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USTR 2021 National Trade Estimate Report on Foreign Trade Barriers — areas of concern with a focus on China

Every year for the last 36 years, USTR releases a National Trade Estimate Report on Foreign Trade Barriers. This year’s forward provides a little background on the report. See USTR, 2021 National Trade Estimate Report on Foreign Trade Barriers, page 1, https://ustr.gov/sites/default/files/files/reports/2021/2021NTE.pdf.

“The 2021 National Trade Estimate Report on Foreign Trade Barriers (NTE) is the 36th in an annual series that highlights significant foreign barriers to U.S. exports, U.S. foreign direct investment, and U.S. electronic commerce. This document is a companion piece to the President’s 2021 Trade Policy Agenda and 2020 Annual Report, published by the Office of the United States Trade Representative (USTR) in March.

“In accordance with section 181 of the Trade Act of 1974, as amended by section 303 of the Trade and Tariff Act of 1984 and amended by section 1304 of the Omnibus Trade and Competitiveness Act of 1988, section 311 of the Uruguay Round Trade Agreements Act, and section 1202 of the Internet Tax Freedom Act, USTR is required to submit to the President, the Senate Finance Committee, and appropriate committees in the House of Representatives, an annual report on significant foreign trade barriers. The statute requires an inventory of the most important foreign barriers affecting U.S. exports of goods and services, including agricultural commodities and U.S. intellectual property; foreign direct investment by U.S. persons, especially if such investment has implications for trade in goods or services; and U.S. electronic commerce. Such an inventory enhances awareness of these trade restrictions, facilitates U.S. negotiations aimed at reducing or eliminating these barriers, and is a valuable tool in enforcing U.S. trade laws and strengthening the rules-based system.”

This year’s report covers 65 countries or country groups, so not all trading partners are covered by the annual report. China has the largest section of the report for an individual country (36 pages) while the European Union (covering 27 countries) has the largest section overall (52 pages). Other important trading partners with significant sections in the report include India (24 pages), Russian Federation (20 pages), Japan (18 pages), Indonesia (16 pages), Republic of Korea (14 pages), Brazil (14 pages), Vietnam (14 pages). the USMCA partners had smaller sections — Canada (8 pages) and Mexico (12 pages). the countries covered account for nearly 100 percent of U.S. trade in goods and nearly 90% of U.S. services trade.

The USTR press release from March 31, 2021 (majority of release copied below) provides an outline of some of the major areas of concern. See USTR, Ambassador Tai releases 2021 National Trade Estimate Report, March 31, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/march/ambassador-tai-releases-2021-national-trade-estimate-report.

Significant Barriers to U.S. Exports in 65 Trading Partners Detailed

“WASHINGTON – United States Trade Representative Katherine Tai today released the 2021 National Trade Estimate (NTE) Report, providing a detailed inventory of significant foreign barriers to U.S. exports of goods and services, investment, and electronic commerce.

“’The President’s Trade Agenda released earlier this month outlined a clear vision for supporting America’s working families by promoting a fair international trading system that boosts inclusive economic growth,’” said Ambassador Tai. ‘The 2021 NTE Report identifies a range of important challenges and priorities to guide the Biden Administration’s effort to craft trade policy that reflects America’s values and builds back better.’

“Published annually since 1985, the NTE Report is a comprehensive review of significant foreign trade barriers affecting U.S. exports of goods and services. The 570-page report examines 65 trading partners and country groups, including the U.S.’ largest trading partners, all 20 U.S. FTA partners, and other economies and country groupings of interest such as the Arab League, the United Kingdom (included as a separate entity for the first time in this report), and the European Union. Together, these economies account for 99 percent of U.S. goods trade and 87 percent of U.S. services trade. 

“The NTE Report covers significant trade barriers in 11 areas, including (1) import policies such as tariffs, import licensing and customs barriers; (2) technical barriers to trade; (3) sanitary and phytosanitary measures; (4) subsidies; (5) government procurement; (6) intellectual property protection; (7) services barriers; (8) barriers to digital trade and electronic commerce; (9) investment barriers; (10) competition; and (11) other barriers. 

“Taken as a whole, the NTE Report highlights significant barriers that present major policy challenges with implications for future U.S. growth opportunities, and the fairness of the global economy. Examples of these significant obstacles include: 

Agricultural Trade Barriers:  The NTE Report details an array of tariff and nontariff barriers to U.S. agricultural exports across trading partners and regions, ranging from non-science-based regulatory measures, opaque approval processes for products of agricultural biotechnology, burdensome import licensing and certification requirements, and restrictions on the ability of U.S. producers to use the common names of the products that they produce and export. USTR will continue to engage foreign governments on barriers that hamper the ability of U.S. farmers, ranchers and food processors to access markets worldwide. 

Digital Trade:  The 2021 NTE Report details restrictive data policies in India, China, Korea, Vietnam, and Turkey, among other countries; local software pre-installation requirements in Russia, Indonesian tariffs on digital products, and existing or proposed local content requirements for online streaming services in Australia, Brazil, Canada, China, EU, Mexico, Ukraine, and Vietnam; and discriminatory tax measures in Austria, India, Italy, Spain, Turkey, and the UK. USTR will continue to engage foreign governments on digital policies that threaten the regulatory landscape for U.S. exporters of digital products and services and undermine U.S. manufacturers’ and service suppliers’ ability to move data across borders. 

Excess Capacity:  China’s state-led approach to the economy and trade makes it the world’s leading offender in creating non-economic capacity, as evidenced by the severe and persistent excess capacity situations in several industries, including steel, aluminum, and solar, among others. China also is well on its way to creating severe excess capacity in other industries through its pursuit of industrial plans such as Made in China 2025, pursuant to which the Chinese government is doling out hundreds of billions of dollars to support Chinese companies and requiring them to achieve preset targets for domestic market share–at the expense of imports–and global market share in several advanced manufacturing industries. USTR will continue its bilateral and multilateral efforts to address these harmful trade practices.

Technical Barriers to Trade:   Technical regulations or conformity assessment procedures that unnecessarily restrict trade or curb the movement of innovative products risk lost opportunities to capitalize on America’s leadership in science and high-tech manufacturing, services, and agriculture. The NTE Report’s many examples of this challenge range from non-transparent European Union chemical regulations to Chinese Information Technology cybersecurity and encryption standards, to Indian and Brazilian testing and certification rules for telecommunications equipment, to technology. 

“The United States is taking steps to address these issues, and encourage flexible regulatory approaches and transparent, open processes, with these and many other partners. Within APEC, for example, the United States is engaged in projects on cybersecurity and blockchain to identify key public policy issues, and has projects in development on aerial drones and 3D printing. Another key example is USTR’s bilateral and multilateral work on standards and regulations related to electric cars, to ensure that vehicles from different manufacturers can all be charged reliably.

“The NTE Report details thousands of individual barriers to specific manufactured goods, farm products, and services. Each can reduce U.S. opportunities to export, invent, support jobs, and raise wages and incomes. These range from Argentina’s imposition of quota limits on imported books in September 2020 to India’s 38.8 percent average tariff on agricultural goods; the anomalous technical standards Saudi Arabia applies to shoes and electronic equipment; Ecuador’s mandatory and cumbersome process for allocating import licenses for agriculture products such as meats and dairy products; Indonesian local content requirements across a broad range of sectors; and Russian bans on imported food.”

What the NTE has to say about China 

The United States has for many years raised multiple concerns with China’s practices which the U.S. views as distorting trade flows and impeding market access to China. While the U.S. and China have engaged bilaterally extensively since China’s WTO accession and the U.S. has pursued several dozen disputes against Chinese practices that were clearly contrary to WTO obligations of China, little overall progress has been made in resolving the wide array of Chinese government distortions created and maintained over the years. These distortions contribute to the extraordinary trade deficit the United States has with China. See, e.g., U.S. Department of Commerce, Bureau of Economic Analysis, MONTHLY U.S. INTERNATIONAL TRADE IN GOODS AND SERVICES, FEBRUARY 2021, April 7, 2021, https://www.bea.gov/news/2021/us-international-trade-goods-and-services-february-2021 (U.S. trade deficit in 2020 in goods with China was $310.2 billion; U.S. trade surplus in services was $22.1 billion; U.S. deficit in goods with China increased to $50.9 billion in the January – February 2021 period versus $42.1 billion in the first two months of 2020).

The Trump Administration pursued a 301 investigation on a number of intellectual property concerns with China, conducted Section 232 national security investigations on steel and aluminum — two sectors where Chinese actions have created massive global excess capacity — and negotiated with China the U.S.-China Phase I Agreement which took effect in mid-February 2020. The Agreement both addressed a number of problems in agriculture, intellectual property and services and committed China to expanded purchases of goods and services from the United States in 2021-2022 (and going forward). The NTE reviews where Chinese commitments under the Phase I Agreement apply and what progress is being seen. On the purchase commitments, China has not come close to meeting the commitments in 2021 though there were increased imports from the U.S. of agricultural products and energy products. See, e.g., March 20, 2021, The U.S.-China Phase 1 Trade Agreement under the Biden Administration, https://currentthoughtsontrade.com/2021/03/20/the-u-s-china-phase-1-trade-agreement-under-the-biden-administration/. The U.S. has a long history of China promising reforms that are either not carried out or are undermined by additional restrictions. The list of areas of concern making it into the annual NTE is not exhaustive but illustrative of the challenges to obtaining conditions of fair trade with the world’s most populous nation and second largest economy.

Areas of concern for the United States with China shown in the 2021 NTE include:

Tariffs (there are some high agricultural tariffs, and the large tariffs imposed in retaliation to U.S. Section 232 actions on steel and aluminum and U.S. Section 301 actions for Chinese practices reviewed in the investigation).

Non-tariff barriers include

  • Industrial Policies (such as “Made in China 2025” and described generally as follows, “China continues to pursue a wide array of industrial policies that seek to limit market access for imported goods, foreign manufacturers, and foreign services suppliers, while offering substantial government guidance, resources, and regulatory support to Chinese industries. The beneficiaries of these constantly evolving policies are not only state-owned enterprises (SOEs) but also other domestic companies attempting to move up the economic value chain.),
  • State-Owned Enterprises (a number of concerns are raised including “China has also previously indicated that it would consider adopting the principle of ‘competitive neutrality’ for SOEs. However, China has continued to pursue policies that further enshrine the dominant role of the state and its industrial plans when it comes to the operation of state-owned and state-invested enterprises.”),
  • Industrial Subsidies (massive subsidies to industries creating excess capacity and causing harm to U.S. producers globally; U.S. is working with the EU and Japan on possible amendments to Subsidies Agreement to address certain aspects not effectively handled under existing rules)
  • Fisheries Subsidies (size of subsidies by China to its industry),
  • Excess Capacity (problem created in many sectors including steel, aluminum, solar panels and others through state programs, subsidies, etc.),
  • Indigenous Innovation (including preferences for IP developed in China),
  • Technology Transfer (301 investigation looked at “(1) the use of a variety of tools to require or pressure the transfer of technologies and IP to Chinese companies; (2) depriving U.S. companies of the ability to set market based terms in technology licensing negotiations with Chinese companies; (3) intervention in markets by directing or unfairly facilitating the acquisition of U.S. companies and assets by Chinese companies to obtain cutting-edge technologies and IP; and, (4) conducting or supporting cyber-enabled theft and unauthorized intrusions into U.S. commercial computer networks for commercial gains.”)
  • Investment Restrictions (different systems for domestic and foreign investment; discriminatory treatment),
  • Administrative Licensing (problems continue to be experienced in a wide array of licensing situations)
  • Standards (ability of foreign companies to participate in establishing; development of Chinese standards regardless of international standards),
  • Secure and Controllable ICT Policies (cybersecurity law used to discriminate against foreign ICT prducts),
  • Encryption (“Onerous requirements on the use of encryption, including intrusive approval processes and, in many cases, mandatory use of indigenous encryption algorithms (e.g., for WiFi and 4G cellular products), continue to be cited by stakeholders as a significant trade barrier.”),
  • Competition Policy (“Many U.S. companies have cited selective enforcement of the Anti-monopoly Law against foreign companies seeking to do business in China as a major concern, and they have highlighted the limited enforcement of this law against SOEs.” “Instead, these remedies seem to be designed to further industrial policy goals. Another concern relates to the procedural fairness of Anti-monopoly Law investigations of foreign companies. U.S. industry has expressed concern about insufficient predictability, fairness, and transparency in Antimonopoly Law investigative processes.”),
  • Pharmaceuticals (some long standing issues addressed in U.S.-China Phase I Agreement; others to be addressed in the future),
  • Medical devices (China’s “pricing and tendering procedures for medical devices and its discriminatory treatment of imported medical devices”),
  • Cosmetics (“concerns with China’s regulation of cosmetics.” “Despite years of United States engagement with China via the JCCT, the International Cooperation on Cosmetics Regulation, and other fora to share views and expertise regarding the regulation of cosmetics, as of March 2021 China has not yet addressed key U.S. trade concerns, including basic concerns such as the need to use international standards to facilitate cosmetics conformity assessment, nor has it provided assurances that U.S. intellectual property will be protected.”),
  • Export restraints (need to bring multiple cases at WTO on inputs where violate Protocol of Accession),
  • Value-added Tax Rebates and Related Policies (modifications of rates to change trade flows),
  • Import Ban on Remanufactured Products
  • Import Ban on Recyclable Materials
  • Trade Remedies (problems in transparency and procedural fairness; problems also in apparent use of trade remedies to go after trading partners who use WTO rights against Chinese products),
  • Government Procurement (failure to join the WTO GPA yet),
  • Corporate Social Credit System (“Foreign companies are concerned that the corporate social credit system will also be used by the Chinese Government to pressure them to act in accordance with relevant Chinese industrial policies or otherwise to make investments or conduct their business operations in ways that run counter to market principles or their own business strategies. Foreign companies are also concerned about the opaque nature of the corporate social credit system.”),
  • Other Non-Tariff Measures (“Key areas include China’s labor laws, laws governing land use in China, commercial dispute resolution and the treatment of non-governmental organizations. Corruption among Chinese Government officials, enabled in part by China’s incomplete adoption of the rule of law, is also a key concern.”).

Intellectual Property Protection (many issues were included in the U.S.-China Phase I Agreement, some progress on issues raised).

  • Trade Secrets (major area of concern and theft, some believed from government-supported entities; some improvements from U.S.-China Phase I Agreement),
  • Bad Faith Trademark Registration (a continuing major concern; some progress in U.S.-China Phase I Agreement),
  • Online Infringement (“Online piracy continues on a large scale in China, affecting a wide range of industries, including those involved in distributing legitimate music, motion pictures, books and journals, software, and video games.” Some progress made in the U.S.-China Phase I Agreement),
  • Counterfeit Goods (a major problem. “The Phase One Agreement requires China to take effective enforcement action against counterfeit pharmaceuticals and related products, including active pharmaceutical ingredients, and to significantly increase actions to stop the manufacture and distribution of counterfeits with significant health or safety risks. The Phase One Agreement also requires China to provide that its judicial authorities shall order the forfeiture and destruction of pirated and counterfeit goods, along with the materials and implements predominantly used in their manufacture. In addition, the Agreement requires China to significantly increase the number of enforcement actions at physical markets in China and against goods that are exported or in transit. It further requires China to ensure, through third party audits, that government agencies and SOEs only use licensed software.”).

Agriculture (“China remains a difficult and unpredictable market for U.S. agricultural exporters, largely because of
inconsistent enforcement of regulations and selective intervention in the market by China’s regulatory authorities. The failure of China’s regulators to routinely follow science-based, international standards, and guidelines further complicates and impedes agricultural trade. The Phase One Agreement addresses structural barriers to trade and aims to support a dramatic expansion of U.S. food, agriculture, and seafood product exports, which will increase U.S. farm and fishery income, generate more rural economic activity, and promote job growth. The Phase One Agreement addresses a multitude of non-tariff barriers to U.S. agriculture and seafood products, including for meat and meat
products, poultry, seafood, rice, dairy, infant formula, horticultural products, animal feed and feed additives, pet food, and products of agricultural biotechnology. The Agreement also includes enforceable commitments requiring China to purchase and import on average at least $40 billion of U.S. agricultural and seafood products per year in 2021 and 2022, representing an average annual increase of at least $16 billion over 2017 levels. China also agreed that it will strive to purchase and import an additional $5 billion of U.S. agricultural and seafood products each year.”).

  • Agricultural Domestic Support (China exceeds the limits allowed it; WTO dispute confirms China in violation of WTO obligations; U.S. seeking authorization to retaliate),
  • Tariff-rate Quota Administration (U.S. challenged China’s administration of TRQs on various products and won WTO dispute; U.S.-China Phase I Agreement requires China to comply on the products of concern),
  • Agricultural Biotechnology Approvals (China’s system has been a major problem for U.S. producers. U.S>-China Phase I Agreement includes commitments by China to address the major concerns of the U.S. in this area),
  • Food Safety Law (China’s actions have been quite burdensome and have failed to provide notices to the WTO in many cases. U.S>-China Phase I Agreement addresses the main concerns),
  • Poultry (China restricted U.S. exports after avian influenza in the U.S. and maintained restrictions despite actions by the U.S. that complied with World Organization for Animal Health (OIE) guidelines. U.S.-China Phase I Agreement has China committing to follow OIE guidelines and limiting restrictions to the region where there is a problem in future outbreaks),
  • Beef (“In the Phase One Agreement, China agreed to expand the scope of U.S. beef products allowed to be imported, to eliminate age restrictions on cattle slaughtered for export to China, and to recognize the U.S. beef and beef products’ traceability system. China also agreed to establish MRLs for three synthetic hormones legally used for decades in the United States consistent with Codex standards and guidelines. Where Codex standards and guidelines do not yet exist, China agreed to use MRLs established by other countries that have performed science-based risk assessments.”),
  • Pork (“China bans the use of certain veterinary drugs and growth promotants instead of accepting the MRLs set by Codex.” Some progress on opening the China market to U.S. pork products was made in the U.S.-China Phase I Agreement),
  • Horticultural Products (market access barriers for many U.S. products. U.S.-China Phase I Agreement obtains access for a number of products — fresh potatoes for processing, blueberries, nectarines and avocados from California, and barley, timothy hay and some other products.),
  • Value-added Tax Rebates and Related Policies (practice of varying rates on agricultural commodities).

