partners of the intent to withdraw coverage for these medical countermeasures. This drew objections from some of our trading partners.

Do you intend to pursue this withdrawal of coverage?

Answer: As part of a review of whether our trade agreement obligations serve the interests of the United States, if confirmed, I will review the action taken to withdraw coverage of certain essential medical countermeasures from the Government Procurement Agreement and our trade agreements.

“Question 37:

“In 2018, China began to indulge protectionist impulses with respect to imports of certain waste and scrap paper. Just the other month, China banned imports of recovered paper. As you know, the United States has raised with China the inconsistency of China’s import restrictions on recyclable materials with World Trade Organization (WTO) rules. These new restrictions seem to likely to further constitute a violation of those rules.

Will you commit to looking into these new import restrictions on recycled paper, and work with domestic industry who has been affected by these restrictions? Do you see an opportunity to include these import restrictions on paper within the scope of any future negotiations with China?

Answer: If confirmed, I commit to engaging in a review of how trade policy can advance the development of the circular economy. As part of that process, I will engage in close consultations with domestic industry and Congress. Given the importance of China to these discussions at the global level, I would hope that China would be interested in active discussions with the U.S. on this matter.

Senator Brown

“Question 4 – World Trade Organization:

“As was discussed during Thursday’s hearing, many agree that it is past time for World Trade Organization (WTO) reform to ensure that both dispute settlement panels and the Appellate Body are not used as a venue for foreign governments and competitors to subvert the will of Congress and perpetuate unfair trade practices.

If confirmed, how will you approach WTO reform and how will you ensure that U.S. trade laws remain effective and are not weakened as a result of WTO dispute settlement proceedings?

Answer: If confirmed, I will work to re-engage with like-minded partners who similarly recognize the importance and necessity of reform of the WTO. Since the founding of the General Agreement on Tariffs and Trade (GATT) in 1947, U.S. leadership has been critical at every juncture when the global trade system has required a major updating. This will be difficult work that may take some time, but I remain hopeful that with proper U.S. leadership, we can achieve the necessary reforms. This includes reforming WTO dispute settlement to prevent diminishing the rights and obligations of countries to use their trade remedy laws to counteract unfair trade practices.

Senator Bennet

“Question 8:

“The Airbus/Boeing dispute tariffs are significantly affecting the Colorado small businesses. Restaurants in particular, which are already struggling due to the pandemic, are facing substantial costs on European food, wine, and spirits.

If nominated, what will be your first steps regarding the EU Airbus/Boeing dispute?

Answer: If confirmed, I will make it a priority to review the status of these long-term disputes and seek a resolution that finally addresses the unfair practices found through the WTO process that disadvantage U.S. industry and workers.

Will you work with a wide range of interests to understand the tariffs’ impacts on their industries, including restaurants?

Answer: The purpose of the dispute resolution process is to ensure that other countries play by the rules so that our businesses, workers, farmers and ranchers can compete on a level playing field. Tariffs may be a tool to achieve these ends, but they are not the goal. The focus must be on the resolution of the issue that has been found to impact our industry and workers. If confirmed, I will ensure that our trade enforcement actions consider the impact of tariffs on U.S. businesses and workers.

Senator Cassidy

“Question 4 – Sugar – WTO Quota Allocation Methodology:

“There have been indications over the past year or so that USTR and USDA are considering revising the methodology used by the United States to allocate our WTO sugar quota. This quota has traditionally been allocated in varying amounts to 40 countries based on a longstanding formula, with reallocations being carried out later in the fiscal year to account for nonperformance. While it is understood there may be some inefficiencies built into the current methodology, there are also elements to the arrangement that benefit the overall operation of existing sugar policy.

Can you provide your assurance that USTR will engage in thorough consultations with both USDA program managers and industry stakeholders regarding potential changes to the existing allocation process before any such changes are instituted?

Answer: If confirmed, I commit to consulting with USDA program managers and industry stakeholders before any changes to the current allocation process take place.

“Question 5 – Spirits:

“Since June 2018, certain American spirits exports to the EU and UK have faced a 25% tariff in response to the U.S. imposition of tariffs on steel and aluminum, and in connection with the WTO dispute concerning Boeing. Absent a resolution to the steel tariffs, the EU’s tariff on American Whiskey will automatically double to 50% in June. The U.S. has imposed a 25% tariff on certain EU and UK wines and spirits imports since October 2019 in connection with the WTO Airbus dispute. The negative impact of these tariffs are being felt across the U.S. from farmers, to suppliers, retailers, and the hospitality sector.

What are your thoughts on how this situation can be improved?

Answer: The purpose of the WTO dispute resolution process is to ensure that other countries play by the rules so that our businesses, workers, farmers and ranchers can compete on a level playing field. Tariffs may be a tool to achieve these ends, but they are not the goal. The focus must be on resolving the issue that has harmed has our industry and workers. If confirmed, I will make it a priority to review the status of these long-term disputes and evaluate the use of tariffs, including their impact on unrelated industries, to ensure U.S. trade tools maximize the benefit and minimize the cost for U.S. industries, workers, and consumers.

Senator Daines

“Question 4:

“As you know, many agricultural commodities have been targeted by the European Union with retaliatory tariffs due to disputes over Boeing/Airbus and other issues. In particular, Hard Red Spring wheat has been harmed by WTO sanctioned punitive tariffs on U.S. grown non-durum wheat. Until the Airbus/Boeing dispute is resolved, or the tariffs are lifted in negotiations, U.S. wheat growers will be at a disadvantage in the marketplace relative to competitors in Canada and elsewhere.

What steps can be taken to find a negotiated solution and put the respective tariffs on hold?

Other agriculture commodities have been impacted as well. Will you commit to working to lift these retaliatory tariffs?

Answer: The purpose of WTO dispute resolution process is to ensure that other countries play by the rules so that our businesses, workers, farmers and ranchers can compete on a level playing field. Tariffs may be a tool to achieve these ends, but they are not the goal. The Boeing/Airbus WTO litigation has been ongoing for more than 15 years. If confirmed, I will make it a priority to resolve this long-running dispute in a way that ensures Boeing and its workers can compete on a level playing field and that takes into account all affected stakeholders.

Senator Warren

“Question 1:

“The Covid-19 pandemic has been the worst public health crisis facing our nation and the world in over a century. Now that safe and effective vaccines are available, it is vital that all people around the world have access to vaccines and any future treatments for Covid-19. Unfortunately, the Trump administration put the profits of pharmaceutical manufacturers ahead of global public health. Too many people in low- and middle-income countries may have to wait years to get vaccinated because of the high prices being charged for Covid-19 vaccines, and an insufficient supply that is currently being bought up disproportionately by wealthy nations. No one should die because drug company profits are prioritized over the health and wellbeing of human beings.

“Countries that can manufacture pharmaceuticals should be given the opportunity to produce Covid-19 vaccines and treatments as quickly as possible in order to bolster global supplies and ensure equitable distribution. In October, South Africa and India proposed a temporary waiver of the WTO’s Trade-Related Intellectual Property Rights (TRIPS) agreement, to increase the global supply of COVID vaccines and treatments and save lives throughout the world. That proposal is now supported by a large number of low and middle income countries. Under the Trump administration, the United States was one of the wealthy nations working to block this emergency waiver.

Will you as United States Trade Representative reverse the Trump-era decision that is putting lives at risk, and instead support the TRIPS waiver so that Covid-19 vaccines and medications can be made widely available in low and middle-income countries?

Answer: Responding to the COVID-19 pandemic is the top priority of the Biden Administration. I recognize the critical importance of ensuring widespread access to life-saving vaccines, diagnostics, therapeutics, treatments, and other key products worldwide in order to counter the pandemic and enable global economic recovery. If confirmed, I commit to examining the TRIPS waiver proposal thoroughly to determine its efficacy in enhancing our global health security and saving lives.

