Director-General Ngozi Okonjo-Iweala

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

· March 3, 2021 · COVID-19, Director-General Ngozi Okonjo-Iweala · , , , , , , , , , , , , , · No Comments

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.

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

· March 1, 2021 · Director-General Ngozi Okonjo-Iweala · , , , , , · No Comments

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.

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

· February 26, 2021 · 12th Ministerial Conference, Deputy Director-General Alan Wolff, Director-General Ngozi Okonjo-Iweala, electronic commerce and digital trade, Fisheries Subsidies negotiations, General Council, Waiver of TRIPS Obligations · , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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.

W820

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.

WTO-_-2021-News-items-Speech-DDG-Alan-Wolff-DDG-Wolff-calls-on-members-to-work-with-new-Director-General-to-reform-WTO

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).

229

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.

WTACC38

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.

WTGCW815

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.

WTGCW819-1

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.

WTGC223

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.

WTGCW818

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.