Services (“In 2020, numerous challenges persisted in a number of services sectors. As in past years, Chinese regulators
continued to use discriminatory regulatory processes, informal bans on entry and expansion, case-by-case approvals in some services sectors, overly burdensome licensing and operating requirements, and other means to frustrate the efforts of U.S. suppliers of services to achieve their full market potential in China. These policies and practices affect U.S. service suppliers across a wide range of sectors, including express delivery, cloud computing, telecommunications, film production and distribution, online video and entertainment software, and legal services. In addition, China’s Cybersecurity Law and related draft and final implementing measures include mandates to purchase domestic ICT products and services, restrictions on cross-border data flows, and requirements to store and process data locally. China’s draft Personal Information Protection Law also includes restrictions on cross-border data flows and requirements to store and process data locally. These types of data restrictions undermine U.S. services suppliers’ ability to take advantage of market access opportunities in China. China also had failed to fully address U.S. concerns in
areas that have been the subject of WTO dispute settlement, including electronic payment services and theatrical film importation and distribution. The Phase One Agreement addresses a number of longstanding trade and investment barriers to U.S. providers of a wide range of financial services, including banking, insurance, securities, asset management, credit rating, and electronic payment services, among others. The barriers addressed in that Agreement
include joint venture requirements, foreign equity limitations, and various discriminatory regulatory requirements. Removal of these barriers should allow U.S. financial service providers to compete on a more level playing field and expand their services export offerings in the China market.”)

  • Banking Services (U.S.-China Phase I Agreement addresses some concerns re access including bank branches and supplying securities investment fund custody services),
  • Securities, Asset Management, and Futures Services (U.S.-China Phase I Agreement resulted in China eliminating limits on equity ownership and commits to nondiscrimination for U.S. suppliers of these services),
  • Insurance Services (despite commitments by China as part of the U.S.-China Phase I Agreement, U.S. participation in China’s insurance market remains very limited),
  • Electronic Payment Services (China has restricted access to foreign electronic payment services providers. U.S. won a WTO dispute and included provisions in U.S.-China Phase I Agreement. So far just one foreign electronic payment services provider has been licensed in China),
  • Internet-enabled Payment Services (major problems for foreign companies to obtain license to provide such services),
  • Telecommunications Services (range of barriers have limited foreign suppliers access to both basic telecom services and to value added services),
  • Internet Regulatory Regime (“China’s Internet regulatory regime is restrictive and non-transparent, affecting a broad range of commercial services activities conducted via the Internet, and is overseen by multiple agencies without clear lines of jurisdiction. China’s Internet economy had boomed over the past decade and is second in size only to that of the United States. Growth in China has been marked in service sectors similar to those found in the United States, including retail websites, search engines, online education, travel, advertising, audio-visual and computer gaming services, electronic mail and text, online job searches, Internet consulting, mapping services, applications, web domain registration, and electronic trading. However, in the Chinese market, Chinese companies dominate due in large part to restrictions imposed on foreign companies by the Chinese Government. At the same time, foreign companies continue to encounter major difficulties in attempting to offer these and other Internet-based services on a cross-border basis. China continues to engage in extensive blocking of legitimate websites and apps, imposing significant costs on both suppliers and users of web-based services and products. According to the latest data, China currently blocks a significant portion of the largest global sites. U.S. industry research has calculated that more than 10,000 foreign sites are blocked, affecting billions of dollars in business, including communications, networking, app stores, news, and other sites. Even when sites are not permanently blocked, the often arbitrary implementation of blocking, and the performance-degrading effect of filtering all traffic into and outside of China, significantly impair the supply of many cross-border services, often to the point of making them unviable.”),
  • Voice-over-Internet Protocol Services (“China’s regulatory authorities have restricted the ability to offer VOIP services interconnected to the public switched telecommunications network (i.e., to call a traditional phone number) to basic telecommunications service licensees.”),
  • Cloud Computing Services (foreign service providers can only operate in China by using a Chinese company and turning over brand, IP and other aspects; serious concern for U.S.),
  • Audio-visual and Related Services (“China prohibits retransmission of foreign TV channels, prohibits foreign investment in TV production, prohibits foreign investment in TV stations and channels in China, and imposes quotas on the amount of foreign programming that can be shown on a Chinese TV channel each day.”),
  • Theatrical Films (despite a WTO dispute and a resulting MOU where China agreed to expand number of U.S. films, China has not fulfilled its commitments)
  • Online Video and Entertainment Software Services (foreign suppliers are severely restricted),
  • Legal Services (very limited ability for foreign firms or foreign lawyers to practice in China)
  • Express Delivery Services (foreign service providers are banned from document delivery and face discriminatory and burdensome actions on package participation),
  • Data Restrictions (activities in China are likely to result in local storage requirements and limits on cross-border transfer; major concern to U.S. and many other countries).

Transparency (much work needed by China to meet obligations)

  • Publication of Trade-related Measures (WTO obligation to publish in one journal; spotty performance and many types of measures not published in the journal),
  • Notice-and-comment Procedures (little progress at sub-central government level; some progress at central government; U.S.-China Phase I Agreement commits China to provide 45 days notice and comment period for matters relating to the Agreement),
  • Translations (WTO commitment to provide translations in one of the three official WTO languages. “China does not publish translations of trade-related laws and administrative regulations in a timely manner (i.e., before implementation), nor does it publish any translations of trade-related measures issued by sub-central governments at all.”).

Conclusion

While the U.S. was the first country to produce a national trade estimate, a number of countries do so today. All trading partners have some practices which concern other trading partners, including the United States.

The length of the entry in the NTE for a give country is a reasonable indication both of the importance of the trade relationship and of the breadth of issues of concern. For the United States, the National Trade Estimate is a useful compilation of many of the major concerns raised by industries about problems in access to markets abroad or distortions created by practices of trading partners. Typically items found in the NTE will be part of USTR’s focus during the year in interactions with particular trading partners.

China is the country with the longest entry in the NTE and has been for many years. Considering the array of distortions and other problems identified in this year’s NTE, the focus on China is not surprising.

Some of the problems identified in this year’s NTE with China could be addressed through WTO reform, though China has indicated opposition to such an approach. On some of the issues, the U.S. has received repeated promises from China to address but without meaningful results to date.

What is clear is that U.S. trade relations with China are not balanced and haven’t been for the entire time of WTO membership for China. The challenge for the U.S. and the world is how to restore balance and save the global trading system. There are no obvious answers.

Recent G7 Trade Ministers Meeting — WTO issues of interest

The United Kingdom has the presidency of the G7 (Canada, France, Germany, Italy, Japan, United States and United Kingdom, with European Union as a guest) in 2021. On March 31, trade ministers had a virtual meeting which included WTO Director-General Ngozi Okonjo-Iweala. On the U.K. G7 web page, the objectives of the Trade Track of the G7 during the UK Presidency is reviewed. See G7 Trade Ministers, https://www.g7uk.org/trade-ministers/

“The UK’s 2021 G7 Presidency will feature a dedicated Trade Track at the G7 for the first time, led by the Department for International Trade. The Trade Track will be an opportunity for the UK to work with our G7 partners to shape a bold global vision for economic recovery that sees us build back better together – greener, more prosperous, resilient, and fair. 

“To do so, the Trade Track will focus on four priority areas:

“- WTO reform

“- trade and health

“- digital trade

“- trade and climate policy”

The Chair of the G7 Trade Track released a statement on March 31. The Chair in 2021 is the U.K. Secretary of State for International Trade and President of the Board of Trade and Minister for Women and Equalities, the Rt Hon Elizabeth Truss MP. See G7 Trade Ministers’ Meeting – Chair’s Statement, https://www.g7uk.org/g7-trade-ministers-meeting-chairs-statement/. The statement is copied below.

G7 Trade Ministers’ Meeting – Chair’s Statement – G7 UK Presidency 2021

“Today, the G7 Trade Ministers held their first meeting under the inaugural G7 Trade Track. Trade Ministers underlined the vital role global trade has played in tackling the impacts of the Covid-19 pandemic, welcomed the contribution trade can make to a strong economic recovery, and emphasised the need to build back better. They reaffirmed the importance of the rules-based multilateral trading system and welcomed Dr Ngozi Okonjo-Iweala, the new WTO Director-General, to their meeting.

“The G7 Trade Track has a bold purpose – to make the case globally for free and fair trade. G7 Trade Ministers are convinced that when the world’s leading democratic trading nations unite behind a shared agenda to make the global trading system fairer, more sustainable, and responsive to the needs of our citizens, this is an agenda that partners across the world will be ready to share in and help shape.

“Free and Fair Trade

“G7 Trade Ministers support a global trading system that is free and fair and works for all countries and peoples. This year represents a clear inflection point for the world and the global economic architecture. G7 Trade Ministers recognised the importance of providing the leadership needed to respond to the challenges faced by the multilateral trading system. Trade Ministers expressed their determination to provide the sustained effort and momentum necessary to ensure progress is made in the reform of the WTO to help secure shared prosperity for all. Therefore, G7 Trade Ministers will use this year’s G7 to advance the agenda of the 12th WTO Ministerial Conference and provide vital political momentum to the WTO reform debate. Trade Ministers will explore reforms that can enhance the WTO as a forum for negotiations, recognising the positive role that the plurilateral initiatives have played in engaging a broad spectrum of WTO members. G7 Trade Ministers also acknowledge that important work on transparency, special and differential treatment, and dispute settlement needs to be undertaken in the WTO.

“The multilateral trading system can be a force for good. It has increased competition and economic growth, helped raise living standards, and lifted millions out of poverty. It must serve the needs of all its members and provide the basis for free and fair trade. G7 Trade Ministers recognised that global trade should work for democratic and open-market systems and that these should not be undermined by unfair trade.

“Yet, not all of our citizens have felt the benefits of trade. Moreover, practices that distort markets and competition lead to decreased efficiency and reduced perceptions of fairness and trust in the system. Echoing the G7 Leaders’ Statement at Charlevoix in 2018, G7 Trade Ministers recalled the importance of fostering a truly level playing field. Trade Ministers will discuss the impact market-distorting practices, such as harmful industrial subsidies, including those causing excess capacity in some sectors, are having on our economies and chart a way to address these collectively.

“Modernising Trade

“G7 Trade Ministers believe that the multilateral trading system is in need of reform to reflect changes in the global economy and environment. As the world transitions to net zero, Trade Ministers acknowledged the risk of carbon leakage to the environment and the potential ways of mitigating this. Acknowledging the role of trade in tackling the accelerating climate and biodiversity crisis, Trade Ministers recognised that 2021 will be a crucial year to drive international efforts to address climate change and protect nature, including at the UNFCCC COP26. Trade Ministers will therefore deepen discussions on the nexus between trade and climate and the environment with a focus on identifying opportunities for collaboration and facilitating sustainable supply chains. Additionally, G7 members are committed to reaching a meaningful conclusion in the WTO negotiations of fisheries subsidies – which have a clear impact on sustainability.

“Stressing that trade has to be at the service of citizens, G7 Trade Ministers underlined the importance of advancing women’s economic empowerment through trade, particularly to support the Covid-19 recovery. They shared the view that greater representation of women in trade as leaders, business owners, and fairly compensated workers will ultimately deliver more and better jobs and more growth in our economies. G7 Members will promote deepened studies and more cross-cutting analyses on trade policy and gender equality by international organisations, such as SheTrades Outlook. Recognising the progress that is being made on trade and gender equality at the WTO, Trade Ministers intend to use their next discussions to explore new opportunities to improve the evidence base to support women in trade and discuss their priorities in this area for the next WTO Ministerial Conference.

“G7 Trade Ministers also agreed to further consider the ways in which trade policy can develop to support trade in health products, and increased supply chain resilience, as we work to build back better from Covid-19. The scale and pace of the spread of the virus, and an uneven global recovery, are challenging all our economies. G7 Members also encourage cooperation among governments, manufacturers, and other industry players to identify policies which support ramped-up production and distribution of vaccines.

“Digital Trade

“G7 Trade Ministers recognised the importance of digital trade to growth, innovation, productivity, and prosperity. They recalled the immense opportunities that it offers to our people and our businesses, and they underlined the central role that it can play in the economic recovery from the pandemic. G7 Members are united in their support for open digital markets and their opposition to digital protectionism. As a group of market-based economies governed by the rule of law, they believe that digital markets should be competitive, transparent, and accessible to international trade and investment. They agree on the importance of data free flow with trust, safeguards for consumers and businesses, and digital trading systems that allow goods and services to move seamlessly across borders. G7 Trade Ministers resolve to promote digital trade worldwide and to pursue global governance that is fair and inclusive. They agreed to further develop a set of high-level principles during this Presidency that will guide the G7 approach to digital trade.

“Digital trade remains an important area for the creation of new rules at the WTO. The rules governing digital trade should be responsive to innovation and emerging technologies, so that businesses, consumers, and workers can harness their full potential. G7 Trade Ministers committed to redoubling their efforts to advance the Joint Statement Initiative on E-commerce at the World Trade Organization. They aim to achieve substantial progress by the 12th WTO Ministerial Conference.

“G7 Trade Ministers look forward to strengthening their dialogue and further advancing a shared agenda at their next meeting in May.”

The statement from the Chair was not surprising considering the composition of the G7 and the focus of the members on getting the pandemic under control, reviving economic and trade activities (“building back better), restoring relevance to the WTO by achieving positive developments at the 12th Ministerial Conference and pursuing WTO reform on a host of areas including updating rules to address distortions (e.g., industrial subsidies) not adequately addressed in current agreements, operation of special and differential treatment, transparency, and dispute settlement. Most G7 members also support the Joint Statement Initiatives on a range of topics, including digital trade, domestic services regulation, SMSEs, empowerment of women in trade and gender equality, and trade’s role in addressing the climate crisis.

While some G7 members have different views on specific issues, the opening G7 trade ministers meeting lays out a positive broad-based agenda for having trade help get the world through the pandemic, return to greater prosperity, and address longstanding challenges at the WTO both to relevance in the 21st century and to different economic systems rendering current rules only partially relevant.

Statements by several of the trade ministers who participated add some individual country focus. For example, USTR Amb. Katherine Tai participated in the meeting. A press release from USTR dated March 31 identifies the U.S. views. See USTR, Statement from USTR Spokesman Adam Hodge on Ambassador Katherine Tai’s Participation in the First G7 Trade Ministers Meeting, 03/31/2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/march/statement-ustr-spokesman-adam-hodge-ambassador-katherine-tais-participation-first-g7-trade-ministers

“WASHINGTON – United States Trade Representative Katherine Tai today virtually participated in the G7 Trade
Ministers Meeting hosted by the United Kingdom and chaired by Secretary of State Liz Truss. Ministers were joined in
this meeting by WTO Director General Dr. Ngozi Okonjo-Iweala. This was the first meeting of the G7 Trade Ministers.
Ambassador Tai and other G7 Ministers discussed the challenges facing the global trading system from non-market
forces and the need to work collectively to advance free and fair trade. Dr. Okonjo-Iweala and the Ministers discussed
pathways to achieving meaningful outcomes for the 12th WTO Ministerial Conference scheduled later this year.
Ministers also discussed their plans for future work on digital trade, women’s economic empowerment, and climate
change objectives. Ambassador Tai emphasized the Biden-Harris Administration’s objective to ensure that trade policy
focuses on benefitting workers, in addition to businesses and consumers. The Ministers are united in their desire to
support policies that will facilitate a rapid end to the pandemic and recognize that trade can contribute to a strong and
equitable recovery.”

Similarly, Canadian Minister of Small Business, Export Promotion and International Trade Mary Ng participated in the G7 trade ministers meeting. The following press release was issued on March 31 by the Canadian government. See Government of Canada, Minister Ng participates in first G7 trade and investment ministers’ meeting, March 31, 2021, https://www.canada.ca/en/global-affairs/news/2021/03/minister-ng-participates-in-first-g7-trade-and-investment-ministers-meeting.html

“As the Government of Canada continues to address the COVID-19 pandemic, collaborating with international partners is essential to fighting the virus and ensuring a sustainable and inclusive global economic recovery from the pandemic.

“Today, the Honourable Mary Ng, Minister of Small Business, Export Promotion and International Trade, participated in the first G7 trade and investment ministers’ meeting, which was hosted by the United Kingdom under its G7 presidency for 2021. The ministers agreed to pursue an ambitious G7 trade and investment agenda that responds to the challenges posed by the pandemic and to support an inclusive and sustainable recovery with the WTO at its core.

“Minister Ng welcomed the discussion with Ngozi Okonjo-Iweala, the new WTO director general, on the future of the WTO. The G7 ministers agreed to work together to advance concrete outcomes in advance of the 12th WTO Ministerial Conference in November.

“Pursuing trade and investment policies that support women and Indigenous and racialized communities is key to ensuring Canada’s economic recovery from COVID-19 is inclusive and meaningful. During a session on women’s economic empowerment, Minister Ng highlighted initiatives that Canada has undertaken to support women’s success in international trade. The Minister encouraged G7 members to participate in the implementation of the WTO trade and gender initiative and, as a specific example, encouraged member countries to use the SheTrades Outlook, an interactive policy tool that helps governments put in place policies to improve women’s participation in international trade.

“During the meeting, Minister Ng also emphasized the importance of digital trade and highlighted Canada’s work on a number of initiatives, such as the ongoing WTO negotiations on e-commerce.

“Minister Ng reiterated Canada’s support for the United Kingdom-led G7 work plan to enhance the capacity of the trading system to respond to public health emergencies. Ministers discussed the Ottawa Group’s Trade and Health Initiative, which seeks to strengthen the resilience of global supply chains and facilitate trade in essential medical supplies and vaccines.

“The trade ministers acknowledged the impacts of unfair trade practices on their economies and agreed to work together to address them. Recognizing the important role that trade has in tackling climate change and ensuring a sustainable environment, the ministers agreed to continue their efforts to take action on climate change through initiatives such as the WTO trade and environment sustainability initiative.”

The Canadian press release also provided a quote from Minister Ng:

“’Canada continues to work closely with our international partners to support Canadian businesses, workers and communities as we fight the pandemic and support an inclusive, sustainable economic recovery through rules-based international trade that works for everyone. We will make sure that the interests of Canadians across the country are at the forefront of our discussions as we work toward ensuring a strong, sustainable, and inclusive economic recovery.’