“Senator Barrasso

“Question 4 – Sugar:

“The current world sugar market is highly dysfunctional, driven by production and trade distorting practices employed by nearly all sugar-producing countries.

“It is more important than ever that the United States maintain its current no-cost sugar policy which provides a stable and predictable economic environment for U.S. producers, an environment necessary for capital investments and long-run sustainability.

“How would you envision taking on a multilateral challenge like the reform of the global sugar market, and

Answer: If confirmed, any reforms I pursue regarding the global sugar market will be consistent with maintaining the current no-cost U.S. sugar policy.

Do you think the World Trade Organization (WTO) is equipped now, or can be made equipped going forward, to effectively address the underlying issues among all members?

Answer: WTO rules need to be updated to reflect long-standing agricultural issues that have not been rectified under the WTO’s current construction. If confirmed, I will work with like-minded partners to ensure that any new rules are consistent with U.S. domestic sugar goals.

The full set of questions and answers is embedded below.

USTR-nominee-answers-to-written-questions

Excerpts from USTR’s 2021 Trade Policy Agenda and 2020 Annual Report of the President of the United States on the Trade Agreements Program

The section of the 2021 Trade Policy Agenda dealing with “partnering with friends and allies” is copied below. However, other priorities correspond with priorities for major trading partners like the EU and with the priorities identified by the WTO’s Director-General Ngozi Okonjo-Iweala, including dealing with the COVID-19 pandemic and recovery, having trade play a role in addressing climate change, addressing China’s many trade distortive practices and more.

Partnering with Friends and Allies

The Biden Administration will seek to repair partnerships and alliances and restore U.S. leadership around the world. The Biden Administration will reengage and be a leader in international organizations, including the World Trade Organization (WTO). The United States will work with Director-General Ngozi Okonjo-Iweala and like-minded trading partners to implement necessary reforms to the WTO’s substantive rules and procedures to address the challenges facing the global trading system, including growing inequality, digital transformation, and impediments to small business trade. The Biden Administration will also work with allies and like-minded trading partners to establish high-standard global rules to govern the digital economy, in line with our shared democratic values.

“The Biden Administration will also coordinate with friends and allies to pressure the Chinese Government to end its unfair trade practices and to hold China accountable, including for the extensive human rights abuses perpetrated by its state-sanctioned forced labor program. In addition, the trade agenda will seek to collaborate with friends and allies to address global market distortions created by industrial overcapacity in sectors ranging from steel and aluminum to fiber optics, solar, and other sectors to which the Chinese Government has been a key contributor.”

The complete publication from USTR is embedded below.

USTR-2021-trade-policy-agenda-and-2020-annual-report

Conclusion

President Biden’s nominee for U.S. Trade Representative is likely to be confirmed in the coming days after being voted out of the Senate Finance Committee tomorrow. Her confirmation hearing before the Committee and responses to questions asked cover a very wide array of topics. But a significant number pertain to WTO reform including addressing distortions flowing from China’s state capital system and changing special and differential treatment away from self-selection, addressing the problems of the Appellate Body reviewed by prior Administrations including the overreach problem, working to resolve long running disputes (US-EU on Airbus-Boeing), getting results in the e-commerce/digital trade plurilateral negotiations, addressing the growing conflict over digital services taxes (although likely through the OECD/G20 process) and other issues. Her answers are consistent with the 2021 Trade Policy Agenda released by USTR yesterday and show strong interest in using trade policy to help address the COVID-19 pandemic and restore global economic growth, addressing the existential threat from a warming planet and other Biden Administration priorities. The Biden Administration, and Ms. Tai as the next USTR, will work with trading partners in the WTO to help restore relevance and hopefully create rules for the 21st century. Both the answers to questions and the 2021 Trade Policy Agenda should be good news for our trading partners looking at the future of multilateralism.

WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting

Dr. Ngozi Okonjo-Iweala took the helm of the WTO today, March 1, as Director-General and outlined at the beginning of the first day of a two day General Council meeting the need for change at the organization and how Members address the many challenges before them. In a post last week, I had looked at some of the challenging issues confronting the WTO and the new Director-General (DG), some within the General Council agenda. See February 26, 2021, WTO Director-General Ngozi Okonjo-Iweala’s first week on the job starts with a two day General Council meeting, https://currentthoughtsontrade.com/2021/02/26/wto-director-general-ngozi-okonjo-iwealas-first-week-on-the-job-starts-with-a-two-day-general-council-meeting/.

The statement by DG Okonjo-Iweala can be found on the WTO webpage. See WTO, DG Okonjo-Iweala: WTO can deliver results if members “accept we can do things differently”, 1 March 2021, https://www.wto.org/english/news_e/spno_e/spno1_e.htm. Her comments started with thanks to the Members, to the troika of Chairs that had worked the DG selection process, to the four Deputy Directors-General who had managed the organization since the end of August and to the WTO Secretariat staff. Dr. Okonjo-Iweala reviewed the need for doing things differently, the fact that in a Member driven-organization, movement would require efforts by all, and her view based on discussions that the WTO was viewed as less relevant since it has been unable to deliver results. Her comments on the challenges to relevance are copied below.

“I have said it. It cannot be business as usual. We have to change our approach from debate and rounds of questions to delivering results. Excellencies, many of you put in long hours and a great deal of effort to do good work much of which goes unnoticed. There are excellent people in the capitals doing good work. We have talented staff in the Secretariat. But the world is no longer cognizant of this, does not recognize the effort because we are not delivering results at the pace required by our fast-changing environment. Last week at the TNC, several Ambassadors said that You Excellencies talk past each other. You don’t talk to each other. This approach has to change. We have to be more accountable to the people we came here to serve — the ordinary women and men, our children who hope that our work here to support the MTS, will result in meaningful change in their lives, will improve their standard of living, and create decent jobs for those who seek work.

“Excellencies, coming from the outside I have noticed that the world is leaving the WTO behind. Leaders and decision makers are impatient for change. Several Trade Ministers said to me that if things don’t change, they will no longer attend the Ministerial because it is a waste of their time. I have noticed that more and more of the work and decision making that should be undertaken at the WTO is being done elsewhere because there is an increasing loss of confidence in the ability of the WTO to produce results. But there is hope. If we all accept that we can no longer do business as usual, that will help us create the parameters for success.”

DG Okonjo-Iweala then reviewed the long list of issues of importance to various parts of the WTO Membership and the need to achieve deliverables by the 12th Ministerial Conference. After her speech, the date and venue of the 12th Ministerial Conference were taken up as agenda item 4 and a decision taken to hold the Ministerial Conference the week of November 29 in Geneva with the Kazakhstan trade minister chairing the Ministerial Conference (Kazkhstan had offered to host in 2020 and again in 2021 including in December). See WTO, Twelfth Ministerial Conference to take place in Geneva in late 2021, 1 March 2021, https://www.wto.org/english/news_e/news21_e/minis_01mar21_e.htm.

For DG Okonjo-Iweala it is important that the WTO membership have an achievable agenda for the upcoming Ministerial Conference (MC), which means not attempting too much. However, the list of “deliverables” DG Okonjo-Iweala outlined is significant as well as the group of issues on which agreed work programs should be ready for adoption at the MC. Here is what DG Okonjo-Iweala outlined as the hoped-for focus.