“- Mary Ng, Minister of Small Business, Export Promotion and International Trade”

The press reported reactions within China to the G7 trade ministers meeting with a focus on G7 concerns with addressing reforms to industrial subsidies. See, e.g., South China Morning Post, G7 pressure on China over subsidies ‘doomed to fail’ even as Biden administration gathers coalition, 1 April 2021, https://www.scmp.com/economy/china-economy/article/3128006/g7-pressure-china-over-subsidies-doomed-fail-even-biden (“Trade ministers from the Group of 7 (G7) – the United States, Germany, Britain, France, Canada, Italy and Japan – on Wednesday pledged collective action against ‘harmful industrial subsidies’ without naming China directly. China responded by saying it ‘won’t accept any accusation’ of its trade practice as it ‘has always honoured its commitments since it joined the World Trade Organization (WTO) at the end of 2001.”).

Conclusion

The G7 is a potentially important grouping, particularly to articulate a vision for the future of the multilateral trading system. While the changes in global trade over the last quarter of a century ensure more voices need to be considered than those in the G7 (or those aligned with them), there is no forward movement without them.

The WTO, if a static organization, will continue its slide into irrelevance. The organization suffers a myriad of structural problems which have reduced the effectiveness of all of its core functions. There is a lack of common purpose among the WTO Members. Its rules reflect the world of the 1980s with no significant update in the rules since then.

The pressing global challenges flowing from the pandemic, from climate change and changing technology need a World Trade Organization that is up to date, nimble and driven by an agreed vision to promote sustainable development and greater equitable participation and benefits.

The initial articulation of G7 objectives from trade ministers is a step in the right direction. Time will tell whether the G7 can internally agree on the details of a trade agenda, can translate that into support among a large group of WTO Members and lead to meaningful agreements and reform. The opposition to meaningful reform from China and others within the WTO and the consensus principle of decision making renders it highly unlikely that the WTO will prove up to the needs of the moment. But efforts of the G7 and other groups is critical if a global trading system is to survive. One can only hope for success from the G7 efforts.

“Blowing up the trading system” — Clyde Prestowitz’s suggested way for the world to move forward in light of China’s economic system

The Global Business Dialogue (GBD) publishes periodically “THE TTALK QUOTES”. On March 30, 2021, GBD posted a TTALK Quotes on “CHINA, THE TRADING SYSTEM, AND THE ALTERNATIVES” with a quote from Clyde Prestowitz, ‘[There is] only one alternative – “blowing up the system” or, more politely, creating a new or alternative system.”

The quote is from a Washington Monthly article by Mr. Prestowitz from March 24, 2021 entitled, “Blow Up the Global Trading System, Yes, really. U.S. and international efforts to stop Beijing’s economic onslaught haven’t worked. It’s time for President Biden to go big,” https://washingtonmonthly.com/2021/03/24/blow-up-the-global-trading-system/. Mr. Prestowitz has a new book out, The World Turned Upside Down (Yale University Press, 2021) and some of the recommendations in the Washington Monthly article reflect his thinking from his new book.

While the title is provocative, the concerns expressed are similar to the ones reviewed in Amb. Dennis Shea’s remarks to the Coalition for a Prosperous America and those expressed last year by Mogens Peter Carl that China’s economic system isn’t consistent with the WTO rules and China has no intention of modifying its approach to global trade. See March 29, 2021:  China and the WTO – remarks by Dennis C. Shea to the Coalition for a Prosperous America, https://currentthoughtsontrade.com/2021/03/29/china-and-the-wto-remarks-by-dennis-c-shea-to-the-coalition-for-a-prosperous-america/.

Unlike Mr. Carl’s call for market economy countries to withdraw from the WTO and start a new organization, Mr. Prestowitz proposes in the Washington Monthly article “Reinventing the Globalization System” which involves seven action steps.

The first is for the United States “to impose a Market Adjustment Charge (MAC) on all non-direct investment (not in new means of production) into the United States.” The MAC is explained in his new book (pages 276-277) but is a charge that would vary based on the size and trend of the U.S. trade deficit.

The second step “would be for the International Monetary Fund (IMF) to adopt Keynes’ Bretton Woods proposal that all countries should have balanced trade in the medium to long term.” To achieve this result, a duty would be applied on imports from countries that run persistent trade surpluses.

The third step would be for the United States to seek strong enforcement within the IMF and by the U.S. Department of the Treasury.

The fourth step would be forming a supersized FTA including USMCA, CPTPP and the EU, and open to other market economies. Prestowitz calls this grouping the “Free World Free Trade Agreement”.

The firth step addresses the need for market economies to improve their competitiveness against the state directed and massively subsidized world of China. The step calls for the creation of “a free world high technology leadership project”

The sixth step calls on the U.S. to reorganize government and concentrate resources to support the technology leadership initiative.

The final step involves actions the U.S. can take to spur domestic manufacturing (use of Defense Production Act, curbing corporate lobbying, and review corporate overseas investment plans.

In his book, Mr. Prestowitz has a chapter on actions the U.S. should take to regain its leadership position. It starts with a Market Access Charge, calls for the imposition of a value added tax and a host of actions to ensure the U.S. is “the world’s most competitive economy.” Page 278.

U.S. actions are aimed at improving U.S. competitiveness

A number of the actions Mr. Prestowitz calls for on U.S. competitiveness are similar to actions being introduced today in part 1 of President Biden’s American Jobs Plan (est. cost of $2.5 trillion). See White House Briefing Room, FACT SHEET: The American Jobs Plan, March 31, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/. Excerpts are copied below. The full fact sheet is then embedded.

“While the American Rescue Plan is changing the course of the pandemic and delivering relief for working families, this is no time to build back to the way things were. This is the moment to reimagine and rebuild a new economy. The American Jobs Plan is an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China. Public domestic investment as a share of the economy has fallen by more than 40 percent since the 1960s. The American Jobs Plan will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.

“The United States of America is the wealthiest country in the world, yet we rank 13th when it comes to the overall quality of our infrastructure. After decades of disinvestment, our roads, bridges, and water systems are crumbling. Our electric grid is vulnerable to catastrophic outages. Too many lack access to affordable, high-speed Internet and to quality housing. The past year has led to job losses and threatened economic security, eroding more than 30 years of progress in women’s labor force participation. It has unmasked the fragility of our caregiving infrastructure. And, our nation is falling behind its biggest competitors on research and development (R&D), manufacturing, and training. It has never been more important for us to invest in strengthening our infrastructure and competitiveness, and in creating the good-paying, union jobs of the future.

“Like great projects of the past, the President’s plan will unify and mobilize the country to meet the great challenges of our time: the climate crisis and the ambitions of an autocratic China. It will invest in Americans and deliver the jobs and opportunities they deserve. But unlike past major investments, the plan prioritizes addressing long-standing and persistent racial injustice. The plan targets 40 percent of the benefits of climate and clean infrastructure investments to disadvantaged communities. And, the plan invests in rural communities and communities impacted by the market-based transition to clean energy.”

FACT-SHEET_-The-American-Jobs-Plan-_-The-White-House

Reform of the WTO or a different approach?

The U.S. is looking to push WTO reform and work with trading partners to address challenges posed by China’s economic model. The EU and Japan are similarly looking at WTO reform as a way forward. See, e.g., 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/.

The G7 trade ministers are meeting today. See Reuters, UK trade minister tells G7: We must stop fragmentation of global trade, March 31, 2021, https://www.reuters.com/article/britain-trade-truss-idUSS8N2L708T. The seven G7 countries are Canada, France, Germany, Italy, Japan, the UK and the US (EU participates as a guest). WTO reform is one of the topics being discussed today. The U.S., EU and Japan have been working on potential reforms to the Subsidies Agreement to address the massive industrial subsidies provided by China as well as looking at potential disciplines on state-owned/invested enterprises and forced technology transfer. However, in a consensus system like the WTO, it is hard to imagine meaningful reforms that will address Chinese distortions achieving results within the WTO.

The U.S. is not presently considering a “Free World Free Trade Agreement” as proposed by Mr. Prestowitz. The U.S. is also not proposing pulling out of the WTO as suggested last year by Mogens Peter Carl and entering into a new organization that is limited to market economies. Each of the U.S. and the EU have the ability to act unilaterally if necessary but obviously that is a less desirable approach to global governance.

So it is likely that the U.S., EU, Japan and other leading market economies will continue to seek reform within the WTO but with likely limited results putting pressure on free trade agreements or on plurilateral arrangements to achieve a trade regime acceptable to the major market economies.

Mr. Prestowitz’s article and recent book are well done and raise some interesting ideas for addressing U.S. trade concerns with China. Some of his ideas have been advocated for by others before and have significant potential whether they have much political possibility for adoption. But in a changing global trade environment, his writings are a useful contribution and worth reading by those in trade policy positions.

For the Biden Administration, new trade agreements do not appear to be a short-term objective. Getting control of the pandemic through vaccinations and building back better through the jobs bill are the two major priorities. Trade can contribute to both, but a push for Free World Free Trade Agreement is not likely in the Biden years.

Still China’s economic system and incompatibility with the WTO are major concerns for many countries including the United States. Reform of the WTO would obviously be the best outcome for addressing China’s distortions. While hope spring eternal, the Ministerial Conference in late November 2021 in Geneva will give an idea of whether meaningful WTO reform is likely in the cards in the coming years. Such reform is highly unlikely to happen during the 2020s, if ever.

Mr. Carl’s suggestion of mass withdrawal from the WTO and creation of a new entity of market economies is interesting in addressing the blocking capacity of China but seems improbable because of China’s size and importance. With no major economy having suggested any interest in the idea, it seems implausible in the 2020s, if ever.

Mr. Prestowitz’s idea for a super-FTA of market economies is doable within the WTO and simply depends on majors like the U.S., EU, Japan and others being willing to put in the effort. But the U.S. and EU have not been able to make meaningful progress on an FTA or even harmonization of regulations over recent decades. If past is prologue, it is unlikely that such an undertaking will occur in the 2020s either, if ever.

 As British trade minister Liz Truss is reported to have said to her G7 fellow trade ministers, “We need to reverse the fragmentation of global trade and get the global system and WTO working again, otherwise we risk big countries going their own way and operating outside an agreed set of rules, which always spells trouble.” Reuters, UK trade minister tells G7: We must stop fragmentation of global trade, March 31, 2021, https://www.reuters.com/article/britain-trade-truss-idUSS8N2L708T. China has effectively been going its own way even after joining the WTO at the end of 2001. Actions by the U.S., EU and others in recent years have occasionally been outside of the agreed set of rules as well. So a fourth option is that of the collapse of the global trading system (actually or practically) with a law of the jungle reasserting itself.

Time will tell which direction global trade will take.

Global vaccinations for COVID-19 — continued supply chain and production issues and a new wave of infections in many countries delay greater ramp up for some until late in the second quarter of 2021

The world has witnessed the unprecedented development of a number of vaccines in record time to deal with the COVID-19 pandemic. The development has been the result of widespread cooperation in sharing information and the funding in part by governments and early orders for hundreds of millions of doses if vaccines proved efficacious and safe. In roughly one year since the virus was declared a pandemic by the WHO, individual vaccines have been produced and authorized by one or more governments (some by as many as 70 along with WHO approval).

According to the Financial Times COVID-19 vaccine tracker, as of March 25, nearly 490 million vaccine shots have been administered around the world (based on data from 166 locations). See Financial Times, Covid-19 vaccine tracker: the global race to vaccinate, 25 March 2021, https://ig.ft.com/coronavirus-vaccine-tracker/?areas=gbr&areas=isr&areas=usa&areas=eue&cumulative=1&populationAdjusted=1. The companies with approved vaccines have been ramping up production at their own and at licensed facilities in other countries. Because companies are racing to put in place 3-4 times the global capacity for all vaccines (3.5 billion doses) to produce COVID-19 vaccines (10-14 billion doses by the end of 2021) and because there are complex supply chains and production processes for the new vaccines, there have been various delays which have occurred both at manufacturers and at suppliers. This has been true in the U.S., in the EU, in India and other producing countries. While countries and producers are working on solutions, shortages of certain materials exist and can reduce production of finished vaccines globally.

While the WHO, GAVI, CEPI and UNICEF have set up COVAX to get vaccines to a total of 192 countries, including 92 low- and middle-income countries where materials will be supplied at discounted prices or for free and have a target of two billion doses to participating countries in 2021, there is an early reliance on AstraZeneca’s vaccine whether produced by AstraZeneca or through license by the Serum Institute (SII) in India, the world’s largest vaccine producer.

Unfortunately, many countries are going through a new wave of COVID-19 infections which puts pressure on governments to secure sufficient supplies to address domestic demand. See, e.g., European Centre for Disease Prevention and Control, COVID-19 situation update worldwide, as of week 11, updated 25 March 2021, https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases (shows total new reported infections going up globally for the fourth week after a sharp decline after New Year’s). Countries showing large numbers of cases over the last two weeks (whether increases or decreases) include Ethiopia (21,227), Kenya (12,083), Libya (12,852), South Africa (17,646), Argentina (91,023), Brazil (995,861), Canada (48,021), Chile (77,561), Colombia (63,417), Ecuador (18,223), Mexico (66,683), Paraguay (26,252), Peru (98,323), United States (830,346), Uruguay (19,512), Bangladesh (19,938), India (416,683), Indonesia (80,522), Iran (119,383), Iraq (67,344), Jordan (109,594), Lebanon (43,964), Pakistan (38,371), Philippines 969,382), United Arab Emirates (29,506), Austria (39,842), Belgium (50,670), Bulgaria (43,115), Czechia (142,042), Estonia (20211), France (378,370), Germany (162,032), Greece (32,005), Hungary (111,929), Italy (308,890), Moldova (19,82), Netherlands (83,797), Poland (272,046), Romania (70,295), Russian Federation (133,24), Serbia (65,689), Spain (67,833), Sweden (61,666), Turkey (232,705), Ukraine (147,456), United Kingdom (78,063). While many countries do not produce COVID-19 vaccines, the list of countries includes many in the EU as well as Brazil, the United States and India. Brazil’s production of COVID-19 vaccines is not expected to start until May. Below I review developments on vaccination roll-outs in the United States, the European Union and India.

Vaccination roll-out in the U.S., EU and India — three important COVID-19 vaccination production areas

Under the Biden Administration, the United States has drastically improved its performance on COVID-19 vaccinations with 129.3 million vaccinations given by March 24 and with the President announcing his Administration’s revised goal of 200 million shots in arms in his first 100 days in office (April 29). See Financial Times, Biden doubles vaccine goal to 200m in first 100 days, 25 March 2021, https://www.ft.com/content/a1accbdf-0010-426c-9442-feb73b5c8a1d. While the U.S. focus is on getting the U.S. population vaccinated as the first priority, the U.S. has agreed to “loan” 1.5 million doses of AstraZeneca’s vaccine to Canada and 2.5 million doses to Mexico. The U.S., following a leader’s remote meeting of the Quad (U.S., Japan, India, Australia), agreed to work with the other Quad partners to produce one billion doses in India of a vaccine by the end of 2022 from a U.S. company that would be paid for by Japan and the U.S. and would receive distribution support from Australia for countries in the Indo-Pacific region. See March 12, 2021, COVID-19 vaccines – U.S., Japan, India and Australia agree to one billion doses for Indo-Pacific countries, https://currentthoughtsontrade.com/2021/03/12/covid-19-vaccines-u-s-japan-india-and-australia-agree-to-one-billion-doses-for-indo-pacific-countries/.

The European Union, a major producing location for COVID-19 vaccines and various inputs and a major exporter, has had rollout problems flowing from production problems at AstraZeneca’s EU facilities, concerns by many EU members on whether the vaccine from AstraZeneca was safe (small number of blot clot problems in those vaccinated) and other issues. See New York Times, Where Europe Went Wrong in Its Vaccine Rollout, and Why, March 20, 2021, https://www.nytimes.com/2021/03/20/world/europe/europe-vaccine-rollout-astrazeneca.html; Financial Times, Nordic nations hold off on AstraZeneca jab as scientists probe safety, 21 March 2021, https://www.ft.com/content/0ef3a623-f3a2-4e76-afbd-94a915b24ad5. With vaccination rates in the EU far behind the U.K. and the U.S. and a number of other countries, this has led to significant internal pressures to ensure that manufacturers were honoring contracts with the EU and has led to two temporary regulations (and an extension) giving EU members authority to stop exports outside of the EU (and excluding the shipments to COVAX low-and middle-income countries). See March 5, 2021, 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, https://currentthoughtsontrade.com/2021/03/05/covid-19-vaccines-france-supports-italys-blockage-of-a-shipment-to-australia-while-australia-has-asked-the-eu-to-permit-the-shipment-australia-will-have-its-own-production-of-astrazeneca-produc/; European Commission, Commission strengthens transparency and authorisation mechanism for exports of COVID-19 vaccines, 24 March 2021, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1352; European Commission, 24.3.2021 C(2021) 2081 final COMMISSION IMPLEMENTING REGULATION (EU) …/… of 24.3.2021, https://ec.europa.eu/commission/presscorner/detail/en/ip_21_1352; European Commission, Commission extends transparency and authorisation mechanism for exports of COVID-19 vaccines, 11 March 2021, https://ec.europa.eu/commission/presscorner/detail/en/IP_21_1121. Australia had a shipment stopped by Italy and the EC has been raising concerns in the United Kingdom.

In recent days, Indian producer Serum Institute has notified a number of customers that their orders would be delayed several months. GAVI COVAX has been notified as well, with 40 million doses in April and 50 million in May apparently unlikely to ship. Press articles attribute the delays to the needs within India, though SII has suggested delays are also due to availability issues on certain inputs. The Indian government claims it is simply adjusting schedules in light of internal needs and is not imposing an export ban per se. See, e.g., BBC News, India coronavirus: Why have vaccine exports been suspended?, 25 March 2021, https://www.bbc.com/news/world-asia-india-55571793; Wall Street Journal, India Suspends Covid-19 Vaccine Exports to Focus on Domestic Immunization, March 25, 2021, https://www.wsj.com/articles/india-suspends-covid-19-vaccine-exports-to-focus-on-domestic-immunization-11616690859#:~:text=An%20Indian%20government%20official%20said,of%20the%20government’s%20vaccine%20program.&text=On%20Tuesday%2C%20the%20government%20said,to%20those%20older%20than%2045; Times of India, India has not banned Covid-19 vaccine exports, 25 March 2021, https://timesofindia.indiatimes.com/india/india-has-not-banned-covid-19-vaccine-exports-sources/articleshow/81693010.cms.

Conclusion

Much of the anticipated ramp up of COVID-19 vaccine production will be happening over the coming months, such that there should be dramatically greater vaccine availability in the coming months. That doesn’t help governments or populations waiting for vaccines. or that are going through a significant ramp up in infections. The pharmaceutical industry and major groups got together earlier this month to explore where the bottlenecks are in ramping up production. See March 12, 2021, The 8-9 March  “Global C19 Vaccine Supply Chain and Manufacturing Summit”, https://currentthoughtsontrade.com/2021/03/12/the-8-9-march-global-c19-vaccine-supply-chain-and-manufacturing-summit-efforts-to-ramp-up-production/ It is unclear the extent to which governments and industry are working together to solve bottlenecks in supply, to facilitate production ramp up, share experiences in reusing safely some critical materials that are in short supply, etc. During these critical months, greater cooperation in solving problems and facilitating expansion of production is needed and hopefully is occurring. Export restrictions have and will occur under various guises, reflecting internal political pressures. In the coming months and certainly by the third quarter of 2021, there should be large volumes of vaccine doses above and beyond what has been contracted by COVAX that will be available for use around the world. Time is obviously of the essence. Cooperation to solve supply chain bottlenecks and speed ramp-ups is the best short term option for speeding getting past the pandemic globally.

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When human rights violations create trade distortions — the case of China’s treatment of the Uyghurs in Xinjiang

Earlier this week, the EU added a series of individuals and companies to its sanctions list including Chinese officials and entities involved in the alleged extreme human rights abuses of Uyghurs in Xinjiang, as well as others in Russia, Libya and the Democratic People’s Republic of Korea. See European Council, EU imposes further sanctions over serious violations of human rights around the world, 22 March 2021, https://www.consilium.europa.eu/en/press/press-releases/2021/03/22/eu-imposes-further-sanctions-over-serious-violations-of-human-rights-around-the-world/; Official Journal of the European Union, L 99 I, Council Implementing Regulation (EU) 2021/478 of 22 March 2021 implementing Regulation (EU) 2020/1998 concerning restrictive measures against serious human rights violations and abuses, Vol. 64, pages 1-12, 22 March 2021, https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=OJ:L:2021:099I:FULL&from=EN. The Official Journal regulation has as one of the bases of concern for a number of countries where individuals or entities are included on the sanctions list the following, “The Union remains deeply concerned about serious human rights violations and abuses in different parts of the world, such as torture, extrajudicial killings, enforced disappearances or systematic use of forced labour committed by individuals and entities in China, the Democratic People’s Republic of Korea (DPRK), Libya, Eritrea, South Sudan and Russia.” The regulation includes a page per person/entity being added. Some of the description of why WANG Junzheng has been added to the list is copied below.

“As Party Secretary and Political commissar of the XPCC since 2020, Wang Junzheng is involved in overseeing all policies implemented by the XPCC. In this position, he is responsible for serious human rights violations in China, in particular large-scale arbitrary detentions and degrading treatment inflicted upon Uyghurs and people from other Muslim ethnic minorities, as well as systematic violations of their freedom of religion or belief, linked, inter alia, to the XPCC’s implementation of a large-scale surveillance, detention and indoctrination programme targeting Uyghurs and people from other Muslim ethnic minorities.

“He is also responsible for the XPCC’s systematic use of Uyghurs and people from other Muslim ethnic minorities as a forced workforce, in particular in cotton fields. As Deputy Secretary of the Party Committee of the XUAR since 2020, Wang Junzheng is involved in overseeing all the security policies implemented in Xinjiang, including the aforementioned programme targeting Uyghurs and people from other Muslim ethnic minorities. As Secretary of the Political and Legal Affairs Committee of the XUAR (February 2019 to September 2020), Wang Junzheng was responsible for maintaining internal security and law enforcement in the XUAR. As such, he held a key political position in charge of overseeing and implementing the aforementioned programme.”

On the same day, the United States, United Kingdom and Canada issued a joint statement announcing sanctions on individuals and/or an entity in China involved with the alleged human rights abuses of Uyghurs in Xinjiang. See U.S. Department of State press release, Joint Statement on Xinjiang, March 22, 2021, https://www.state.gov/joint-statement-on-xinjiang/. The body of the joint message is copied below.

“We, the Foreign Ministers of Canada and the United Kingdom, and the United States Secretary of State, are united in our deep and ongoing concern regarding China’s human rights violations and abuses in Xinjiang. The evidence, including from the Chinese Government’s own documents, satellite imagery, and eyewitness testimony is overwhelming. China’s extensive program of repression includes severe restrictions on religious freedoms, the use of forced labour, mass detention in internment camps, forced sterilisations, and the concerted destruction of Uyghur heritage.

“Today, we have taken coordinated action on measures, in parallel to measures by the European Union, that send a clear message about the human rights violations and abuses in Xinjiang. We are united in calling for China to end its repressive practices against Uyghur Muslims and members of other ethnic and religious minority groups in Xinjiang, and to release those arbitrarily detained.

“We underline the importance of transparency and accountability and call on China to grant the international community, including independent investigators from the United Nations, journalists, and foreign diplomats, unhindered access to Xinjiang.

“We will continue to stand together to shine a spotlight on China’s human rights violations. We stand united and call for justice for those suffering in Xinjiang.”

Australia and New Zealand, while not imposing sanctions themselves, added their voices of concern over the alleged human rights abuses in Xinjiang of the Uyghurs. See Minister of Foreign Affairs Australia, Joint statement on Human Rights Abuses in Xinjiang, 23 March 2021, https://www.foreignminister.gov.au/minister/marise-payne/media-release/joint-statement-human-rights-abuses-xinjiang. The Joint Statement is copied below.

“The Australian and New Zealand Governments today reiterate their grave concerns about the growing number of credible reports of severe human rights abuses against ethnic Uighurs and other Muslim minorities in Xinjiang.

“In particular, there is clear evidence of severe human rights abuses that include restrictions on freedom of religion, mass surveillance, large-scale extra-judicial detentions, as well as forced labour and forced birth control, including sterilisation.

“Australia and New Zealand welcome the measures announced overnight by Canada, the European Union, the United Kingdom and the United States. We share these countries’ deep concerns, which are held across the Australian and New Zealand communities.

“Since 2018, when reports began to emerge about the detention camps in Xinjiang, Australia and New Zealand have consistently called on China in the United Nations to respect the human rights of the Uighur people, and other religious and ethnic minorities.

“Today, we underscore the importance of transparency and accountability, and reiterate our call on China to grant meaningful and unfettered access to Xinjiang for United Nations experts, and other independent observers.”

While China argues that their treatment of the Uyghurs is an internal matter, the allegations of serious human rights abuses have raised widespread international condemnation and increasing use of sanctions. The sanctions, however, typically are limited to freezing assets (if any) of individuals or entities in the sanctioning country, banning travel to the country imposing the sanctioning, etc.

Trade Implications

While allegations of human rights violations do not necessarily carry trade distortion implications, the case of the forced labor of Uighurs in Xinjiang clearly does. Xinjiang produces some 80% of the cotton grown in China, much of it produced by forced labor according to reports. As China is a major producer of textile and apparel products and a major exporter of the same, the distortions in trade flows should be obvious. Foreign cotton will have trouble competing in China with cotton produced with forced labor. Garment producers who don’t use the Chinese cotton will face distortions as competing against garments where a significant input has been obtained at artificially low prices. Some countries (e.g., the United States and Canada) have laws which permit them to prevent imports of products made with forced labor, although the breadth of the actions taken to date are typically quite limited.

In prior posts, I looked at the large number of products produced around the world with forced labor or with child labor and also looked specifically at the Chinese treatment of the Uyghurs reviewing a number of publications and reports. See Child labor and forced labor in cotton production — is there a current WTO mandate to identify and quantify the distortive effects?, January 25, 2021, ttps://currentthoughtsontrade.com/2021/01/25/child-labor-and-forced-labor-in-cotton-production-is-there-a-current-wto-mandate-to-identify-and-quantify-the-distortive-effects/ ; Forced labor and child labor — a continued major distortion in international trade for some products, January 24, 2021, https://currentthoughtsontrade.com/2021/01/24/forced-labor-and-child-labor-a-continued-major-distortion-in-international-trade-for-some-products/.

To ramp up pressure on China to reform its treatment of the Uyghurs, the United States, European Union, United Kingdom, Canada, Australia, New Zealand and all other countries concerned about the human rights should coordinate a broad-based denial of imports from China or from other countries where cotton from Xinjiang is part of the product until such time as the treatment of the Uyghurs has been corrected.

Seafood obtained from illegal, unreported, and unregulated fishing — U.S. International Trade Commission report on estimated imports into the U.S.

For twenty years, Members of the World Trade Organization have been negotiating disciplines on fisheries subsidies to help curb illegal, unreported and unregulated fishing (IUU fishing). Achieving an agreement is critical to meeting the United Nations Sustainable Development Goal 14.6. See, e.g., WTO, 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. The WTO Members had hoped to conclude negotiations in 2020 and are working to conclude the negotiations by the 12th Ministerial Conference, now scheduled for the week of November 29, 2021 in Geneva. 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.

On December 19, 2019, the Chairman of the U.S. House of Representatives Committee on Ways and Means and the Chairman of the Trade Subcommittee of Ways and Means submitted a letter to the U.S. International Trade Commission requesting an investigation into IUU fishing and its effects on the U.S. industry. The text of the request is copied below.

“We are writing today to request that the U.S. International Trade Commission (USITC) conduct an investigation of the potential economic effects on U.S. fishermen of competition with illegal, unreported, and unregulated (IUU) seafood imports. IUU seafood includes products obtained in contravention of fisheries management regulations or in violation of labor laws. Trade in IUU seafood products includes not only IUU catch that is sent directly to end markets, but also IUU raw material inputs that are further processed into aquaculture feed or seafood products for human consumption.

“Up to 31 percent of the global catch of fish reportedly comes from IUU fishing, at an estimated value of more than $23 billion per year. IUU fishing contributes to the overexploitation of fish stocks, threatens the livelihoods of coastal communities, jeopardizes food security, and harms marine ecosystems. IUU fishing also creates unfair competition for U.S. fishermen as imports account for 90 percent of U.S. seafood consumption. China plays an enormous role in the global production and trade of seafood and is the largest seafood trade partner of the United States. China also has been ranked as worst among 152 coastal countries based on the prevalence of IUU fishing and the country’s response to it.

“To better understand the size, scope, supply chains, pricing pressures, and potential economic effects of this problem, we request that the US ITC conduct an investigation, and prepare a report, pursuant to section 332(g) of the Tariff Act of 1930. Based on available information, we request that the Commission’s report provide, to the extent practicable:

“• A review of the existing data and literature on the prevalence of IUU products in the U.S. import market, and an overview of international mechanisms for monitoring and enforcement to address IUU fishing;

“• A description of the size and structure of the U.S. commercial fishing industry;

“A description of major global producers of IUU products, including but not limited to China, and country practices related to IUU production and exports.

“• An analysis of the extent to which IUU product is imported into the United States, as well as major U.S. import sources and global supply chains of such products; and

“• A quantitative analysis of the economic impact of IUU imports on U.S. commercial fishermen and U.S. commercial fishing production, trade, and prices.

“We request that the Commission deliver the report by 12 months from the date of this letter. As we intend to make the report available to the public, we request that confidential business information not be included in the report. Your assistance in this matter is greatly appreciated.

“Sincerely,

“Richard E. Neal, Chairman
“Earl Blumenauer, Chairman, Trade Subcommittee”

The U.S. International Trade Commission released its report,which is dated February 2021, last week. See USITC, Seafood Obtained via Illegal, Unreported, and Unregulated Fishing: U.S. Imports and Economic Impact on U.S. Commercial Fisheries, Inv. 332-575, Publ. 5168 (February 2021). The request letter is included in the report at Annex A.

On March 18, 2021 Chairmen Neal and Blumenauer released a statement including statements from Oceana and from the World Wide Fund for Nature (WWF). See U.S. House of Representatives Committee on Ways and Means, NEAL, BLUMENAUER STATEMENT ON THE U.S. INTERNATIONAL TRADE COMMISSION’S REPORT “SEAFOOD OBTAINED VIA ILLEGAL, UNREPORTED, AND UNREGULATED FISHING: U.S. IMPORTS AND ECONOMIC IMPACT ON U.S. COMMERCIAL FISHERIES”, March 18, 2021, https://waysandmeans.house.gov/media-center/press-releases/neal-blumenauer-statement-us-international-trade-commission-s-report. The press release is copied below.

WASHINGTON, DC—Today, the U.S. International Trade Commission released their findings pursuant to a Tariff Act of 1930 section 332 investigation requested by Chairman Richard E. Neal (D-MA) and Trade Subcommittee Chairman Earl Blumenauer (D-OR) on the economic impact of illegal, unreported, and unregulated (IUU) seafood, including the use of forced labor, on the U.S. fishing industry.  The report found that the U.S. imported $2.4 billion worth of illegal seafood in 2019 and that addressing the illegal imports would create U.S. jobs, protect U.S. consumers and benefit U.S. fishers by an estimated $60.8 million.

“’Far too much illegal seafood is making its way onto our dinner plates and more must be done,’ said Chairman Neal. ‘By building on what we fought to include in USMCA, enhancing the tracing of our seafood supply chains, and cracking down on IUU fishing practices, we can better protect our oceans and ultimately give Americans the peace of mind that they are eating safe, legal seafood.’

“’When people go to the grocery store, they want to know that the seafood is safe and legally caught, responsibly sourced, and honestly labeled. Unfortunately, too much illegal seafood is currently making its way into the country, undermining our hardworking U.S. fishing industry and putting consumers at risk,’ Blumenauer said. ‘It’s clear that we need stronger enforcement standards to protect individuals, workers, and fishing habitats.’

“Chairman Neal and Trade Subcommittee Chairman Blumenauer are joined by Oceana and WWF in recognizing the study.

“’Illegal, unreported and unregulated fishing not only wreaks havoc on fisheries and ocean wildlife, but also undermines domestic fishers and seafood consumers. The United States has advanced programs to combat IUU fishing and seafood fraud, but it’s clear that more needs to be done. The U.S. must expand Seafood Import Monitoring Program to all seafood, trace fish from boat to plate and expand transparency of fishing to help stop IUU products from entering the U.S. and competing with legally sourced seafood,’ said Beth Lowell, Deputy Vice President of U.S. Campaigns at Oceana.

Michele Kuruc, Vice President of Ocean Policy at WWF noted that, ‘this report reminds us that the ramifications of illegal fishing go far beyond the health of our oceans. It depletes our oceans, fuels labor and human rights abuses, and leaves our domestic producers at an economic disadvantage. People are harmed, economies are hurt, and our oceans and planet are in peril.   Eradicating illegal fishing requires a whole of government approach, as our current definitions, processes and efforts have far-reaching limitations. The good news is we have the tools, but they need to be strengthened to get the job done.  The U.S. needs to expand the species covered by our current monitoring program. We need to track all imported species, not just a small group, to truly tackle this issue and protect our oceans, foster economic growth and empower people who rely on oceans for food and income.’”

Thus, the U.S., despite having some provisions to address IUU fishing, still accounts via imports for an estimated 10% of global IUU fishing ($2.4 billion of an estimated $23 billion global total).

The USITC Report

The U.S. International Trade Commission report is 468 pages including Annexes. The report is embedded below.

ITC-report-on-illegal-fishing

While many countries have some part of their marine capture or imports from other countries that are IUU, the USITC report focuses on certain countries and identifies the types of practices that are considered to result in marine capture being considered IUU.

“There are many fishing practices that can constitute an IUU violation. Often, a vessel may fish in an area where it is not authorized. Vessels may also fish during seasons in which particular fishing grounds are closed. IUU fishing also includes harvesting in excess of quotas set by fishery management authorities or misreporting the volume of landings to those authorities. Fishing with disallowed gear types or methods, or in violation of environmental restrictions such as those concerning bycatch, also constitute IUU fishing. Labor violations that have been widely documented in segments of the fishing industry include forced labor, human trafficking, child labor, and physical abuse of workers on board fishing vessels.” USITC Publ. 5168 at 11-12.

Below are some tables from the report which show the estimated volume of IUU imports from major sources of seafood imports into the United States and then some detail on the basis of IUU fishing from a subset of those countries. The tables are taken from pages 114, 115, 463, 14 and 15 of the USITC report respectively.

The USITC report covers a lot of ground and reviews existing literature and studies and provides its methodology for both estimating the share of imports that are IUU as well as the modeling used to estimate economic effects on domestic industry. It is clear that many countries contribute to the IUU problem. Some countries including the U.S. and the EU have tools available to deal with IUU imports and that such tools are viewed as helpful but not totally fit for purpose based on limited scope, at least in the United States.

Interest in the issue from the U.S. Congress and a focus of the Biden Administration on addressing both environmental- and labor- related issues implies that the U.S. will likely be looking for ways to beef up enforcement of the import monitoring program on seafood.

While the report doesn’t address fisheries subsidies, the report should nonetheless be helpful to WTO Members engaged in the fisheries subsidies negotiations. The report adds dimension to the importance of WTO Members reaching an ambitious agreement on fisheries subsidies as the challenges of IUU fishing are not only environmental in nature but also go to fairness in competition.

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.

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.

W675-1

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.

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).

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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.

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.


Roadmap for a Renewed U.S.-Canada Partnership — Implications for WTO initiatives

On February 23, 2021 President Biden and Prime Minister Trudeau had a virtual meeting to review a wide range of topics and released an agreed “Roadmap for a Renewed U.S.-Canada Partnership”. Major topics addressed included (1) combating COVID-19, (2) building back better (i.e., economic recovery after the pandemic), (3) accelerating climate ambitions, (4) advancing diversity and inclusion, (5) bolstering security and defense and (6) building global alliances. A number of these topics are relevant to the work of the World Trade Organization (ongoing or possible). 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/. This post reviews briefly some of the issues in the roadmap that resonate more broadly in a global trade context.

Combating COVID-19

For example, on combating COVID-19, several of the paragraphs in the roadmap review working together to help ensure equitable access to vaccines through COVAX. Whether sufficient vaccines can be made available to low- and middle-income countries is a matter of concern to many WTO Members including some who have been pushing for waiving TRIPS Agreement obligations during the pandemic. Many developed countries have viewed there being adequate flexibility within the TRIPS Agreement to address the present pandemic and have pointed to the collective efforts of the WHO, GAVI and CEPI in setting up COVAX to procure billions of doses of vaccines both for countries needing assistance and for other countries wanting to acquire vaccines through COVAX. The big issue for COVAX has been adequate funding. The U.S. is donating $2 billion in the near term and another $2 billion over the rest of 2021 and 2022. Canada has also made pledges of support to COVAX. Thus, the roadmap is both supportive of global efforts to get vaccines to countries in need and likely supportive of opposing efforts to waive TRIPS rights and obligations during the pandemic. Some excerpts from the combating COVID-19 section are copied below.