“Therefore, we must work hard to complete a few deliverables before MC12 so that Ministers can focus on ratifying agreements and agreeing best methods for implementation. In this regard, we need to prioritize action on COVID-19 both for the immediate and longer term and focus on completing Fisheries Subsidies negotiations before the middle of the year. We must agree the road map for reform of the Dispute Settlement System and prepare a work program to achieve this which can be endorsed at MC12. On Agriculture, let us identify a few things we can deliver such as PSH, SSM, Cotton, and the WFP Humanitarian waiver which is material to our Pacific Island economies as we heard a few days ago. We must put forward a subsidies work program both on domestic support and industrial subsidies which can be agreed on at MC12. We must sharpen our approach to SDT bearing in mind how crucial this is to the policy space of Least Developed Countries in particular. For the rest, let us review the work on e-commerce, investment facilitation, Services Domestic Regulation, MSMEs, Women in Trade, and Trade and Climate to see what aspects of these important work programs we can advance at MC12. So in short, I am suggesting three or four clear deliverables finalized before MC12 and work programs for the rest to be agreed at MC12.”

DG Okonjo-Iweala then turned to the challenges of the COVID-19 pandemic, more specifically getting the world vaccinated. She noted the proposal by India and South Africa (supported by many developing countries) for a waiver from TRIPS obligations for medical goods during the pandemic. A status report from the TRIPS Council on the proposed waiver is agenda item 6. DG Okonjo-Iweala argues that time is of the essence and that while WTO Members deal with the waiver proposal, efforts should be made to ramp up global production and distribution, noting the challenges facing COVAX in delivering vaccines to low- and middle-income countries and the gross shortfall between global vaccine capacities and global vaccine needs. It is not clear what direct role the WTO has or should have in working with companies to expand production or to encourage additional licensing, but certainly there is a role for governments collaborating on the issue and for multilateral organizations to collaborate and develop information on current and planned capacities, existing licensing arrangements (as there are some in existence already). Here is what DG Okonjo-Iweala said.

“Permit me Ladies and Gentlemen to spend just a little time on COVID-19. We have a demand for a TRIPS waiver by a growing number of developing countries and the dialogue is intensifying. Whilst this is happening, I propose that we ‘walk and chew gum’ by also focusing on the immediate needs of dozens of poor countries that have yet to vaccinate a single person. People are dying in poor countries. We just had our first COVAX shipment to Ghana last week and others will follow but it will not be enough. There is serious supply scarcity and some countries are out bidding COVAX and diverting supplies. The world has a normal capacity of production of 3.5 billion doses of vaccines and we now seek to manufacture 10 billion doses. This is just very difficult, so we must focus on working with companies to open up and license more viable manufacturing sites now in emerging markets and developing countries. We must get them to work with us on know how and technology transfer now. There will soon be a world manufacturing convention where we can seek to build this partnership. I also hope we can initiate a dialogue and information exchange between us and representatives of manufacturers associations from developing and developed countries. Excellencies, this should happen soon so we can save lives. As I said at the beginning, this will be an interim solution whilst we continue the dialogue on the TRIPS waiver.”

The General Council meeting runs through tomorrow March 2. While much of a General Council meeting is simply reporting developments in various areas, it is also an opportunity for Members to stake out positions and measure the sense of openness to agenda items by the WTO membership. There is no doubt that WTO Members expressed great enthusiasm and hope for the new Director-General. Whether that will translate into Members working differently to obtain solutions and find compromises is unknown at this point but seems unlikely with the deep divisions and differences of views on objectives for the WTO held by Members. The new DG clearly will be pushing Members to proceed in a more collaborative and solution-finding mode. Her own list of objectives for MC12 is quite ambitious and includes items that are very controversial to many. Her wanting WTO involvement in considering vaccine production and distribution levels is more consistent with her prior role at GAVI and her background as a development economist than her current role as WTO DG. Finding a comfort zone for WTO Members to act within the WTO, other than the consideration of the waiver proposal, on such issues may prove to be challenging. What is clear is that the new DG is looking forward to working with Members to return the WTO to greater relevance. Her opening statement at the General Council meeting says she will be urging Members to get out of their comfort zones. Fingers crossed that she is successful.

INTELLECTUAL PROPERTY AND INNOVATION: MAKING MSMES COMPETITIVE IN GREEN TECH

Climate change is a major global concern. Indeed, the UN has indicated there is less than a year for countries to get serious about saving the planet by getting their updated national climate action plans (NDCs) submitted. See Time, ‘If This Task Was Urgent Before, It’s Crucial Now.’ U.N. Says World Has 10 Months to Get Serious on Climate Goals, February 26, 2021,https://time.com/5942546/un-emissions-targets-climate-change/; UN Climate Change, Greater Climate Ambition Urged as Initial NDC Synthesis Report Is Published, 26 February 2021, https://unfccc.int/news/greater-climate-ambition-urged-as-initial-ndc-synthesis-report-is-published (“’2021 is a make or break year to confront the global climate emergency. The science is clear, to limit global temperature rise to 1.5C, we must cut global emissions by 45% by 2030 from 2010 levels.  Today’s interim report from the UNFCCC is a red alert for our planet. It shows governments are nowhere close to the level of ambition needed to limit climate change to 1.5 degrees and meet the goals of the Paris Agreement. The major emitters must step up with much more ambitious emissions reductions targets for 2030 in their Nationally Determined Contributions well before the November UN Climate Conference in Glasgow,’ said UN Secretary-General António Guterres.”).

While the largest polluters — China and the United States — haven’t submitted updated NDCs, the Biden Administration is planning on hosting a climate summit in the summer and plans on having more ambitious plans for the U.S. prepared by that time. See Roadmap for a Renewed U.S.-Canada Partnership, February 23, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/02/23/roadmap-for-a-renewed-u-s-canada-partnership/ (“The Prime Minister and the President expressed their commitment to have their two countries work together on cooperative action ahead of the US-hosted Leaders’ Climate Summit that will allow both countries to increase their climate ambition. The President, in addition to acknowledging Canada’s new strengthened national climate plan and its globally ambitious price on pollution, reiterated his aim to have ready the US nationally determined contribution (NDC) in advance of the Summit and welcomed the Prime Minister’s aim to announce the enhanced 2030 emissions target for its NDC by the Summit as well.”).

At the World Trade Organization, many countries are anxious to explore ways that trade can facilitate addressing the challenges from climate change. Because of the large share of employment around the world by micro-, small- and medium’sized businesses (MSMEs), such businesses are playing and will have to play a critical role in adopting technologies to permit reduction of pollutions threatening the planet.

On February 25, 2021 a group of WTO Members (largely developed countries) submitted a communication to the WTO membership outlining ways that MSMEs can use intellectual property to green their businesses. See INTELLECTUAL PROPERTY AND INNOVATION: MAKING MSMES COMPETITIVE IN GREEN TECH, COMMUNICATION FROM AUSTRALIA, CANADA, CHILE, THE EUROPEAN UNION, JAPAN, SINGAPORE, SWITZERLAND, THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU, THE UNITED KINGDOM AND THE UNITED STATES, IP/C/W/675 (26 February 2021). The paper lays out the purpose of the communication in its introduction copied below.

“1. Some of today’s critical global challenges include climate change, biodiversity loss, environmental degradation and food security. As an example, climate change matters to our health and increases the risk of infections and pandemics.1

“2. Several international efforts such as the Sustainable Development Goals (SDGs), the Convention on Biological Diversity, the UN Framework Convention on Climate Change and the Paris Agreement are designed to address these challenges. In this context, the role of Green Technology2 is important to provide new alternatives to address these challenges and create opportunities that have economic, social, and environmental benefits, as underscored by the framework of the SDGs. Of these, several underline the importance of Environmentally Sound Technologies (ESTs) for the accomplishment of the above objectives.

“3. Micro-, Small and Medium-sized Enterprises (MSMEs) can play a pivotal role in this change towards more sustainability. As they provide for more than 50 percent of employment (G20/OECD, 2015), they can constitute core engines of innovation and growth. MSMEs working in the green tech sector represent key economic actors in the effort towards finding solutions to address the abovementioned global challenges. The role of intellectual property rights (IPRs) to enhance the competitiveness of MSMEs should be looked at closely. IPRs enhance the dissemination and protection of innovations – which is key for MSMEs, including those in the green tech sector (Friesike, Jamali, Bader et al, 2009). This submission presents IPR approaches for making MSMEs more competitive in green tech.