“The top priority of the President and the Prime Minister is to end the COVID-19 pandemic. They agreed to strengthen comprehensive and cross-sectoral efforts to control the pandemic, collaborate on public health responses, and build resilience against future outbreaks.

‘The Prime Minister and the President committed to working closely together to defeat the virus, including by surging the health and humanitarian response to the global pandemic, responding to new variants, following expert advice, and supporting global affordable access to and delivery of COVID-19 vaccines, including through the COVAX Facility.

“The leaders emphasized their strong support for the multilateral institutions that are on the front lines of COVID-19 response, including the World Health Organization (WHO) and UN development agencies, and committed to rapidly fulfilling national pledges to COVAX.”

While not addressed in the roadmap document, both Canada and the U.S. at the WTO have been supportive of not imposing restrictions on agricultural exports and through the G-20 have been supportive of limiting the role of export restraints on medical goods. There is discussion in the building back better section of strengthening “Canada-U.S. supply chain security” which may have implications for whether some actions relevant to medical goods are adopted that will diversify supply or encourage more production within the U.S. and Canada.

The interest by the United States under the Biden Administration in supporting multilateral organizations like the WTO may also suggest that the U.S. will now be more amenable to working with the Ottawa Group (of which Canada is a member) on the Trade and Health Initiative that was introduced last December. See Government of Canada, Minister Ng announces tabling of Ottawa Group’s Trade and Health Initiative at WTO General Council, December 17, 2020, https://www.canada.ca/en/global-affairs/news/2020/12/minister-ng-announces-tabling-of-ottawa-groups-trade-and-health-initiative-at-wto-general-council.html (“Through this Trade and Health Initiative, Canada and the other 12 Ottawa Group member nations are calling for further cooperation among all WTO members to strengthen global supply chains and facilitate the flow of essential medicines and medical supplies, including vaccines, amid the current crisis. The Trade and Health Initiative identifies a range of actions that members are encouraged to adopt. These include implementing trade-facilitating measures in the areas of customs and services, limiting export restrictions, temporarily removing or reducing tariffs on essential medical goods, and improving transparency overall.”); December 18, 2020, The WTO ends the year with General Council and Dispute Settlement Body meetings, https://currentthoughtsontrade.com/2020/12/18/the-wto-ends-the-year-with-general-council-and-dispute-settlement-body-meetings/; November 27, 2020, The Ottawa Group’s November 23 communication and draft elements of a trade and health initiative, https://currentthoughtsontrade.com/2020/11/27/the-ottawa-groups-november-23-communication-and-draft-elements-of-a-trade-and-health-initiative/.

Building back better (recovery from the pandemic)

Much of the section on building back better addresses the collective needs to support groups that have been disproportionately affected by the pandemic including “women, youth, underrepresented groups and indigenous peoples.” Assistance to such groups and to small and medium-sized enterprises is an important component of building back better. It also reflects present WTO focus on helping women and micro-, small- and medium-sized businesses better participate in the global economy and in international trade in particular. Actions by Canada and the U.S. will be pursued in part under existing commitments within the USMCA but also will be supportive of WTO initiatives and UN Sustainable Development Goals.

Other agreed steps by Canada and the U.S. in this section deal with building supply chain for battery development and production which is consistent with the leaders’ objective of advancing reductions in greenhouse gases. The U.S. and Canada also encourage “international regulatory cooperation” to enhance “economic competitiveness” “while maintaining high standards of public health, safety, labor, and environmental protection.” As reviewed below, trade and climate change/environment are likely to be of greater interest within the WTO moving forward. The WTO SPS and TBT Agreements also encourage international regulatory cooperation to facilitate trade. Thus, U.S.-Canada actions are supportive of existing rights and obligations and leading the way on future needs.

Accelerating Climate Ambitions

With the U.S. having rejoined the Paris Agreement since President Biden took office, the U.S. position is now more aligned with Canada and with that of the European Union in terms of needing “to increase the scale and speed of action to address the climate crisis and better protect nature.” Of particular interest is the commitment to action against countries who don’t take adequate action to reduce greenhouse gases .

“The President also restated his commitment to holding polluters accountable for their actions. Both the President and the Prime Minister agreed to work together to protect businesses, workers and communities in both countries from unfair trade by countries failing to take strong climate action.”

The language in the roadmap suggests that the U.S. and Canada will be interested in exploring options similar to those being prepared by the European Union on a duty or tax on imported products produced with higher levels of greenhouse gases to prevent leakage. The incoming Director-General has acknowledged that Members are looking at how to make trade help address the climate crisis. See APPOINTMENT OF THE NEXT DIRECTOR-GENERAL, STATEMENT OF THE DIRECTOR-GENERAL ELECT DR. NGOZI OKONJO-IWEALA TO THE SPECIAL SESSION OF THE WTO GENERAL COUNCIL, 15 February 2021, JOB/GC/250 (16 February 2021)(para. 1.14, “1.14. We should also work to ensure that the WTO best supports the green and circular economy and addresses more broadly the nexus between trade and climate change. Trade and environmental protection can be mutually reinforcing, both contributing to sustainable development. It will be important for Members to reactivate and broaden the negotiations on environmental goods and services. This would help promote trust and encourage Members to explore further ways in which trade can contribute positively to an improved climate. Care must, however, be taken to ensure that any disciplines are not used arbitrarily or as a disguised restriction on trade, and that they take into account the need for developing countries to be assisted to transition to the use of greener and more environmentally friendly technologies.”); February 16, 2021, Special Session of the General Council at WTO appoints Dr. Ngozi Okonjo-Iweala as the seventh Director-General, https://currentthoughtsontrade.com/2021/02/16/special-session-of-the-general-council-at-wto-appoints-dr-ngozi-okonjo-iweala-as-the-seventh-director-general/.

Building Global Alliances

While much broader than just trade, the commitment to multilateralism announced by President Biden and Prime Minister Trudeau included “firm commitment to the United Nations, G7 and G20, as well as NATO, the WTO, and the Five Eyes community.” Both Canada and the United States support significant reform at the WTO. One can expect closer collaboration between the U.S. and Canada on many reform initiatives at the WTO.

This section of the roadmap also addresses the need to jointly address China. “They also discussed ways to more closely align our
approaches to China, including to address the challenges it presents to our collective interest and to the international rules-based order. This includes dealing with its coercive and unfair economic practices, national security challenges, and human rights abuses, while cooperating with China on areas where it is in our interest, such as climate change.” WTO reform to be meaningful will have to have elements that will address the noncoverage of various actions by state-capital countries like China that distort global trade flows, create massive excess capacity, force technology transfer, limit transparency and market access in fact. While some efforts can be through consultations by the U.S. with other trading partners like Canada and the EU, multilateral reform is also critical for the functioning of the global trading system.

Conclusion

President Biden’s efforts are restoring strong relationships with our neighbors and renewed engagement with multilateral organizations has been apparent during the first five weeks of his Presidency. Yesterday’s virtual meeting between President Biden and Prime Minister Trudeau reflects the strong bonds between the U.S. and Canada. The roadmap presents areas of joint interest and future activity to deepen our close partnership. The roadmap also has a number of signals of likely U.S.-Canada cooperation in global trade and on WTO reform which should attract support from a number of other major trading partners at the WTO.

The roadmap and joint press statements are embedded below.

Roadmap-for-a-Renewed-U.S.-Canada-Partnership-_-The-White-House

Remarks-by-President-Biden-and-Prime-Minister-Trudeau-of-Canada-in-Joint-Press-Statements-_-The-White-House

COVID-19 agricultural fall out — higher prices for many consumers and greater food insecurity

The World Bank’s President David Malpass in a February 1st posting on Voices flagged the challenges for many of the world’s poorest people flowing from the COVID-19 pandemic — higher food prices, greater hunger, more people pushed into extreme poverty. See World Bank blog,COVID crisis is fueling food price rises for world’s poorest, February 1, 2021, https://blogs.worldbank.org/voices/covid-crisis-fueling-food-price-rises-worlds-poorest. The post was originally published in the Guardian. The post is copied in its entirety below (emphasis in the original webpost).

“Over the last year, COVID-19 has undone the economic, health and food security of millions, pushing as many as 150 million people into extreme poverty. While the health and economic impacts of the pandemic have been devastating, the rise in hunger has been one of its most tangible symptoms. 

Income losses have translated into less money in people’s pockets to buy food while market and supply disruptions due to movement restrictions have created local shortages and higher prices, especially for perishable food.  This reduced access to nutritious food will have negative impacts on the health and cognitive development of COVID-era children for years to come.

“Global food prices, as measured by a World Bank food price index, rose 14% last year. Phone surveys conducted periodically by the World Bank in 45 countries show significant percentages of people running out of food or reducing their consumption. With the situation increasingly dire, the international community can take three key actions in 2021 to increase food security and help prevent a larger toll on human capital.

“The first priority is enabling the free flow of food. To avoid artificial shortages and price spikes, food and other essential goods must flow as freely as possible across borders.  Early in the pandemic, when perceived shortages and panic generated threats of export bans, the international community helped keep food trade flows open. Credible and transparent information about the state of global food inventories – which were at comfortable levels pre-COVID – along with unequivocal free-trade statements from the G20, World Trade Organization, and regional cooperation bodies helped reassure traders, and led to helpful policy responses. Special rules for agriculture, food workers and transport corridors restored supply chains that had been briefly disrupted within countries.

“We need to remain vigilant and avoid backsliding into export restrictions and hardened borders that make food – and other essentials – scarce or more costly.

“The second priority is bolstering social safety nets. Short-term social safety nets offer a vital cushion for families hit by the health and economic crises. In Ethiopia, for example, households that experienced problems in satisfying their food needs initially increased by 11.7 percentage points during the pandemic, but participants in our long-running Productive Safety Net program were shielded from most of the negative effects.

“The world has mounted an unprecedented social protection response to COVID-19. Cash transfers are now reaching 1.1 billion people, and innovative delivery mechanisms are rapidly identifying and reaching new groups, such as informal urban workers. But ‘large scale’ is not synonymous with ‘adequate’. In a review of COVID-19 social response programs, cash transfer programs were found to be:

“–Short-term in their duration – lasting just over three months on average

“–Small in value – an average of $6 (£4.30) per capita in low-income countries

“–Limited in scope – with many in need remaining uncovered

“The pandemic has reinforced the vital imperative of increasing the world’s investments in social protection systems. Additional measures to expedite cash transfers, particularly via digital means, would also play an important role in reducing malnutrition.

“The third priority is enhancing prevention and preparedness. The world’s food systems endured numerous shocks in 2020, from economic impacts on producers and consumers to desert locust swarms and erratic weather.  All indicators suggest that this may be the new normal. The ecosystems we rely on for water, air and food supply are under threat. Zoonotic diseases are on the rise owing to growing demographic and economic pressures on land, animals and wildlife.

“A warming planet is contributing to costlier and more frequent extreme weather events. And as people pack into low-quality housing in urban slums or vulnerable coastal areas, more are living in the path of disease and climate disaster.

“Development gains can be wiped out in the blink of an eye. Our experience with hurricanes or seismic events shows that it is more effective to invest in prevention, before a catastrophe strikes. That’s why countries need adaptive social protection programs – programs that are connected to food security early warning systems and can be scaled up in anticipation of shocks.

“The time is long overdue to shift to practices that safeguard and increase food and nutrition security in ways that will endure. The to-do list is long and urgent. We need sustained financing for approaches that prioritize human, animal and planetary health; restore landscapes and diversify crops to improve nutrition; reduce food loss and waste; strengthen agricultural value chains to create jobs and recover lost incomes; and deploy effective climate-smart agriculture techniques on a much greater scale.

“The World Bank Group and partners are ready to help countries reform their agriculture and food policies and redeploy public finance to foster a green, inclusive, and resilient recovery.

Focusing on food security would address a basic injustice: almost one in 10 people live in chronic hunger in an age of food waste and plenty.  This focus would also strengthen our collective ability to weather the next storm, flood, drought, or pandemic – with safe and nutritious food for all.”

Food insecurity is an issue for all countries although most pressing for the poorest countries

The challenges noted by the World Bank President also face most other countries. For example, in the United States, there has been a massive increase in the number of people getting food from food banks and estimates are that one in seven Americans needs food assistance. Feeding America, The Impact of Coronavirus on Food Insecurity, October 2020, https://www.feedingamerica.org/research/coronavirus-hunger-research (“Combining analyses at the national, state, county, and congressional district levels, we show how the number of people who are food insecure in 2020 could rise to more than 50 million, including 17 million children.”) The challenges for schools not being able to have in school education has complicated the challenge in the United States as millions of children receive food from their schools but need alternative sources when schools are not able to provide in school classes. See, e.g., Brookings Institution, Hungry at Thanksgiving: A Fall 2020 update on food insecurity in the U.S., November 23, 2020, https://www.brookings.edu/blog/up-front/2020/11/23/hungry-at-thanksgiving-a-fall-2020-update-on-food-insecurity-in-the-u-s/ (reviews the increase in food insecurity and the various safety net programs in the U.S. attempting to address).

World Trade Organization involvement in addressing the problem

The World Trade Organization is directly involved in addressing the first priority identified by World Bank President Malpass — enabling the free flow of food. However, the WTO also monitors government support efforts and has the ability to be tackling trade and environment issues which could affect the third priority by reducing climate change.

WTO Members under WTO rules can impose export restraints under certain circumstances and in the first half of 2020, a number of members imposed export restraints on particular agricultural products and many imposed export restraints on certain medical goods. At the same time, the lockdown of countries had significant effects on the movement of goods and people. Many WTO Members have urged limiting such restraints and the WTO Secretariat has monitored both restraints imposed, when such restraints have been lifted (if they have), and trade liberalization efforts to speed the movement of important goods. See, e.g., WTO, COVID-19 and world trade, https://www.wto.org/english/tratop_e/covid19_e/covid19_e.htm; WTO, COVID-19 AND AGRICULTURE: A STORY OF RESILIENCE, INFORMATION NOTE, 26 August 2020, https://www.wto.org/english/tratop_e/covid19_e/agric_report_e.pdf; WTO, COVID-19: Measures affecting trade in goods, updated as of 1 February 2021, https://www.wto.org/english/tratop_e/covid19_e/trade_related_goods_measure_e.htm. The August paper on COVIDE-19 and Agriculture is embedded below.

agric_report_e

There have been a number of proposals by certain WTO Members to forego export restraints on agricultural products during the pandemic. None have been acted upon by the membership as a whole, but the communications often reflect commitments of certain Members to keep agricultural markets open during the pandemic. See, e.g., RESPONDING TO THE COVID-19 PANDEMIC WITH OPEN AND PREDICTABLE TRADE IN AGRICULTURAL AND FOOD PRODUCTS, STATEMENT FROM: AUSTRALIA; BRAZIL; CANADA; CHILE; COLOMBIA; COSTA RICA; ECUADOR; EUROPEAN UNION; GEORGIA; HONG KONG, CHINA; JAPAN; REPUBLIC OF KOREA; MALAWI; MALAYSIA; MEXICO; NEW ZEALAND; NICARAGUA; PARAGUAY; PERU; QATAR; KINGDOM OF SAUDI ARABIA; SINGAPORE; SWITZERLAND; THE SEPARATE CUSTOMS TERRITORY OF TAIWAN, PENGHU, KINMEN AND MATSU; UKRAINE; UNITED ARAB EMIRATES; UNITED KINGDOM; UNITED STATES; AND URUGUAY, WT/GC/208/Rev.2, G/AG/30/Rev.2, 29 May 2020. The document is embedded below.

208R2-3

More can and should be done, including a WTO-wide agreement to forego agricultural export restraints during the current pandemic or future pandemics. However, there are strong objections to any such limits from a number of WTO Members including large and important countries like China, India and South Africa.

Indeed, efforts to get agreement at the December 2020 General Council meeting that countries would not block agricultural exports to the UN’s World Food Programme for humanitarian purposes was blocked by a number of countries. While 79 WTO Members in January 2021 provided a joint pledge not to prevent agricultural exports to the UN World Food Programme, it is a sign of the sensitivity of food security to many countries that a very limited humanitarian proposal could not obtain the agreement of all WTO Members in a period of hightened need by many of the world’s poorest countries. See January 23, 2021, WTO and the World Food Programme – action by 79 Members after a failed December effort at the General Council, https://currentthoughtsontrade.com/2021/01/23/wto-and-the-world-food-programme-action-by-79-members-after-a-failed-december-effort-at-the-general-council/.

Conclusion

The COVID-19 pandemic has extracted a huge cost from the world economy, has pushed tens of millions of people into extreme poverty, has cost hundreds of millions people employment (full or partial), is complicating the education of the world’s children with likely long lasting effects, has exposed potential challenges to achieving global cooperation on a range of matters including the desirability of limiting or not imposing export restraints on agricultural and medical goods.

While the focus of countries and the media in the last several months has shifted to access to vaccines and ensuring greater equitable distribution of such vaccines at affordable prices, there remains much that needs to be done to better address food insecurity during the pandemic. International organizations like the World Bank, IMF and WTO, countries, businesses and NGOs need to se that both core issues are addressed in the coming months.


Early trade action by Biden Administration — reinstating aluminum duties on imports from the United Arab Emirates

On February 1, 2021, President Biden revoked an action by the Trump Administration on aluminum products from the United Arab Emirates (UAE). The UAE’s exports of aluminum had been subject to additional duties as a result of an investigation of global imports of aluminum under Section 232 of the Trade Expansion Act of 1962, as amended, where the Secretary of Commerce found that imports were a threat to national security and President Trump had imposed additional duties of 10%. Countries with security relationships with the United States were able to seek alternative approaches to addressing U.S. concerns.

The United States and the UAE have a security relationship of importance to the U.S. Specifically, the United States had worked with the UAE in its efforts to secure greater recognition for the state of Israel. The Abraham Accords Peace Agreement: Treaty of Peace, Diplomatic Relations and Full Normalization Between the United Arab Emirates and the State of Israel was agreed by the UAE and Israel on August 13, 2020, signed at the White House on September 15, 2020 and ratified by the two governments in mid-October 2020.

Shortly before leaving office, on January 19, 2021, President Trump through Proclamation 10139 indicated that tariffs would be lifted on imports of aluminum from the UAE with an effective date of 12:01 a.m. on February 3, 2021. In their place, quotas at “historic levels” were agreed to on aluminum exports to the U.S. from the UAE. The Trump Proclamation is found at 86 FR 6,825-31 (January 25, 2021) and is embedded below.