“1 Harvard T.H Chan School of Public Health: https://www.hsph.harvard.edu/cchange/subtopics/coronavirus-and-climate-change/ (last consulted: 09.01.2021).”

The communication then provides information on international and national approaches to helping SMSEs obtain IP protection and/or obtain through license or otherwise existing IP technologies to address greening their businesses. For example, on international approaches, the communication reviews the role WIPO and WTO play in providing easy access to lots of information on intellectual property systems of many countries. WIPO has set up support through WIPO Green to facilitate collaboration on environmentally sound technologies (ESTs) including what technologies are available for licensing, etc.

“5. One important initiative to accelerate the development and dissemination of ESTs is WIPO GREEN, a marketplace designed to connect providers and seekers of ESTs. All technologies listed in the online database of WIPO GREEN are available for license, collaboration, joint ventures, and sale. In addition to establishing a network of various partners, WIPO GREEN contains a database of IP experts, supports acceleration projects in different countries and produces briefs and seminars for various green tech areas. It is thus particularly valuable for MSMEs, given that it facilitates the diffusion of their technologies and provides information to technology providers and seekers in all countries.”

The communication from the WTO Members also includes information on the Technology Mechanism provided by the United Nations Framework Convention on Climate Change and provides information on classification of green technology patents by WIPO, the European Patent Office (EPO) and US Patent and Trademark Office (USPTO).

On national approaches Members can take, the communication focuses on actions the national patent office can take.

“12. There are several ways for IP offices to assist MSMEs in making the best use of IPRs.

“• IP offices can provide basic guidance and assistance on various IPR aspects. By preparing reader-friendly IP material, including patent and trademark basics, examination overviews, information on patent searching and resources on legal assistance that could be used by inventors and businesses in the green tech sector, individual questions and needs may be met.

“• IP offices may provide support in the form of assisting applicants with patent searches, landscape analyses and also facilitate free legal assistance.

“• Specifically with a view to promoting ESTs, IP offices could consider accelerated patent examination procedures for such green tech patent applications. This process shortens the time between application and grant, enabling MSMEs to attain financial support more quickly.

“• Customized workshops, seminars, or awards for the best green tech inventions may also help to make MSMEs that are involved in the green tech sector more aware of the benefits that the IP system may hold for them.”

The complete communication is embedded below.

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Conclusion

While there are presently limited environmental negotiations going on at the WTO (fisheries subsidies), the global race to address a warming world requires greater focus by WTO Members on the role trade can play to improve the global response. Restarting the environmental goods negotiations is one obvious area for negotiations. Addressing carbon leakage through national laws and international negotiations is another. Encouraging collaboration to spread green technology requires no negotiations but is a potentially important component in the global response. Hence the February 25 communication is a valuable contribution to increasing the global focus on how to address the challenges of a warming planet.

WTO Director-General Ngozi Okonjo-Iweala’s first week on the job starts with a two day General Council meeting

While the WTO’s General Council, in special session, appointed Dr. Ngozi Okonjo-Iweala to be the next Director-General on February 15, 2021, her term starts on Monday, March 1. The challenges facing the WTO membership and the incoming Director-General are many and complex. At the same time, there is a lot of useful work that is done within the WTO including efforts of non-members to join the WTO (accessions).

In speaking to an informal Trade Negotiations Committee and Heads of Delegation meeting on February 25, Deputy Director-General Alan Wolff spoke in part on “The Ngozi Okonjo-Iweala Era”. See WTO, DDG Wolff calls on members to work with new Director-General to reform WTO, 25 February 2021, https://www.wto.org/english/news_e/news21_e/ddgaw_25feb21_e.htm. Part of the section of his statement on the new DG’s era is copied below.

“The Ngozi Okonjo-Iweala Era

“The landmark event of the last six months was the appointment of the new Director-General ten days ago after what turned out to be a lengthy process.  91 member delegations spoke last week to congratulate the new Director-General. The DDGs and the Secretariat join you in welcoming Dr Okonjo-Iweala’s appointment with great enthusiasm.

“Of course, member enthusiasm, optimism and hope need to be translated into concrete action.  

“There is much that needs to be done at this critical juncture for the WTO. World trade must contribute to a more effective pandemic response as well as a strong and sustainable economic recovery. Climate issues are demanding more urgent attention. WTO reform is overdue, having been called for repeatedly by you, by your ministers and by many heads of government. 

“The challenges are many but so are the opportunities. Dr Ngozi’s remarks at the Special General Council meeting last Monday, subsequently circulated to delegations in document JOB/GC/250, presented a worthy and ambitious agenda for the members of this organization.

“What did she say?

“To act with a sense of urgency to assist in controlling the COVID-19 pandemic through the nexus of trade and public health:

“First, by playing a more forceful role in exercising the WTO’s monitoring function. Part of this would involve encouraging members to minimise or remove export restrictions that hinder supply chains for medical goods and equipment. WTO monitoring suggests that as of yesterday, 59 members and 7 observers still had pandemic-related export restrictions or licensing requirements in place, mostly for personal protective equipment, disinfectants and to a lesser extent, for medicines and food. This represents a significant level of rollback compared to the 81 members and 10 observers that had implemented such measures over the past year. A welcome development — but there is much room to improve this record.  

“And second, by broadening access to new vaccines, therapeutics, and diagnostics by facilitating technology transfer within the framework of multilateral rules.

“Beyond these immediate responses to the pandemic, Dr Ngozi set out a number of other, also vitally important, challenges:

“To swiftly conclude the fisheries subsidies negotiations, and thus pass a key test of the WTO’s multilateral credibility while contributing to the sustainability of the world’s oceans.

“To build on the new energy in the multilateral trading system from the joint statement initiatives attracting greater support and interest, including from developing countries.

“To address more broadly the nexus between trade and climate change, using trade to create a green and circular economy, to reactivate and broaden negotiations on environmental goods and services, to take the initiative to address the issue of carbon border adjustments as they may affect trade.

“To level the playing field in agricultural trade though improving market access and dealing with trade distorting domestic support, exempting from export restrictions World Food Programme humanitarian purchases.

“To strengthen disciplines on industrial subsidies, including support for state-owned enterprises. 

“To defuse the divisions over Special and Differential Treatment (SDT).

“And to develop a work programme for restoring two-tier dispute resolution, to be agreed no later than MC12.

“I sense from my discussions with members that you chose this leader, Ngozi Okonjo-Iweala, because she has shown herself during her career to be fearless in the face of daunting challenges — and is experienced in knowing how to work with others to make progress toward solutions. 

“Each of the challenges the WTO faces, I am sure, can be met and overcome.  Echoing Dr Ngozi’s words, the trading system that we inherited, now only three-quarters of a century old, is about people.  This is inscribed in the opening section of the Marrakech agreement: ‘to raise living standards, ensure full employment, increase incomes, expand the production of and trade in goods and services, and seek the optimal use of the world’s resources in accordance with the objective of sustainable development.”’

DDG Wolff’s summation correctly lays out many of the issues needing to be addressed by the WTO membership. The vast majority of the issues are highly controversial among at least some Members.

The first major order of business is a two day General Council meeting on March 1-2 which has several agenda items that lay out controversies on important potential deliverables by the WTO in 2021. The agenda for the two day meeting contains sixteen items. See WT/GC/W/820 (26 February 2021) embedded below.

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General Council meetings deal with updates on ongoing work at the WTO and address issues teed up by particular Members for consideration at the meeting. This post does not take up all agenda items but highlights a few of possible interest. Because DDG Wolff’s statement on February 25 reviews many of the activities of the WTO in the last six months which shows some of the positive developments, the full statement is embedded below.

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The 12th WTO Ministerial Conference

Agenda item 4 deals with the 12th WTO Ministerial Conference. It is expected that there will be a decision on the timing and location of the twelfth Ministerial Conference at the General Council session on Monday-Tuesday. The 12th MC was postponed from June 2020 because of the COVID-19 pandemic. With the continued challenges from the pandemic the likely date will be the end of 2021. Kazakhstan which had offered to host the conference in 2020 and again in the summer of 2021 has recently indicated a willingness to host in December of this year as well. The ministerial had originally been scheduled for June because of challenging weather conditions in Kazakhstan in December. See TWELFTH SESSION OF THE MINISTERIAL CONFERENCE, COMMUNICATION FROM KAZAKHSTAN, 8 February 2021, WT/GC/229 (24 February 2021)(embedded below).

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Report on WTO Accessions

Deputy Director-General Wolff will provide a statement on the annual report on WTO accessions. The report is WTO ACCESSIONS, 2020 ANNUAL REPORT BY THE DIRECTOR-GENERAL, WT/ACC/38, WT/GC/228 (18 February 2021). Activity on accessions was challenged by the pandemic and inability to travel/hold in person meetings. More technical assistance and virtual meetings were held. Accessions are important for acceding governments in terms of promoting reforms at home and obtaining increased certainty in their international trade relations. Accessions are also an important benefit of membership for existing Members as acceding Members reduce tariffs and various non-tariff barriers to gain accession. The first eight paragraphs of the report provide an overview of activities in 2020 and are copied below.

Overview of activities in 2020

“1. 2020 was an unprecedented year in recent history due the COVID-19 pandemic outbreak and its consequences which have touched upon every single aspect of our lives in every corner of the world. It was a challenging year for the WTO, not least because the pandemic disrupted its core activities, especially during the first half of the year, and it also disrupted the international trade of Members, except for supplies of essential goods critical to combatting the health crisis as trade in these goods expanded dramatically. The difficulties and challenges arising from the pandemic were particularly pronounced in acceding governments due to the uncertainties of being outside of the multilateral trading system. In fact, the desire and urgency to be part of the WTO was never felt stronger than in the pandemic year. This was reflected in the level of accession activities in 2020, which was sustained vis-à-vis previous years, with a significant increase in technical assistance and outreach activities.

“2. The year for accessions started with the establishment of a new Working Party for the accession of Curaçao, a constituent country within the Kingdom of the Netherlands (WTO Member), following its application for an independent membership as a separate customs territory pursuant to Article XII of the Marrakesh Agreement. This constituted the 59th request by a state or separate customs territory for membership since the establishment of the Organization in 1995. In July, Turkmenistan was granted observer status in the WTO, with the understanding that it would apply for accession no later than in five years. This brought the total number of observer governments with the intention to accede to the WTO to 24, an increase by five since 2016 when Afghanistan and Liberia became the Organization’s most recent Members. The continuing interest to become part of the multilateral trading system is a testament to the attraction and relevance of its values and principles for all economies, regardless of their size or level of development.

“3. The COVID-19 pandemic undoubtedly hampered or delayed the technical work by acceding governments, Members and the Secretariat to prepare for, engage in and follow up on Working Party meetings. However, thanks to the firm commitment of the acceding governments to advance their work, four Working Parties met, including through the use of virtual platforms that connected the acceding governments which were unable to travel to Geneva. One acceding government had to cancel its already scheduled meeting due to the suspension of all WTO meetings in March. Out of the four accession Working Party meetings held in 2020, three were on LDC accessions (Ethiopia, Comoros and Timor-Leste). In two cases – the Working Parties of Ethiopia and Uzbekistan – this also represented the formal resumption of accession processes after several years of inactivity (8 and 15 years, respectively), signalling their desire to use WTO membership negotiations to drive domestic economic reforms, which have broader implications in the regions where they are located.

“4. When the pandemic halted planned missions, technical assistance, and outreach activities which required air travel, the Secretariat rapidly shifted the mode of operation to virtual format and took advantage of the opportunities provided thereby. In addition to the formal accession Working Party meetings which took place via Interprefy, the Accessions Division organised virtual technical meetings and briefing sessions with acceding governments, Working Party Chairpersons and partners in support of accessions. Moreover, the Division delivered a number of technical assistance, training and outreach activities in response to articulated needs of acceding governments, using various virtual platforms, such as MS Teams, Zoom and WebEx. In fact, the number of activities delivered by the Division and of participants who attended or were trained in 2020 exceeded considerably the numbers in previous years.

“5. One of the novel outreach programs developed in 2020 was two week-long activities which consisted of a series of webinars combining lectures, training and panel discussions. The first Accessions Week was organised from 29 June to 3 July, and the first edition of the Trade for Peace Week took place from 30 November to 4 December. These virtual events brought together a large number of resource persons and panellists from around the world and reached out to a larger number of participants, in a highly cost-effective manner, in comparison with traditional in-person activities. While the full values and benefits of in-person interaction cannot be replaced or replicated, the Accessions Week enabled the Secretariat to remain engaged with acceding governments and Members, experts and partners, beyond Geneva and around the world. The Trade for Peace Week provided an effective networking platform to expand the WTO’s partnership with the peace and humanitarian communities in support of fragile and conflict affected (FCA) countries in accession.

“6. The importance of collaboration and cooperation with partners was never felt more strongly than in 2020. The Secretariat made concerted efforts to enhance and expand the “Trade for Peace through WTO Accession” Initiative to support FCA countries in accession and those recently acceded to the WTO. In 2020, nine acceding governments were identified as being in a FCA situation according to the World Bank’s classification1, while conflicts emerged or resurged in some others. The pandemic hit hardest countries which had already been suffering from years of conflict, political crises, drought and other natural disasters, compounded by declines of the price of oil and other commodities. Nonetheless, some FCA acceding LDCs showed remarkable resilience in sustaining their engagement in accession. The Working Party on the Accession of the Union of Comoros resumed its work with determination to finalise the process as soon as possible. The Working Party on the Accession of Timor-Leste activated the Working Party by holding its first meeting nearly four years after its establishment, despite various challenges faced on the domestic front. Moreover, Somalia submitted its Memorandum on the Foreign Trade Regime, the base document to start its accession engagement with Members. Furthermore, the Secretariat continued to provide support to the g7+ WTO Accessions Group, which was coordinated by Afghanistan.

“7. The year 2020 marked the 25th anniversary of the WTO. The Secretariat used its annual flagship event, the China Round Table on WTO Accessions, to review the contributions made by accessions to the multilateral trading system since 1995. The event also provided an opportunity for an exchange of ideas to explore the future expansion of WTO membership towards universality, including through possible improvements in the accession process. The year also marked a significant anniversary milestone for five Article XII Members2 – Albania, Croatia, Georgia, Jordan and Oman which joined the WTO in 2000, the year with the largest number of new members to date. Other anniversary milestones included the fifth anniversaries of Membership of Kazakhstan and Seychelles and the fifteenth anniversary for the Kingdom of Saudi Arabia. In recent years, membership anniversaries have become an important occasion to reflect on the benefits and values of being part of the Organization.

“8. Finally, the thematic focus of the 2020 Annual Report was on the complementarities and synergies in negotiating WTO membership and regional trade agreements. Almost all acceding governments are involved in regional integration initiatives in parallel with their efforts to achieve WTO membership. The highlight of the year was the implementation of the African Continental Free Trade Area (AfCFTA) to which all African WTO applicants are signatories. The Report’s thematic section builds on the rich discussions held on the topic during the 2020 Regional Dialogues on WTO Accessions for Africa and for the Arab Region, as well as other meetings on Central Asia and Eurasia. It aims to explore key opportunities and challenges that may arise in a simultaneous pursuit of regional and global integration efforts and to provide a checklist of issues for trade negotiators to consider in maximising the benefits from the participation in multiple trade arrangements.”