2021-01711

By proclamation on February 1, 2021, President Biden revoked President Trump’s Proclamation 10139. The discussion contained in President Biden’s Proclamation indicates that his Administration views Section 232 as an important tool, that the aluminum industry is critical to U.S. national security and that the tariffs that were imposed on aluminum were having the desired effect prior to the pandemic and were worth maintaining. The Biden Proclamation is reproduced below. While it is not yet published in the Federal Register, the Proclamation can be found on the White House website in the briefing room. See A Proclamation on Adjusting Imports of Aluminum Into the United States, February 1, 2021, https://www.whitehouse.gov/briefing-room/presidential-actions/2021/02/01/a-proclamation-on-adjusting-imports-of-aluminum-into-the-united-states/.

BRIEFING ROOM

A Proclamation on Adjusting Imports of Aluminum Into the United States

FEBRUARY 01, 2021 • PRESIDENTIAL ACTIONS

ADJUSTING IMPORTS OF ALUMINUM INTO THE UNITED STATES

BY THE PRESIDENT OF THE UNITED STATES OF AMERICA

A PROCLAMATION

  1. Proclamation 10139 of January 19, 2021 (Adjusting Imports of Aluminum Into the United States), amended Proclamation 9704 (Adjusting Imports of Aluminum Into the United States), as amended, with respect to tariffs on certain imports of aluminum articles proclaimed under section 232 of the Trade Expansion Act, as amended (19 U.S.C. 1862). Proclamation 10139 provides that those amendments will not take effect until 12:01 a.m. on February 3, 2021.
  2. I consider it is necessary and appropriate in light of our national security interests to maintain, at this time, the tariff treatment applied to aluminum article imports from the United Arab Emirates (UAE) under Proclamation 9704, as amended, as they are currently in effect as of this date. Accordingly, and as provided for in clause (6) of Proclamation 10139, I am terminating the modifications contained in that proclamation before they take effect.
  3. Proclamation 9704 applied tariffs to help ensure the economic viability of the domestic aluminum industry — an industry that the Secretary of Commerce had previously identified as essential to our critical industries and national defense. Because robust domestic aluminum production capacity is essential to meet our current and future national security needs, Proclamation 9704 aimed to revive idled aluminum facilities, open closed smelters and mills, preserve necessary skills, and maintain or increase domestic production by reducing United States reliance on foreign producers.
  4. In my view, the available evidence indicates that imports from the UAE may still displace domestic production, and thereby threaten to impair our national security. Proclamation 9704 authorized the Secretary of Commerce to grant exclusions from the aluminum tariffs based on specific national security considerations or if specific imported aluminum articles were determined not to be produced sufficiently in the United States, such that the imports would not diminish domestic production. Tellingly, there have been 33 such exclusion requests for aluminum imported from the UAE, covering 587,007 metric tons of articles, and the Secretary of Commerce has denied 32 of those requests, covering 582,007 metric tons. This indicates the large degree of overlap between imports from the UAE and what our domestic industry is capable of producing.
  5. Since the tariff on aluminum imports was imposed, such imports substantially decreased, including a 25 percent reduction from the UAE, and domestic aluminum production increased by 22 percent through 2019, before the coronavirus pandemic began. In light of that history, I believe that maintaining the tariff is likely to be more effective in protecting our national security than the untested quota described in Proclamation 10139.
  6. Section 232 of the Trade Expansion Act of 1962, as amended, authorizes the President to adjust the imports of an article and its derivatives that are being imported into the United States in such quantities or under such circumstances as to threaten to impair the national security.
  7. Section 604 of the Trade Act of 1974, as amended (19 U.S.C. 2483), authorizes the President to embody in the Harmonized Tariff Schedule of the United States the substance of statutes affecting import treatment, and actions thereunder, including the removal, modification, continuance, or imposition of any rate of duty or other import restriction.
    Now, Therefore, I, Joseph R. Biden Jr., President of the United States of America, by the authority vested in me by the Constitution and the laws of the United States of America, including section 232 of the Trade Expansion Act of 1962, as amended, section 301 of title 3, United States Code, and section 604 of the Trade Act of 1974, as amended, do hereby proclaim that Proclamation 10139, including the Annex, is revoked.
    IN WITNESS WHEREOF, I have hereunto set my hand this
    first day of February, in the year of our Lord two thousand twenty-one, and of the Independence of the United States of America the two hundred and forty-fifth.

JOSEPH R. BIDEN JR.

___________________________________________________________

Pending WTO disputes; UAE does not have a pending dispute with the U.S.

While China, India, the European Union, Norway, the Russian Federation, Switzerland and Turkey all have ongoing panel proceedings at the WTO challenging the U.S. imposition of duties on steel and aluminum pursuant to Section 232 investigations, the UAE is not a country that has filed a request for consultations on the additional duties on aluminum on its exports to the United States. See WT/DSB 544 (China), WT/DSB547 (India), WT/DSB/548 (European Union), WT/DSB/552 (Norway), WT/DS554 (Russian Federation), WT/DS556 (Switzerland) and WT/DS564 (Turkey); challenges by Canada and Mexico were withdrawn after agreement with the United States (WT/DS550 (Canada) and WT/DS551 (Mexico). The panel reports were to go to parties in the fall of 2020 and released to the public once translations into the official languages was accomplished. But no report has been released to date. With the impasse on the Appellate Body, it is unclear if the Biden Administration will opt to file appeals should the panel reports not recognize the U.S. national security concerns. Thus, absent a decision by the Biden team, should it lose the WTO cases and not appeal, to eliminate the additional duties on imports from all countries, the UAE’s exports will continue to face the additional 10% duties for the foreseeable future.

Broader interest in Biden Administration approach to Section 232

A recent article in Politico reviews contact by the EU with the Biden team last week seeking an immediate end to tariffs on imports from the EU of both steel and aluminum with a corresponding withdrawal of EU retaliatory tariffs if accomplished. As noted in the Politico article, the tariffs are supported by steel producers, unions (e.g., the USW has many workers in both the steel and aluminum industries) and the primary aluminum producers. Politico, Biden, in first trade move, reimposes a Trump tariff, February 1, 2021, https://www.politico.com/news/2021/02/01/biden-aluminum-tariff-uae-464794.

Conclusion

It is unlikely that the U.S. will agree to withdraw the 232 duties at the present time. The Biden team doesn’t have its trade people in place; there are pending WTO disputes; the underlying problems of global excess capacity in both steel and aluminum continue on with no resolution in sight. The main driver of the excess capacity has been China (though others have contributed). There are no WTO rules that permit effective addressing of such problems, and China has largely ignored calls by its trading partners to address the problem in a meaningful manner.

Still the reversal of President Trump’s January 19, 2021 Proclamation is an interesting first step in the trade arena by the Biden Administration to emphasize that restoring economic health to the U.S. economy is an important component of his starting game plan (along with meaningfully addressing the pandemic). Trade issues will likely be seen through that prism even as the U.S. works within multilateral organizations and with allies on a host of issues of common interest and concern.

The EU’s export authorization requirement for COVID-19 vaccines — contrary to their oft repeated position of maintaining open markets during the pandemic

If one ever needed confirmation that WTO Members can easily fall out of supporting open markets and working together during a global crisis, the European Union’s actions over the last week to come up with an implementing regulation “making the exportation of certain products subject to the production of an export authorization” provide a glaring example.

Faced with the receipt of fewer doses of vaccines by the three manufacturers approved (with one only approved last week) for distribution within the EU, the EU faced harsh criticism from member states over the inadequate supplies of vaccines in the December – February period to vaccinate their populations. Harsh criticism was also reflected in press coverage. See, e.g., New York Times, Vaccine Shortages Hit E.U. in a Setback for Its Immunization Race, January 27, 2021, https://www.nytimes.com/2021/01/27/world/europe/europe-covid-vaccinations.html; Der Spiegel, Europe’s Vaccine Disaster, Commission President Ursula von der Leyen Seeking to Duck Responsibility, 29 January 2021, https://www.spiegel.de/international/europe/europe-s-vaccine-disaster-commission-president-ursula-von-der-leyen-seeking-to-duck-responsibility-a-1197547d-6219-4438-9d69-b76e64701802; Financial Times, Shortage of coronavirus shots heaps pressure on European leaders, 29 January 2021, https://www.ft.com/content/fe851440-abcb-43e0-a7c9-a86a05d275db.

The response was to resort to a form of export restraints on vaccines and inputs for vaccines where the European Union and its member states would decide whether shipments to certain third countries (largely wealthier countries around the world) would be allowed. Some statements made by the European Commission and the implementing regulation are embedded below.

CELEX_32021R0111_EN_TXT

Commission_statement_on_the_vaccine_export_authorisation_scheme

Opening_remarks_by_Executive_Vice-President_Valdis_Dombrovskis_at_the_press_conference_on_the_transparency_and_authorisation_mechanism_for_exports_of_COVID-19_vaccines

Opening_remarks_by_Commissioner_Stella_Kyriakides_at_the_press_conference_on_the_transparency_and_authorisation_mechanism_for_exports_of_COVID-19_vaccines

Questions_and_Answers__Transparency_and_authorisation_mechanism_for_exports_of_COVID-19_vaccines-1

The action of the European Union last week is in sharp contrast to the joint initiative from the Ottawa Group, of which the EU is a member. In a post last November, I reviewed a text put forward by the Ottawa Group which called for limiting the use of export restraints during the pandemic. See November 27, 2020, The Ottawa Group’s November 23 communication and draft elements of a trade and health initiative, https://currentthoughtsontrade.com/2020/11/27/the-ottawa-groups-november-23-communication-and-draft-elements-of-a-trade-and-health-initiative/. Several excerpts from the earlier post are provided below.

“The Ottawa Group agreed to put forward a communication seeking action by WTO Members. Each of Canada and the EU (and likely other members) put out press releases. See, e.g., Government of Canada, November 23, 2020, Minister Ng hosts successful ministerial meeting of the Ottawa Group on WTO reform, https://www.canada.ca/en/global-affairs/news/2020/11/minister-ng-hosts-successful-ministerial-meeting-of-the-ottawa-group-on-wto-reform.html; European Commission, Directorate-General for Trade, 23 November 2020, Ottawa Group proposes a global Trade and Health Initiative, https://trade.ec.europa.eu/doclib/press/index.cfm?id=2215&title=Ottawa-Group-proposes-a-global-Trade-and-Health-Initiative.

“The Canadian press release states in part, ‘As countries face a rise in COVID-19 cases, it is essential that governments minimize disruptions to trade flows in essential medical supplies. Today, members of the Ottawa Group took important steps toward a proposed WTO Trade and Health Initiative, which identifies short-term actions to strenghten supply chains and ensure the free flow of medicines and medical supplies.’

“Similarly the European Commission press release stated that –

“‘Today the Ottawa Group, a group of 13 like-minded World Trade Organisation (WTO) partners including the EU, agreed today on an initiative, calling on the WTO members to increase their cooperation and work toward enhanced global rules to facilitate trade in essential medical goods. The agreement took place as an outcome of the Ottawa Group Ministerial meeting, hosted virtually by Minister Mary Ng of Canada.

“‘The Ottawa Group members called for immediate actions in response to the coronavirus crisis such as exercising a restraint in using any export restrictions, implementing trade-facilitating measures in the area of customs and services, as well as improving transparency.'”

Needless to say, the reaction from trading partners to the imposition of export controls on vaccines was swift and negative. See, e.g., Financial Times, EU faces global criticism over curbs on vaccine exports, 31 January 2021, https://www.ft.com/content/5c15d7ea-aaf6-46f4-924e-30f168dd14dd (“Brussels faces an international backlash over its new controls on vaccine exports as European Commission president Ursula von der Leyen struggles to quell a firestorm over the EU’s handling of vaccine shortages. Canada and Japan raised concerns over export rules requiring manufacturers to obtain permission before shipping Covid-19 jabs outside the EU. South Korea also warned governments against a grab for more vaccines than they need.”); BBC News, Coronavirus: WHO criticises EU over vaccine export controls, 30 January 2021, https://www.bbc.com/news/world-europe-55860540. Because the EU action seemed largely aimed at discontent with news from the British-Swedish company AstraZeneca’s announcement of a sharp contraction in likely shipments to the EU in the first quarter, the Commission’s initial draft of the implementing regulation had the EU creating problems for the Brexit agreement in terms of inspecting goods flowing from Ireland and Northern Ireland to prevent circumvention of products to the U.K. The EC retreated almost immediately on that front. See, e.g., NPR, EU Reverses Move To Restrict Export Of COVID-19 Vaccines To Northern Ireland, January 30, 2021, https://www.npr.org/sections/coronavirus-live-updates/2021/01/30/962454276/eu-reverses-move-to-restrict-export-of-covid-19-vaccines-to-northern-ireland (“The European Union reversed a brief decision to try to restrict the export of COVID-19 vaccines across the border from Ireland into Northern Ireland. European vaccination campaigns have been struggling as supplies of vaccines on the continent have run low. The decision to invoke an emergency protocol of the Brexit deal was seen as an effort to keep supplies from going from the EU to Britain. But within hours of the decision, which could have put checks on the border between the EU member the Republic of Ireland and British-controlled Northern Ireland, Irish and British officials condemned the move.”).

One concern for the global trading system from the EU action, of course, is retaliatory or mirror actions by trading partners. Such concerns are real. See, e.g., Politico, UK weighs vaccine export restrictions, January 29, 2021, https://www.politico.eu/article/uk-weighs-coronavirus-vaccine-export-restrictions/ (“The U.K. government has sought legal advice on preventing coronavirus vaccines or their ingredients being exported, suggesting that ministers are actively considering countermeasures they could deploy if other countries start restricting cross-border movements of vaccines.”).

The WHO and WTO have been advocating for cooperation among nations and businesses to ensure that all peoples are able to be vaccinated in a timely and cost affordable way. The phrase, “no one is safe until all are safe” typifies the call and is supported by research that indicates global GDP will be seriously restricted if that approach is not followed. See January 27, 2021, Recent WTO report on services trade and January 2021 International Monetary Fund World Economic Outlook Update — the future growth depends on vaccinations of peoples around the world, https://currentthoughtsontrade.com/2021/01/27/recent-wto-report-on-services-trade-and-january-2021-international-monetary-fund-world-economic-outlook-update-the-future-growth-depends-on-vaccinations-of-peoples-around-the-world/ (“The WHO’s Director-General references a report from the International Chamber of Commerce Research Foundation. The report and a press release can be accessed here: ICC, The Economic Case for Global Vaccinations, https://iccwbo.org/publication/the-economic-case-for-global-vaccinations/. The press release from the ICC describes the report as follows. ‘A study commissioned by the International Chamber of Commerce (ICC) Research Foundation has found that the global economy stands to lose as much as US$9.2 trillion if governments fail to ensure developing economy access to COVID-19 vaccines.'”).

The worrying actions by the European Union and the continued struggle to get vaccines to the world’s poorest countries led to a joint statement today by the WTO’s four Deputy Directors-General calling for heightened cooperation to get vaccines to all peoples of the world. WTO press release, WTO DDGs call for heightened cooperation on vaccine availability, 1 February 2021, https://www.wto.org/english/news_e/news21_e/ddgra_01feb21_e.htm. (“‘The pandemic is a global problem. This challenge calls for heightened international cooperation, including ensuring the global availability of vaccines. Recalling the joint statement by the Directors-General of the WHO and WTO on 20 April 2020, we call upon Members to work together towards making vaccines available to all. Moreover, the war against the pandemic can only be won when universal coverage in vaccination is achieved.’”). The press release includes a link to the 20 April 2020 joint statement by the Directors-General of the WHO and WTO (embedded below).

WTO-_-2020-News-items-Heads-of-WTO-WHO-cite-importance-of-open-trade-in-ensuring-flow-of-vital-medical-supplies

As the world enters the month of February, there are 69 countries that report vaccinating at least some people by the end of January. The list, number of vaccinations and number of vaccinations per 100 people are tracked by the Financial Times in its “Covid-19 vaccine tracker: the global race to vaccinate” last updated on February 1, 2021. https://ig.ft.com/coronavirus-vaccine-tracker/. While there are many vaccines in late stage of trials or going through approval processes by the WTO or individual countries, the world is a long way from ensuring equitable access to vaccines at affordable prices at the beginning of February. Hopefully, with production ramp up and more vaccines approved in the coming months, that situation will change by the second quarter of 2021.

Conclusion

While export restraints are not prohibited by the WTO, the world has struggled during the COVID-19 pandemic to keep markets open and ensure availability of medical products to all nations. The EU had early challenges with export restraints that member states were imposing on medical goods including personal protective equipment. However, the EU has attempted to provide leadership in limiting those restraints and supporting the COVAX mechanism for getting vaccines to the poorest countries as well as others participating in the COVAX approach.

The combination of a greater than expected second surge of COVID-19 cases in the fall and the rapid spread of more contagious variants in the last several months has posed significant challenges to many countries but including those within the EU. Some internal challenges and different approaches to vaccine contracting led the EU to sign contracts later and to approve vaccines for use later than some other countries. With manufacturing challenges for a number of suppliers, the EU has found itself in a situation where member states were extremely unhappy with the inability to get more people vaccinated sooner. The European Commission’s efforts to improve its vaccine situation has generated a great deal of negative press, led to the imposition of export restraints that could lead to a significant breakdown in supply chains and potential retaliation by trading partners adversely affected and harms the EU’s efforts to be a leader for global unity in addressing the pandemic.

The WTO Informal Ministerial of January 29, 2021 — hope for progress at the WTO in 2021

Switzerland typically hosts an informal ministerial meeting of WTO trade ministers on the sidelines of the World Economic Forum’s January Davos event. This year both were handled remotely.

The informal ministerial was summarized in ten points by the Swiss Confederation President Guy Parmelin at the end of the event. President Parmelin’s statement is available here, https://www.newsd.admin.ch/newsd/message/attachments/65098.pdf, and is copied below.

Virtual Informal WTO Ministerial Gathering, 29 January 2021

Personal Concluding Remarks by the Chair, President of the Swiss Confederation and Head of the Federal Department for Economic Affairs, Education and Research, Guy Parmelin, Switzerland

“29 Ministers and high officials representing a broad spectrum of the WTO membership attended this year’s Informal World Trade Organization (WTO) Ministerial Gathering in virtual format. In concluding and with warm thanks to all participants for their contributions, I would like to summarise the main points from our discussions as follows:

“• Ministers stressed the urgency of the swift appointment of a new WTO Director-General as well as the confirmation of the date and venue of the 12th Ministerial Conference (MC12).