The full report is embedded below.

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Waiver of TRIPS Obligations During COVID-19 Pandemic

The sixth agenda item involves the effort from India and South Africa with a number of other developing or least developed countries to obtain a waiver from most TRIPS obligations on medical goods needed for the COVID-19 pandemic. This has been a very controversial issue with developed countries with pharmaceutical companies involved in the production of vaccines and other items opposing the waiver on the basis of existing flexibilities within the TRIPS Agreement and on the global efforts through the WHO, GAVI and CEPI to provide vaccines to low- and middle-income countries through COVAX with financial contributions from many countries, NGOs and others. See, e.g., February 19, 2021, COVAX’s efforts to distribute COVID-19 vaccines  to low- and middle income countries — additional momentum received from G-7 virtual meeting, https://currentthoughtsontrade.com/2021/02/19/covaxs-efforts-to-distribute-covid-19-vaccines-to-low-and-middle-income-countries-additional-momentum-from-g-7-virtual-meeting/

The TRIPS Council received the proposal back in October but has been unable to provide a recommendation to the General Council. A meeting of the TRIPS Council earlier this month continued the lack of agreement. Thus, the agenda item will simply result in the item being continued on the General Council’s future agendas until resolved or dropped. See WTO, Members discuss TRIPS waiver request, exchange views on IP role amid a pandemic, 23 February 2021, https://www.wto.org/english/news_e/news21_e/trip_23feb21_e.htm (” In this context and given the lack of consensus on the waiver request, members agreed to adopt an oral status report to be presented to the General Council at its next meeting on 1-2 March. The report indicates that the TRIPS Council has not yet completed its consideration of the waiver request and therefore will continue discussions and report back to the General Council.”); December 11, 2020, Council for Trade-Related Aspects of Intellectual Property Rights meeting of December 10, 2020 – no resolution on proposed waiver of TRIPS obligations to address the pandemic, https://currentthoughtsontrade.com/2020/12/11/council-for-trade-related-aspects-of-intellectual-property-rights-meeting-of-december-10-2020-no-resolution-on-proposed-waiver-of-trips-obligations-to-address-the-pandemic/; December 6, 2020, Upcoming December 11th Council for Trade-Related Aspects of Intellectual Property Rights meeting – reaction to proposed waiver from TRIPS obligations to address COVID-19, https://currentthoughtsontrade.com/2020/12/06/upcoming-december-11th-wto-council-for-trade-related-aspects-of-intellectual-property-rights-meeting-reaction-to-proposed-waiver-from-trips-obligations-to-address-covid-19/; November 2, 2020, India and South Africa seek waiver from WTO intellectual property obligations to add COVID-19 – issues presented, https://currentthoughtsontrade.com/2020/11/02/india-and-south-africa-seek-waiver-from-wto-intellectual-property-obligations-to-address-covid-19-issues-presented/.

Fisheries Subsidies negotiations — Draft Ministerial Decision

The WTO has been pursuing negotiations on fisheries subsidies to address sustainable fishing concerns since the end of 2001. Conclusion of the negotiations were supposed to take place in 2020 but WTO Members were unable to get the job completed in part because of disruptions from the COVID-19 pandemic. While completing the negotiations remains a key objective of Members and the incoming Director-General and such completion is needed to fulfill the UN Sustainable Development Goal 14.6, WTO Members continue to face a large number of challenging issues. See, e.g., WTO press release, WTO members hold February cluster of meetings for fisheries subsidies negotiations, 24 February 2021, https://www.wto.org/english/news_e/news21_e/fish_24feb21_e.htm; February 22, 2021, An early test for the incoming WTO Director-General — helping Members get the Fisheries Subsidies negotiations to a conclusion, https://currentthoughtsontrade.com/2021/02/22/an-early-test-for-the-incoming-wto-director-general-helping-members-get-the-fisheries-subsidies-negotiations-to-a-conclusion/.

Agenda item 7 is entitled “Supporting the Conclusion of Fisheries Subsidies Negotiations for the Sustainability of the Ocean and Fishing Communities — Draft Ministerial Decision — Communication from Brazil (WT/GC/W/815. The draft Ministerial Decision is an effort by Brazil to highlight the critical aspect of the negotiations which is to address environmental sustainability and presumably reflects Brazil’s concerns with the efforts of so many Members to protect their subsidies versus ensuring sustainable fishing. The document is embedded below.

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An attack on Joint Statement Initiatives

As reviewed in the incoming Director-General’s statement on February 15 and the summary of her statement by DDG Wolff on February 25, an important aspect of ongoing work at the WTO is a number of Joint Statement Initiatives that were started at the end of the 11th Ministerial Conference in Buenos Aires, including on e-commerce/digital trade.

Agenda item 10 is a frontal attack on such initiatives by India and South Africa through their paper, “Legal Status of Joint Statement Initiatives and Their Negotiated Outcomes”, WT/GC/819. I had reviewed the submission in an earlier post. See February 20, 2021, Will India and South Africa (and others) prevent future relevance of the WTO?, https://currentthoughtsontrade.com/2021/02/20/will-india-and-south-africa-and-others-prevent-future-relevance-of-the-wto/. The agenda item will like see many delegations take the floor to support the use of joint statement initiatives within the WTO or to oppose them. While there won’t be a resolution of the issue, the challenge to the process could significantly handicap some of the efforts envisioned by the incoming Director-General to help developing and least developed countries take advantage of the e-commerce/digital trade world and eventually participate in talks and/or in an agreement. WT/GC/W/819 is embedded below.

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Agenda item 8 is viewed as related to agenda item 10. India has been seeking to limit WTO consideration of e-commerce issues to the multilateral efforts over many years within the existing Councils and Committees of the WTO (but where limited progress has been made).

COVID-19 and possible future pandemics — addressing existing trade restrictions and improving the functioning of the WTO to better handle in the future

The incoming Director-General has as a high priority to work with Members to improve monitoring of export restraints on medical goods and agricultural goods during the pandemic and working with Members to see that the WTO helps Members recover and better handle any future pandemics. The Ottawa Group had put forward a trade and health initiative in November 2020. See COVID-19 AND BEYOND: TRADE AND HEALTH, WT/GC/223 (24 November 2020). The communication was made by Australia, Brazil, Canada, Chile, the European Union, Japan, Kenya, Republic of Korea, Mexico, New Zealand, Norway, Singapore and Switzerland. The document contains an annex reviewing the types of actions Members could take to improve the response to the pandemic and improve conditions going forward. Included in the annex to the communication are sections on export restrictions; customs, services and technical regulations; tariffs; transparency and review; cooperation of the WTO with other organizations. Several paragraphs in the communication review the issue of possible export restrictions on vaccines and are copied below.

“9. We realize that the challenges related to the scarcity of essential medical goods, now alleviated to some extent by the response on the supply side, may be repeated at the moment of the development of a vaccine or new medical treatments. In this context, we welcome the COVID-19 Vaccine Global Access Facility (COVAX), a global pooled procurement mechanism for COVID-19 vaccines, managed by Gavi, the Vaccine Alliance, the Coalition for Epidemic Preparedness Innovations (CEPI) and WHO. This mechanism is critical in securing an equitable share of vaccines for all Members of the international community. As we strongly support the objective of this facility, we call on WTO Members to ensure that any export-restricting measures do not pose a barrier to the delivery of necessary supplies under the COVAX facility.