“• Ministers reiterated their determination to maintain a credible multilateral trading system and to restore a climate of mutual trust.

“• Ministers expressed their concerns about the enormous social and economic impact of the COVID-19 crisis. They highlighted the relevance of trade and the role of the WTO in containing the pandemic and promoting recovery. Many Ministers underlined the importance of ensuring the development of as well as an equitable and affordable access to medical goods, including vaccines. They addressed ways and means to achieve these goals, including the implementation of measures facilitating trade, the role of intellectual property and transparency.

“• Ministers regretted that the negotiations on fisheries subsidies could not be completed in accordance with the end-2020 deadline foreseen in SDG 14.6. In light of the significance of this process for the sustainability of global fisheries, Ministers concurred that a comprehensive and effective agreement on fisheries subsidies should be concluded as soon as possible. Ministers agreed to step up efforts with a view to finding mutually acceptable solutions consistent with all the elements of the negotiating mandate.

“• Ministers highlighted the importance of restoring a fully functional WTO dispute settlement system, which is a key pillar of the rules-based multilateral trading system.

“• Many participants argued for further progress in agricultural trade policy reform at MC12 and asked for an outcome on domestic support and other issues. The issues of public stockholding and the special safeguard mechanism were highlighted by several Ministers.

“• Many Ministers called for tangible outcomes, by MC12, on the Joint Statement Initiatives. Inter alia finalizing the process on Services Domestic Regulation and making substantial progress on E-commerce and Investment Facilitation as well as on Trade and Women’s Economic Empowerment.

“• The need to reform the WTO was widely acknowledged. A number of Ministers insisted on advancing diverse issues related to the special and differential treatment of developing and least developed countries. Some participants proposed to adjust WTO rules to present-day economic and competitive conditions.

“• Several Ministers supported new initiatives launched in response to global challenges such as the structured discussions on Trade and Environmental Sustainability.

“• Ministers reaffirmed their commitment to engage in the preparations for MC12 in order to advance key issues.”


The participants at this year’s informal ministerial included officials from Argentina, Australia, Brazil, Canada, Chad (coordinator for LDC Group), Chile, China, Egypt, European Union, India, Indonesia, Jamaica (Coordinator ACP Group), Japan, Kazakhstan, Kenya, Korea, Mauritius (Coordinator African Group), Mexico, New Zealand, Norway, Russian Federation, Saudi Arabia, Singapore, South Africa, Switzerland (Chair), Thailand, Turkey, United Kingdom, United States and three officials with WTO roles — H.E. Mr. David Walker (New Zealand), WTO General Council Chair; H.E. Mr. Santiago Wills (Colombia), WTO Chair of the Negotiating Group on Rules, H.E. Mr. Alan Wolff, WTO Deputy Director-General. The full list with titles is embedded below.

List-of-participants-at-virtual-informal-ministerial-1-29-2021-65099

The good news for the informal ministerial was the position taken by the United States representative who reportedly indicated that the United States was actively reviewing the issue of the next Director-General and was intent on actively working on WTO reform. See, e.g., Inside U.S. Trade’s World Trade Online, Biden administration strikes ‘constructive’ tone in first word on WTO approach, January 29, 2021, https://insidetrade.com/daily-news/biden-administration-strikes-%E2%80%98constructive%E2%80%99-tone-first-word-wto-approach; Politico, Biden administration joins call for ‘swift appointment’ of new WTO head, January 29, 2021, https://www.politico.com/news/2021/01/29/biden-world-trade-organization-463820. Under the Trump Administration, the United States had blocked the formation of consensus around Dr. Ngozi Okonjo-Iweala based on the U.S. view that Dr. Okonjo-Iweala did not have a sufficient trade background. See, e.g., January 26, 2021, Letter from variety of former U.S. officials to President Biden urges U.S. support for Dr. Ngozi Okonjo-Iweala as next WTO Director General, https://currentthoughtsontrade.com/2021/01/26/letter-from-variety-of-former-u-s-officials-to-president-biden-urges-u-s-support-for-dr-ngozi-okonjo-iweala-as-next-wto-director-general/. Hopefully, the current review of the issue by the Biden Administration, even ahead of President Biden’s trade team being confirmed by the U.S. Senate, will result in the U.S. joining the support for Dr. Okonjo-Iweala, permitting the WTO to approve a next Director-General.

It was also reported that the United States, consistent with the Biden Administration’s focus on the COVID-19 pandemic and climate change, expressed interest in promoting recovery from the COVID-19 pandemic and concluding an ambitious fisheries subsidies agreement. See Inside U.S. Trade’s World Trade Online, Biden administration strikes ‘constructive’ tone in first word on WTO approach, January 29, 2021, https://insidetrade.com/daily-news/biden-administration-strikes-%E2%80%98constructive%E2%80%99-tone-first-word-wto-approach. Fisheries subsidies negotiations have been going on for some twenty years, and many Members have remained more concerned with keeping their subsidies in place than agreeing to disciplines that would create conditions for sustainable fishing going forward. The Interest in the Biden Administration in working within the WTO on joint steps to promote recovery from the pandemic is different from the approach pursued by the Trump Administration which didn’t want to look at actions possible within the WTO (other than limits on export restraints on agricultural goods) while the world was dealing with the pandemic. The U.S. statement should mean more interest in exploring issues like those raised by the Ottawa Group. See November 27, 2020, The Ottawa Group’s November 23 communication and draft elements of a trade and health initiative, https://currentthoughtsontrade.com/2020/11/27/the-ottawa-groups-november-23-communication-and-draft-elements-of-a-trade-and-health-initiative/.

Other issues flagged in the Swiss President’s concluding remarks are issues of particular interest to some or many countries but not topics of clear agreement. For example, while it is likely that the United States will look for ways to resolve its concerns about longstanding problems in the WTO’s dispute settlement system, particularly around the Appellate Body, it is unlikely that there will be a swift resolution of the U.S. concerns, and hence there will likely be a continued impasse for at least much of 2021 on the return of a functioning two-stage dispute settlement system.

Similarly on domestic support in agriculture and other agriculture issues flagged, certain WTO Members have not supported further liberalization in agriculture while pushing for limits on domestic subsidies and rollback of liberalization commitments undertaken in the Uruguay Round. It is unlikely that there will be forward movement on these issues without greater balance in terms of tariff reductions on major agricultural products. Moreover, as noted in a recent post, other major distortions in agriculture that are not presently identified as domestic subsidies include widespread use of child and forced labor on many agricultural products. See January 25, 2021, Child labor and forced labor in cotton production — is there a current WTO mandate to identify and quantify the distortive effects?, https://currentthoughtsontrade.com/2021/01/25/child-labor-and-forced-labor-in-cotton-production-is-there-a-current-wto-mandate-to-identify-and-quantify-the-distortive-effects/; January 24, 2021, Forced labor and child labor – a continued major distortion in international trade for some products, https://currentthoughtsontrade.com/2021/01/24/forced-labor-and-child-labor-a-continued-major-distortion-in-international-trade-for-some-products/. Such practices should be quantified and the level of potential distortion identified so WTO Members can decide how to address them in ongoing agriculture negotiations.

Progress is being made on Joint Statement Initiatives including e-commerce, services domestic regulation, investment facilitation and women’s empowerment. An open issue for these and topics in the sphere of trade and the environment (e.g., environmental goods agreement) is whether benefits provided by participants will be made available on an MFN basis or limited to participants, with the option of other Members to join in the future. See January 18, 2021, Revisiting the need for MFN treatment for sectoral agreements among the willing, https://currentthoughtsontrade.com/2021/01/18/revisiting-the-need-for-mfn-treatment-for-sectoral-agreements-among-the-willing/. For many Members liberalization could be speeded up if benefits in sectoral agreements go to those participating only while leaving the door open for other Members to join later when they see the value for them.

And on the important topic of WTO reform beyond the items listed above, there is little current agreement on how to deal with industrial subsidies and other practices that lead to massive global excess capacity, or on how to address access to special and differential treatment and many other areas of importance to some or many WTO Members.

Deputy Director-General Alan Wolff provided a statement during the virtual informal ministerial urging WTO Members to make 2021 a year of accomplishments. The WTO press release can be found here. WTO News, DDG Wolff urges WTO ministers to address the pandemic and make 2021 a year of action, 29 January 2021, https://www.wto.org/english/news_e/news21_e/igo_29jan21_e.htm. DDG Wolff’s statement is copied below.

“My thanks to our Swiss hosts and to President Parmelin both for his remarks today and for his very thoughtful address on the occasion of the 25th anniversary celebration of the WTO last November.

“Ministers, you can make 2021 a year of substantial accomplishments at the WTO.

“There has already been a beginning.  In the first action of the year, Members accounting for most of the world’s agricultural exports committed to refrain from imposing export restrictions on purchases made by the World Food Program.

“The anticipated appointment of a new Director-General will bring needed leadership in moving toward concrete results.  But she can succeed only with your active engagement.

“I urge you not to wait for the Twelfth Ministerial Conference, delayed by the pandemic, to move negotiations forward to positive outcomes. 

“There is no reason why the twenty-year negotiation on fisheries subsidies cannot be concluded successfully — without a sacrifice of ambition — in the next few months.  Success hinges on Members’ willingness to accept a significant level of discipline on their own subsidies.  Political decisions and your active engagement will be required to bring about success.

“I urge you to address ‘trade and health’ forcefully and immediately.  Last year, trade made a vitally important contribution in supplying needed medical supplies to deal with COVID-19.  Proposals as to what more can be done must be deliberated now.  Cooperation on trade can accelerate access to vaccines.  There can be no higher priority.

“Consider how the WTO can further contribute to the economic recovery.  Members can take steps to ensure enhanced transparency, work to eliminate unnecessary barriers and agree that new restrictions will not be imposed.  Trade finance must be restored.  The WTO convened the major international financial organizations and banks to address this need in the aftermath of the financial crisis and it can do so now again.

“’Trade and climate’ must be on the WTO agenda.  Carbon border adjustment measures will likely result in conflicts unless Members engage in joint efforts to find mutually beneficial solutions.  The heightened interest of Members in a broad range of other environmental issues such as plastics pollution and the circular economy can be reflected in new agreements.   The WTO can be more visible as a steward of the planet by reviving and concluding the Environmental Goods Agreement

“The Joint Statement Initiatives on e-commerce, investment facilitation, and services domestic regulation can bear fruit this year, building on what was achieved with respect to small businesses last year.  In addition, more progress can be made on the economic empowerment of women through international trade.  

“Concerns over income inequality have been growing.  The WTO’s rules-based system needs to be seen not only among countries but also within countries, as responsive to the needs of workers, farmers and all who wish to engage in international trade.  But international trade rules cannot substitute for domestic policy actions to make growth more inclusive.  When large numbers of people are unhappy with how the economy is working for them, trade will often receive undeserved blame.  The WTO is about fairness.  Its work will never be done in pursuit of that objective, but further progress can be made this year.

“There can be an outcome on agriculture — at least a down-payment and a defined work program going forward.

“During 2021, the WTO can likely welcome new WTO Members, as it continues to move towards universal coverage.  Comoros and Bosnia-Herzegovina may be ready, and over a dozen others are making progress.

“Last but not least, ‘WTO reform’ can become a reality, with actions taken to —

“- facilitate rule-making with wide participation,

“- achieve heightened enforcement through binding dispute settlement in a manner agreed by all, and

“- provide a strong mandate for a Secretariat to deliver all needed support to Members and to achieving the mission of the WTO. 

“We should greet this year with optimism and re-dedication.  With your strong engagement, 2021 can be a year to remember for what is achieved.

“Thank you.”

A presentation from the WTO Secretariat to Ministers needs to be positive, forward looking, aspirational and inspirational. DDG Wolff’s statement yesterday provides all of that. The first item mentioned, the joint pledge from 79 WTO Members not to restrict agricultural exports to the UN World Food Programme for humanitarian purposes is a positive for the world but follows the December failure of the WTO General Council to agree to the same by all WTO Members. See January 23, 2021, WTO and the World Food Programme – action by 79 Members after a failed December effort at the General Council, https://currentthoughtsontrade.com/2021/01/23/wto-and-the-world-food-programme-action-by-79-members-after-a-failed-december-effort-at-the-general-council/.

The challenge for the WTO in 2021 will be whether Members can come together in fact to achieve many of the important opportunities and needs in front of the Membership. While the history of the WTO since 1995 and the major divisions among Members at the present time would strongly suggest that 2021 will not achieve many of the things that are needed and possible, hope springs eternal.

U.S. perspective

The Trump Administration did an excellent job of identifying problems with the operation of the WTO whether from the longstanding failures of the dispute settlement system, to the existential challenges to the viability of the WTO from major Members whose economies have not converged to a full market orientation, to the out-of-date rules around special and differential treatment to all who claim developing country status regardless of economic development of individual members, to the need for greater transparency in many areas, including importantly subsidies, to the failure of the WTO to update rules to address changing technology and trade issues.

The Biden Administration has indicated its intention to work within multilateral institutions, including the WTO. Early action by the United States on the Director-General selection issue could provide positive energy to WTO Members in the coming months. There are topics where success can be made in 2021 either multilaterally or plurilaterally. But a lot of what is needed for meaningful WTO reform will be difficult, if not impossible, to achieve in the short term. Hopefully, the Biden team will stay the course to achieve reform that both returns the WTO playing field to the level agreed at the time of concluding the Uruguay Round, finds ways to deal with the massive distortions not presently covered by WTO rules, works with others to bring the WTO into the 21st century and addresses the critical issues for global prosperity and sustainable development.

Global economic rebound in 2021 will be affected by rate of vaccinations against COVID-19 — World Bank’s January 5, 2021 release of its World Economic Prospects report

The last forecast by the WTO for international merchandise trade for 2020 projected a decline of 9.2% for the world reflecting significant improvements in the 3rd quarter of 2020 after the sharp contraction in the second quarter. Services trade is trailing merchandise trade significantly as is reflected in the WTO ‘s December 4, 2020 press release, Electronics and automotive products lift global merchandise trade in Q3, services lag behind, https://www.wto.org/english/news_e/news20_e/stat_04dec20_e.htm. Two charts from the press release show data through the third quarter of 2020 for goods and services and are copied below.

The expected continued rebound in the fourth quarter of 2020 has likely been reduced in size by the large increase in COVID-19 cases in many countries, including the European Union, United Kingdom, the United States and some countries in Asia and reintroduction of restrictions on people in those countries, resulting in downward pressure on domestic consumption (and hence trade flows in both goods and services).

There is significant optimism about economic growth in 2021 in light of the progress on approval and production of COVID-19 vaccines. See my post from January 3, 2021, 2021 – how quickly will COVID-19 vaccines bring the pandemic under control?, https://currentthoughtsontrade.com/2021/01/03/2021-how-quickly-will-covid-19-vaccines-bring-the-pandemic-under-control/.

Today, January 5, 2021, the World Bank released its World Economic Prospects report. See World Bank, World Economic Prospects, January 2021, https://www.worldbank.org/en/publication/global-economic-prospects. The press release from the World Bank provides both an estimate for growth in 2021 for the world and for various regions of the world but also cautions that the economic rebound could be reduced significantly if there are problems with vaccinations in the developed world and various advanced developing countries. See World Bank, Global Economy to Expand by 4% in 2021; Vaccine Deployment and Investment Key to Sustaining the Recovery, January 5, 2021, https://www.worldbank.org/en/news/press-release/2021/01/05/global-economy-to-expand-by-4-percent-in-2021-vaccine-deployment-and-investment-key-to-sustaining-the-recovery. A large part of the press release is copied below (emphasis and italics in the original).

Development risks remain as economic activity, incomes likely to stay low for extended period

“WASHINGTON, Jan. 5, 2021 — The global economy is expected to expand 4% in 2021, assuming an initial COVID-19 vaccine rollout becomes widespread throughout the year. A recovery, however, will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms, the World Bank says in its January 2021 Global Economic Prospects.

“Although the global economy is growing again after a 4.3% contraction in 2020, the pandemic has caused a heavy toll of deaths and illness, plunged millions into poverty, and may depress economic activity and incomes for a prolonged period. Top near-term policy priorities are controlling the spread of COVID-19 and ensuring rapid and widespread vaccine deployment. To support economic recovery, authorities also need to facilitate a re-investment cycle aimed at sustainable growth that is less dependent on government debt.

“‘While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges—in public health, debt management, budget policies, central banking and structural reforms—as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth,’ said World Bank Group President David Malpass. ‘To overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance.’

“The collapse in global economic activity in 2020 is estimated to have been slightly less severe than previously projected, mainly due to shallower contractions in advanced economies and a more robust recovery in China. In contrast, disruptions to activity in the majority of other emerging market and developing economies were more acute than expected.

“’Financial fragilities in many of these countries, as the growth shock impacts vulnerable household and business balance sheets, will also need to be addressed,’ Vice President and World Bank Group Chief Economist Carmen Reinhart said.

“The near-term outlook remains highly uncertain, and different growth outcomes are still possible, as a section of the report details. A downside scenario in which infections continue to rise and the rollout of a vaccine is delayed could limit the global expansion to 1.6% in 2021. Meanwhile, in an upside scenario with successful pandemic control and a faster vaccination process, global growth could accelerate to nearly 5 percent.

“In advanced economies, a nascent rebound stalled in the third quarter following a resurgence of infections, pointing to a slow and challenging recovery. U.S. GDP is forecast to expand 3.5% in 2021, after an estimated 3.6% contraction in 2020. In the euro area, output is anticipated to grow 3.6% this year, following a 7.4% decline in 2020. Activity in Japan, which shrank by 5.3% in the year just ended, is forecast to grow by 2.5% in 2021.

“Aggregate GDP in emerging market and developing economies, including China, is expected to grow 5% in 2021, after a contraction of 2.6% in 2020. China’s economy is expected to expand by 7.9% this year following 2% growth last year. Excluding China, emerging market and developing economies are forecast to expand 3.4% in 2021 after a contraction of 5% in 2020. Among low-income economies, activity is projected to increase 3.3% in 2021, after a contraction of 0.9% in 2020.

“Analytical sections of the latest Global Economic Prospects report examine how the pandemic has amplified risks around debt accumulation; how it could hold back growth over the long term absent concerted reform efforts; and what risks are associated with the use of asset purchase programs as a monetary policy tool in emerging market and developing economies.