“10. We recognize the collaborative efforts of private and public stakeholders in the research and development of COVID-19 diagnostics, vaccines and treatments. We encourage the industry to take actions to ensure access at affordable prices to COVID-19 diagnostics, vaccines and treatments for vulnerable populations and support voluntary pooling and licensing of IP rights to accelerate the development of such diagnostics, treatments and vaccines and scaling up their production. We recognize the importance of the IP system in promoting R&D and innovation for access to effective treatments. We note that the flexibilities provided by the TRIPS Agreement and reaffirmed in the Doha Declaration on the TRIPS Agreement and Public Health remain available to protect public health and to promote access to medicines for all.”

The full document is embedded below.

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Canada will be providing an update on the initiative at the General Council meeting and will likely see many Members provide comments on the agenda item.

Agenda item 9 was added by Colombia, Costa Rica, Ecuador, Panama and Paraguay reflecting concerns by them (and presumably many other trading partners) about actions taken by the European Union to exert control over exports of vaccines from the EU in light of EU concerns about its own access to vaccines from manufacturers. See CALL TO PREVENT EXPORT RESTRICTIONS ON COVID-19 VACCINES, WT/GC/818 (18 February 2021). The document is embedded below.

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Since the EU is one of the Members who has pushed the trade and health initiative, there is concern by some WTO Members that its actions on vaccines run counter to the initiative it is supporting. Presumably the EU will argue that its actions are consistent with its rights under the WTO and is consistent with the language laid out in paragraphs 9 and 10 above.

The two agenda items are likely to show the concerns of many Members on equitable access to medical goods during the pandemic and the reluctance of at least some Members to reduce their flexibilities under the existing WTO rights and obligations.

Conclusion

DDG Wolff indicated that Members selected the incoming Director-General because she is “fearless in the face of daunting challenges”. There is no shortage of daunting challenges facing the WTO and its new Director-General. A few have been reviewed above.

Some good news is that the EU and the United States are supportive of many of the priorities laid out by DG Ngozi Okonjo-Iweala in her February 15 statement to the Special Session of the General Council as seen in the recent EU revised trade policy and the opening statement of USTR nominee Katherine Tai at yesterday’s Senate Finance Committee confirmation hearing See February 18, 2021, The European Commission’s 18 February 2021 Trade Policy Review paper and Annex — WTO reform and much more proposed, https://currentthoughtsontrade.com/2021/02/18/the-european-commissions-18-february-2021-trade-policy-review-paper-wto-reform-and-much-more-proposed/; February 25, 2021, U.S. Trade Representative nominee Katherine Tai confirmation hearing before the U.S. Senate Finance Committee, https://currentthoughtsontrade.com/2021/02/25/u-s-trade-representative-nominee-katherine-tai-confirmation-hearing-before-the-u-s-senate-finance-committee/.

The challenges the new Director-General and the WTO Members face will be made harder by the lack among Members of a common vision and agreed purpose of the WTO, by the current inability of the WTO system to address fundamentally different economic systems, by the structure of decision making, by the failure of obligations to be updated to match level of economic development and role in global trade and by the related issue of how special and differential treatment is used. These challenges have resulted in a negotiating function that is broken, in a dispute settlement system that has no checks on the reviewers for errors or failures to operate within the bounds of authority granted in the Dispute Settlement Understanding and in the underperformance of the monitoring and implementation function.

Hopefully, DG Okonjo-Iweala will develop a strong personal staff and group of DDGs to help her attempt the seemingly impossible — getting meaningful progress and reform from the 164 current WTO Members. See February 13, 2021, Leadership change at the WTO — with Dr. Ngozi Okonjo-Iweala’s arrival next week, what support team and early changes in the role of the Secretariat could help WTO Members move forward?, https://currentthoughtsontrade.com/2021/02/13/leadership-change-at-the-wto-with-dr-ngozi-okonjo-iwealas-arrival-next-week-what-support-team-and-early-changes-in-the-role-of-the-secretariat-could-help-wto-members-move-forward/

Director-General Ngozi Okonjo-Iweala will get her first reality check at the General Council meeting on March 1-2.


U.S. Trade Representative nominee Katherine Tai — confirmation hearing before the U.S. Senate Finance Committee

President Biden’s nominee to become the U.S. Trade Representative, Katherine Tai, has received broad support from business, labor, agriculture and NGOs since her nomination. For example, the U.S. Chamber of Commerce submitted a letter of support to the Senate Finance Committee on February 23, 2021. The letter from the U.S. Chamber and several other endorsements are embedded below.

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Sierra-Club-Applauds-Katherine-Tais-Nomination-as-U.S.-Trade-Representative-_-Sierra-Club

Committee-of-100-Letter-of-Support-for-the-Confirmation-of-Katherine-Tai-as-U.S.Trade-Representative-_-Committee-100

Today at the U.S. Senate Finance Committee Katherine Tai’s nomination is considered. While it is widely expected that Ms. Tai will be easily confirmed by the full Senate if/when she is reported out by the Finance Committee, the hearing today identified not only Ms. Tai’s views of the Administration’s priorities but also the issues of greatest interest to one of the Congressional Committees with jurisdiction over trade. For example, Chairman Wyden (D-Oregon) and Ranking Member Crapo (R-Idaho), Ms. Tai’s opening statement in their opening statements focused on very different issues viewed as important to them. Forced labor and concerns over efforts by trading partners to tax digital trade in a manner harmful to U.S. companies were issues raised by Chairman Wyden while the need to pursue more trade agreements (such as with the United Kingdom) was of great importance to Ranking Member Crapo. Ms. Tai was introduced by Chairman Neal and Ranking Member Brady of the U.S. House of Representatives Committee on Ways and Means in a sign of bipartisanship for a former Chief Trade Counsel for the Committee.Democrats.

Ms. Tai’s opening statement repeated themes she had articulated when she was nominated by then President-elect Biden focusing on helping the country recover from the pandemic, enforcement of the USMCA, dealing with China, and engaging with multilateral fora. Her opening statement is copied below and can be found at https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/february/opening-statement-ambassador-designate-katherine-tai-senate-finance-committee.

“Mr. Chairman, Ranking Member Crapo, and members of the Committee — thank you for the opportunity to appear before you today.

“The chance to serve the American people, fight on their behalf, and represent them on the world stage once again will be the greatest honor of my life. It’s a privilege I’ve experienced before at the Office of the United States Trade Representative — and a responsibility that, if confirmed, I look forward to embracing once again. I thank President Biden for providing me with this opportunity.

“Serving as the top U.S. trade representative around the globe holds special resonance for me as the daughter of immigrants.

“My parents were born in mainland China, and grew up in Taiwan. The immigration reforms set in motion by President Kennedy opened a path for them to come here as graduate students in the sciences. And they made the most of their American opportunity.

“My dad became a researcher at the Walter Reed Army Institute of Research. He helped the Army develop treatments for illnesses that had debilitated GIs during the Vietnam War – the war in which my father-in-law fought bravely as a young man.

“My mom still works at the National Institutes of Health. She heads a clinical trials network, developing treatments for opioid addiction that will help to stem an epidemic causing so much suffering in our communities.

“I am proud of their service to the nation that welcomed them. And I am proud to live in a country where, in just one generation, their daughter could grow up to represent the United States and our interests around the globe.

“That sense of pride and patriotism will ground me every day if I have the honor to be confirmed as United States Trade Representative.

“I know that the challenges ahead are significant.

“Our first priority will be to help American communities emerge from the pandemic and economic crisis. USTR has an important role to play in that effort. Working with Congress, the entire Biden-Harris administration, and other countries and trusted partners, USTR will help to build out strong supply chains that will get our economy back on track.

“In the longer term, we must pursue trade policies that advance the interests of all Americans — policies that recognize that people are workers and wage earners, not just consumers; policies that promote broad, equitable growth here at home; policies that support American innovation and enhance our competitive edge.

“That’s why I will make it a priority to implement and enforce the renewed terms of our trade relationship with Canada and Mexico. Too often in the past, Congress and the administration came together to finalize and pass a trade agreement. But then other urgent matters arose and we all moved on. The United States-Mexico-Canada Agreement (USMCA) is a uniquely bipartisan accomplishment that must break that trend. It represents an important step in reforming our approach to trade. We must all continue to prioritize its implementation and success. We must continue to pursue trade policies that are ambitious in achieving robust, bipartisan support.

“I will also prioritize rebuilding our international alliances and partnerships, and re-engaging with international institutions. We must do the hard work, and secure the necessary reforms that allow the world to come together and address common threats like climate change, the COVID pandemic, and a global economic downturn.

“That duty of leadership extends, of course, to addressing the challenges posed by China.

“I previously served as America’s chief enforcer against China’s unfair trade practices. I know firsthand how critically important it is that we have a strategic and coherent plan for holding China accountable to its promises and effectively competing with its model of state-directed economics. I know the opportunities and limitations in our existing toolbox. And I know how important it is to build what the President has termed ‘a united front of U.S. allies.’

“We must recommit to working relentlessly with others to promote and defend our shared values of freedom, democracy, truth, and opportunity in a just society.

“China is simultaneously a rival, a trade partner, and an outsized player whose cooperation we’ll also need to address certain global challenges. We must remember how to walk, chew gum and play chess at the same time. That means here at home, we must prioritize resilience and make the investments in our people and our infrastructure to harness our potential, boost our competitiveness, and build a more inclusive prosperity. We must also impart the values and rules that guide global commerce — and we must enforce those terms vigorously.

“This is work I am eager to take on once more.

“Having spent my career fighting for American workers, I am honored by the opportunity to work alongside the bright and dedicated public servants at USTR, with our partners and allies, and with each of you. Having served nearly seven years in the House of Representatives, I know that U.S. trade policy is most successful when it is conducted through a healthy partnership between the administration and the Congress.

“I look forward to bringing our trade relationships to bear helping American communities emerge out of crisis and into greater prosperity.

“And I look forward to answering your questions.

“Thank you.”

Topics covered during the question and answer period were broad ranging and included questions on: USMCA enforcement looking both at Mexico (agriculture and energy) and Canada (dairy); 232 tariffs on steel and aluminum; protecting U.S. lumber interest from long running disputes with Canada on softwood lumber; taxes being imposed by trading partners on digital services; importance of intellectual property and the Special 301 report; shortage of semiconductors needed for the auto industry (supply chain vulnerability) and working with Taiwan (sole source for many semiconductors); renewing and expanding trade adjustment assistance; creating a consultation forum for the auto sector with Canada and Mexico; US-UK FTA negotiations (Ms. Tai would want to review progress and developments since 2018 USTR notice to Congress on negotiations); ethanol tariffs of 20% in Brazil and whether negotiations will continue to reduce; the U.S.-China Phase I deal (purchases and changes to laws); possibility of rejoining TPP and possibility of including India; utilization of tools for environmental part of USMCA; trade and environment/ climate issues (including adding to GSP climate change); need to open up new markets (India re apples vs. elimination of GSP for India; China, Vietnam re wheat); resolution of European Airbus dispute; need for inspector general for USTR (including costs to importers of food and beverage products U.S. has retaliated against); update review of China for the Committee; addressing industrial subsidies in China, particularly to state-owned enterprises and predatory mercantilist practices; WTO broken system is broken, activism by Appellate Body, WTO reform (focus should be on what is value of WTO to its Members; is it accomplishing the goals Members expected; how does it address current issues); country of origin labeling, important to cattle producers, need path forward in a WTO-compliant manner; expand ag market access in Southeast Asia and in Africa; compliance by China on US-China Phase I ; purchases (e.g., failure to open up polysilicon); anticorruption in trade agreements; what priorities will small businesses see in US trade negotiations (voices of small business need to be heard); UK 25% tariffs on rice from 232 retaliation; shrimp redirected from countries where rejected for phytosanitary measures; interest on new tools to supplement existing tools to address trade problems; counterfeit goods, what can be done to address rising tide of such goods; how failure of China to honor its labor obligations hurts U.S. and U.S. trading partners; dignity of work agenda; need to increase crackdown on banning imports from forced labor, particularly China treatment of Uighars; 301 exclusion process, need to be run efficiently (transparency, predictability, due process, speed of decision); China’s actions on critical minerals (e.g., rare earth)(trade plays a role but supply chain resilience is key); access to India’s pulse crops (peas) market where there are high tariffs; women’s empowerment; reshoring; tariffs on solar equipment; soda ash trade barriers in trading partners; growing energy exports; problems for seasonal agricultural producers since trade remedies don’t presently address seasonality; critical infrastructure and reliability of vendors (e.g., Huawei); process under Trade Promotion Authority – lack of consultation and lack of mock mark-up in past.

As is always the case in confirmation hearings, Senators raise issues important to their constituents or their broader interests. Some of the topics raised involve agencies other than USTR (or for which USTR has some role). Because trade is an issue where Congress has a constitutional role, an important issue where USTR nominees are being considered is the ability/willingness of the nominee to work with the Congressional Committees of jurisdiction on trade issues. Ms. Tai, having served as staff for the House Ways and Means Committee Democrats, is expected to work closely with the Congressional Committees including the Senate Finance Committee.

What is clear from the Finance Committee hearing today is that the Committee (1) is deeply concerned with the U.S. relationship with China and how to address the range of distortions and obtain compliance with agreements in place, (2) has a strong interest in ensuring enforcement of existing agreements, with a focus being the U.S.-Mexico-Canada Agreement; (3) wants expanded market access abroad (particularly around agricultural products) including through new free trade agreements and tackling retaliatory tariffs or high tariffs used by trading partners; (4) views the WTO as needing meaningful reform including the long-standing U.S. concerns with the Appellate Body; (5) supports strong intellectual property protections in trade agreements, (6) supports resolution of the US-EU disputes on large civilian aircraft; (7) wants the Biden Administration in building strong supply chains on critical products (critial minerals, semiconductors). The Committee asked questions on a broad range of issues including tariffs imposed under section 232of the Trade Expansion Act of 1962, as amended (national security determinations on steel and aluminum), section 301 of the Trade Act of 1974, as amended (various practices by China which resulted in tariffs), and Section 201 of the Trade Act of 1974, as amended ( safeguard tariffs on solar products). Members also asked about U.S. laws dealing with preferences for developing countries (the Generalized System of Preferences expired in 2020) and adjustment assistance which expires in 2021. Many Finance Committee members are from states with large agricultural sectors, and so there were many questions that went to particular agricultural products and market access challenges faced. There were questions about the climate crisis and the role trade can play in addressing the concerns including addressing plastics in the oceans.

There were also questions asked by Senator Warren of Massachusetts about the trade negotiation process. Questions went to composition of advisory committees (85% are corporate representatives) and lack of transparency in drafts of agreements. Sen. Warren asked for release of drafts 60 days before agreement goes to Congress and wants all advisory committees to have more representatives from labor, consumer and environmental groups are larger than corporate representatives. Senator Warren believes these process changes are needed to make U.S. trade policy more worker friendly and more representative of U.S. interests.

The hearing ended after three hours and fiifteen minutes at 1:15 p.m. Chairman Wyden emphasized the need to expand the “winner’s circle” as the U.S. trade policy. Transparency is important to open the process up for the public. Sen. Wyden asks for Ms. Tai to supply views within 30 days of confirmation on what needs to be done to expand transparency.

Written questions are due by 5:00 p.m. on February 26. Once answers are provided, the Chairman will arrange for a Committee vote. If affirmative, Ms. Tai’s nomination will go to the full Senate. Based on today’s hearing, it is likely that the Committee will vote her nomination out either unanimously or nearly unanimously and that she will receive confirmation by the full Senate in the coming weeks.