“’The pandemic has greatly exacerbated debt risks in emerging market and developing economies; weak growth prospects will likely further increase debt burdens and erode borrowers’ ability to service debt,’ World Bank Acting Vice President for Equitable Growth and Financial Institutions Ayhan Kose said. ‘The global community needs to act rapidly and forcefully to make sure the recent debt accumulation does not end with a string of debt crises. The developing world cannot afford another lost decade.’

“As severe crises did in the past, the pandemic is expected to leave long lasting adverse effects on global activity. It is likely to worsen the slowdown in global growth projected over the next decade due to underinvestment, underemployment, and labor force declines in many advanced economies. If history is any guide, the global economy is heading for a decade of growth disappointments unless policy makers put in place comprehensive reforms to improve the fundamental drivers of equitable and sustainable economic growth.  

“Policymakers need to continue to sustain the recovery, gradually shifting from income support to growth-enhancing policies. In the longer run, in emerging market and developing economies, policies to improve health and education services, digital infrastructure, climate resilience, and business and governance practices will help mitigate the economic damage caused by the pandemic, reduce poverty and advance shared prosperity. In the context of weak fiscal positions and elevated debt, institutional reforms to spur organic growth are particularly important. In the past, the growth dividends from reform efforts were recognized by investors in upgrades to their long-term growth expectations and increased investment flows.

“Central banks in some emerging market and developing economies have employed asset purchase programs in response to pandemic-induced financial market pressures, in many cases for the first time. When targeted to market failures, these programs appear to have helped stabilize financial markets during the initial stages of the crisis. However, in economies where asset purchases continue to expand and are perceived to finance fiscal deficits, these programs may erode central bank operational independence, risk currency weakness that de-anchors inflation expectations, and increase worries about debt sustainability.”

Whether the economic recovery in 2021 is as robust as projected or is dramatically smaller (worst case scenario) will obviously affect trade flows of both goods and services. As can be seen from the initial roll out of vaccines in the U.S., EU, U.K., Canada and other countries, there are significant goods and services involved with the production, distribution and utilization of vaccines globally and within markets. Thus, if there are problems with vaccinating large parts of populations, that will have a direct effect on both goods shipments and on various services. There are also the indirect effects on goods and services from the likely continued restrictions on travel and tourism if the pandemic is not brought under control, something that widespread vaccinations will assist in achieving. My post yesterday reviewed some of the early challenges with vaccinations occurring in the U.S., EU and India. Additional articles are appearing which suggest a lot of work needs to be done to in fact permit rapid vaccinations of populations. See, e.g., Politico, The EU’s coronavirus vaccine blame game. Why so slow?, January 5, 2021, https://www.politico.eu/article/the-vaccination-blame-game-is-it-all-the-eus-fault/; Politico, Sluggish coronavirus vaccination rollout poses risks for Macron, January 5, 2021, https://www.politico.eu/article/coronavirus-covid19-vaccine-campaign-fail-france-president-emmanuel-macron-election/; Wall Street Journal, Covid-19 Vaccine’s Slow Rollout Could Portend More Problems, January 1, 2021, https://www.wsj.com/articles/covid-19-vaccines-slow-rollout-could-portend-more-problems-11609525711/ And this comes against the backdrop of continued surges of new cases of COVID-19 in the U.S. and many other countries which will extend restrictions into the early months of 2021 at least and hence restrict economic recovery in at least the first quarter of 2021. See, e.g., Financial Times, Covid surges as UK rolls out mass vaccination programme, January 3, 2021, https://www.ft.com/content/71140ee7-8e47-4499-9fcf-2d23d5c7d94f; New York Times, The Lull Before the Surge on Top of the Surge, January 5, 2021, https://www.nytimes.com/2021/01/05/us/california-coronavirus.html

The World Bank report identifies a host of policy issues for governments and challenges flowing from the high level of debt that has been incurred during 2020 and the downward pressures on investment flows in many countries. Many countries will have trouble implementing the appropriate policy options because of existing debt issues (particularly many developing countries) or because of political gridlock, as is apparent in the U.S. even with a new Administration due to be sworn in on January 20. See, e.g., New York Times, $900 Billion Wonʼt Carry Biden Very Far (Despite new pandemic aid, he confronts an economic crisis unlike any since he last entered office in 2009. And political headwinds have only stiffened), January 4, 2021. Indeed, as reviewed in a recent Congressional Research Service updated report on the Global Economic Effects of COVID-19 (updated as of December 23, 2020), the level of debt incurred by developed and developing countries has surged during the pandemic with the level of fiscal deficit relative to GDP reflecting declining government revenues and increased expenditures to reduce the negative effects of the pandemic. See CRS, Global Economic Effects of COVID-19, updated December 23, 2020, page 13, https://fas.org/sgp/crs/row/R46270.pdf. The figure from the report is copied below. Obviously the levels of fiscal deficit incurred in 2020 are not sustainable. They also reduce flexibilities of countries in policy actions that can be taken to speed up the recovery of the national and global economies.

Conclusion

The world needs to return to a period of sustained economic growth that is more inclusive and more equitable. The arrival of vaccines (with more expected in the first quarter of 2021) and the ramp up of production, distribution and utilization of vaccines around the world can expand economic growth both directly through the goods and services involved and indirectly through permitting countries to ease restrictions imposed to try to control the pandemic. The first few weeks of the rollout of vaccines have not been without significant problems. As reviewed in yesterday’s post, production of the vaccines that have been approved by individual nations is running behind what was anticipated, in some cases (e.g., India) significantly. While distribution has been reasonably robust in the U.S. and some other countries, there is a significant lag in getting the vaccines utilized with a wide variety of problems identified in different markets.

As the World Bank’s report today makes clear, if countries are not able to achieve significant vaccinations in 2021 the projected growth of global GDP could be cut by more than half. A global economy that is not expected to return to 2019 levels until 2022 even if 2021 growth rates are achieved will be further retarded if vaccinations lag what is needed. That will reduce trade volumes of goods and services, leave tens of millions of people around the world unemployed or underemployed, and challenge the ability to achieve UN Sustainability Goals on a host of issues including poverty, food security and many more.

President-elect Biden and his team are focused on dramatically ramping up the response in the United States, but the challenges here are significant and complicated by a divided public many of whom still doubt there is a pandemic or that it is problematic or who are opposed to vaccinations. Challenges exist in many other countries as well.

If ever there were a time for people to come together and ensure the timely vaccinations of as many people as possible as quickly as possible, it is obviously now. Whether that can be achieved is the multi-trillion dollar question.

2021 – how quickly will COVID-19 vaccines bring the pandemic under control?

News accounts report many countries starting to receive at least some doses of vaccines. In the United States, two vaccines have received emergency use authorization (“EUA”)(the Pfizer/BioNTech and the Moderna vaccines). The Pfizer/BioNTech vaccine has received approval (emergency use or other) in a number of countries (EU, Canada, United Kingdom, Bahrain) and was the first vaccine to receive an EUA from the World Health Organization. See WHO press release, WHO issues its first emergency use validation for a COVID-19 vaccine and emphasizes need for equitable global access, December 31, 2020, https://www.who.int/news/item/31-12-2020-who-issues-its-first-emergency-use-validation-for-a-covid-19-vaccine-and-emphasizes-need-for-equitable-global-access. As the WHO press releases indicates, “The WHO’s Emergency Use Listing (EUL) opens the door for countries to expedite their own regulatory approval processes to import and administer the vaccine. It also enables UNICEF and the Pan-American Health Organization to procure the vaccine for distribution to countries in need.”

AstraZeneca will likely seek emergency use authorization in the United States in January and Johnson & Johnson in February. AstraZeneca has received an emergency use authorization in the United Kingdom. It has also been given EUA by India (along with a vaccine from Bharat Biotech). See New York Times, India Approves Oxford-AstraZeneca Covid-19 Vaccine and 1 other, January 3, 2021, https://www.nytimes.com/2021/01/03/world/asia/india-covid-19-vaccine.html.

A recent Financial Times article includes a graph showing the number of citizens in various countries who have received a first vaccination shot. See Financial Times, European leaders under pressure to speed up mass vaccination, January 1, 2021, https://www.ft.com/content/c45e5d1c-a9ea-4838-824c-413236190e7e. The countries shown as having started vaccinations include China, the U.S., the U.K., Kuwait, Mexico, Canada, Chile, Russia, Argentina, Iceland, Bahrain, Oman, Israel, and fourteen of the 27 members of the EU).

Similarly an article from CGTN on January 1, 2021 shows a number of countries who are buying COVID-19 vaccines from China including Hungary and a number of others while vaccines from China are in stage 3 trials in a number of countries. CGTN, 1 January 2021, Hungary to focus on EU, Chinese coronavirus vaccine purchases, https://news.cgtn.com/news/2021-01-01/Hungary-to-focus-on-EU-Chinese-coronavirus-vaccine-purchases-WHm11NYjni/index.html. “By the end of 2020, UAE became the first country to roll out a Chinese vaccine to the public. Pakistan also announced on Thursday that they will purchase 1.2 million COVID-19 vaccine doses from China’s Sinopharm after China officially approved the vaccine for general public use. Sinovac’s CoronaVac shot, another candidate vaccine in China, has been signed up for purchase deals with Brazil, Indonesia, Turkey, Chile, and Singapore. The company is also in supply talks with Malaysia and the Philippines.”

So the good news at the beginning of 2021 is that effective vaccines are starting to be distributed. Many others are in late stages of trials, giving hope to a significant number of vaccines approved for use in the coming months. The WHO’s list of vaccines in development and their status can be found on the WHO website at this cite. https://www.who.int/publications/m/item/draft-landscape-of-covid-19-candidate-vaccines. How quickly approved vaccines can be produced, distributed and vaccinations given globally will determine when the pandemic will be brought under control. There are many challenges that the world faces in getting to the hoped for situation of a pandemic that is in the past.

For example, even in developed countries, governments are finding that there are significant hurdles in getting production volumes up to promised levels, and much greater challenges in going from production to distribution to vaccinations. In the United States, the Trump Administration had aimed at having 20 million vaccinations accomplished by the end of 2020. Only 13.071 million doses were distributed by the end of the year according to the US CDC and only 4.2 million vaccinations (first shot of two shots) occurred. See Center for Disease Prevention and Control, COVID-19 Vaccinations in the United States, https://covid.cdc.gov/covid-data-tracker/#vaccinations (viewed Jan. 3, 2021). President-elect Biden is talking about an aggressive program to get 100 million vaccinations (as the current vaccines require 2 shots, this means 50 million people) vaccinated in the first 100 days of his Administration (by the end of April). To achieve this objective will require cooperation from Congress in providing sufficient funding to build up the capabilities at the state and local levels. Health care infrastructure has been reduced over the last dozen years with a reduction of some 50,000 health care workers in the U.S. The huge COVID-19 case load in the United States and record hospitalizations also have health care operations across the United States overextended. So despite having sufficient vaccines on order from four companies where EUAs have been or will likely be granted in the near future to permit vaccination of all Americans by fall, there are enormous practical challenges to making the vaccinations happen in fact. And that is before the challenges of convincing portions of the population of the safety of the vaccines and the need for the vast majority of people to be vaccinated to achieve herd immunity.

Similar challenges exist in many other parts of the world as well. For example, in both the EU and India the roll out of vaccines is proceeding slower than desired. See, e.g., The Guardian, BioNTech criticises EU failure to order enough Covid vaccine, January 1, 2021, https://www.theguardian.com/world/2021/jan/01/france-to-step-up-covid-jabs-after-claims-of-bowing-to-anti-vaxxers; Politico, France under pressure to speed up coronavirus vaccine rollout, January 3, 2021, https://www.politico.eu/article/france-under-pressure-to-speed-up-coronavirus-vaccine-rollout/; New York Times, India Approves Oxford-AstraZeneca Covid-19 Vaccine and 1 other, January 3, 2021, https://www.nytimes.com/2021/01/03/world/asia/india-covid-19-vaccine.html (“The Serum Institute, an Indian drug maker that struck a deal to produce the Oxford vaccine even before its effectiveness had been proven, has managed to make only about one-tenth of the 400 million doses it had committed to manufacturing before the end of the year.”).

The WHO/GAVI/CEPI effort to get vaccines to the world on a equitable basis has much of its vaccine commitments in products still in the testing stage although roughly one billion doses can be available for a vaccine currently approved on an emergency use basis in the U.K. and India (the AstraZeneca vaccine) through COVAX agreements with AstraZeneca directly and with an Indian producer who can be asked to produce one of two potential vaccines, including the AstraZeneca one. See WHO, COVAX Announces additional deals to access promising COVID-19 vaccine candidates; plans global rollout starting Q1 2021, 18 December 2020, https://www.who.int/news/item/18-12-2020-covax-announces-additional-deals-to-access-promising-covid-19-vaccine-candidates-plans-global-rollout-starting-q1-2021.

“Geneva/Oslo, 18 December 2020

“COVAX, the global initiative to ensure rapid and equitable access to COVID-19 vaccines for all countries, regardless of income level, today announced that it had arrangements in place to access nearly two billion doses of COVID-19 vaccine candidates, on behalf of 190 participating economies. For the vast majority of these deals, COVAX has guaranteed access to a portion of the first wave of production, followed by volume scales as further supply becomes available. The arrangements announced today will enable all participating economies to have access to doses in the first half of 2021, with first deliveries anticipated to begin in the first quarter of 2021 – contingent upon regulatory approvals and countries’ readiness for delivery.

“Given these are arrangements for 2 billion doses of vaccine candidates which are still under development, COVAX will continue developing its portfolio: this will be critical to achieve its goal of securing access to 2 billion doses of safe and effective, approved vaccines that are suitable for all participants’ contexts, and available by the end of 2021. However, today’s announcements offer the clearest pathway yet to end the acute phase of the pandemic by protecting the most vulnerable populations around the world. This includes delivering at least 1.3 billion donor-funded doses of approved vaccines in 2021 to the 92 low- and middle-income economies eligible for the COVAX AMC.

“The new deals announced today include the signing of an advance purchase agreement with AstraZeneca for 170 million doses of the AstraZeneca/Oxford candidate, and a memorandum of understanding (MoU) with Johnson & Johnson for 500 million doses of the Janssen candidate, which is currently being investigated as a single dose vaccine.. These deals are in addition to existing agreements COVAX has with the Serum Institute of India (SII) for 200 million doses – with options for up to 900 million doses more – of either the AstraZeneca/Oxford or Novavax candidates, as well as a statement of intent for 200million doses of the Sanofi/GSK vaccine candidate.

“In addition to this, COVAX also has – through R&D partnership agreements – first right of refusal in 2021 to access potentially more than one billion doses (based on current estimates from the manufacturing processes under development) that will be produced, subject to technical success and regulatory approval, by candidates in the COVAX R&D Portfolio.”

* * *

“The COVAX Facility currently has 190 participating economies. This includes 98 higher-income economies and 92 low- and middle-income economies eligible to have their participation in the Facility supported via the financing mechanism known as the Gavi COVAX AMC. Of the 92 economies eligible to be supported by the COVAX AMC, 86 have now submitted detailed vaccine requests, offering the clearest picture yet on actual global demand for COVID-19 vaccines.

“In addition to gathering detailed information on participating economies’ vaccine requests, COVAX, through Gavi, UNICEF,WHO, the World Bank, and other partners has been working closely with all countries in the Facility, particularly AMC-eligible participants, to help plan and prepare for the widespread roll out of vaccines. Conditions that determine country readiness include regulatory preparedness as well as the availability of infrastructure, appropriate legal frameworks, training, and capacity, among other factors.

“’Securing access to doses of a new vaccine for both higher-income and lower-income countries, at roughly the same time and during a pandemic, is a feat the world has never achieved before – let alone at such unprecedented speed and scale,’ said Dr. Seth Berkley, CEO of Gavi, the Vaccine Alliance, which leads on procurement and delivery for COVAX. ‘COVAX has now built a platform that offers the world the prospect, for the first time, of being able to defeat the pandemic on a global basis, but the work is not done: it’s critical that both governments and industry continue to support our efforts to achieve this goal’.

Early pledges towards 2021 fundraising targets

“To achieve this ambitious goal, COVAX currently estimates it needs to raise an additional US$ 6.8 billion in 2021 – US$ 800 million for research and development, at least US$ 4.6 billion for the COVAX AMC and US$ 1.4 billion for delivery support.

“Support for the COVAX AMC will be critical to ensuring ability to pay is not a barrier to access. Thanks to the generous support of sovereign, private sector, and philanthropic donors, the AMC has met its urgent 2020 fundraising target of US$ 2 billion, but at least US$ 4.6 billion more is needed in 2021 to procure doses of successful candidates as they come through the portfolio.”

In the United States and in the EU, governments are looking to expand volumes of proven vaccines while awaiting approval of other vaccine candidates. See Pfizer press release, PFIZER AND BIONTECH TO SUPPLY THE U.S. WITH100 MILLION ADDITIONAL DOSES OF COVID-19VACCINE, December 23, 2020, https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-supply-us-100-million-additional-doses; Pfizer press release, PFIZER AND BIONTECH TO SUPPLY THEEUROPEAN UNION WITH 100 MILLIONADDITIONAL DOSES OF COMIRNATY®, December 29, 2020, https://www.pfizer.com/news/press-release/press-release-detail/pfizer-and-biontech-supply-european-union-100-million; HHS, Trump Administration purchases additional 100 million doses of COVID-19 investigational vaccine from Moderna, December 11, 2020, https://www.hhs.gov/about/news/2020/12/11/trump-administration-purchases-additional-100-million-doses-covid-19-investigational-vaccine-moderna.html.

Conclusion

The world is anxiously awaiting the resolution of the pandemic through the approval and distribution of effective vaccines on a global basis in 2021. The good news is that a number of vaccines have been approved in one or more countries and billions of doses of approved vaccines will likely be produced in 2021. The efforts of the WHO, GAVI and CEPI and the generosity of many nations, private and philanthropic organizations will mean people in nearly all countries will receive at least some significant volume of vaccines in 2021. As most vaccines require two shots, the number of people vaccinated in 2021 in an optimistic scenario is probably less than two billion. The world population at the beginning of 2021 is 7.8 billion people. Thus, 2021, even under an optimistic scenario, will not likely result in the eradication of the pandemic around the world.

Even in countries like the United States, the United Kingdom and the 27 members of the European Union where advance purchases should result in sufficient doses being available to vaccinate all eligible members of society, there are massive challenges in terms of distribution and vaccinating the numbers of people involved and educating the populations on the safety and benefits of the vaccines. Thus, even in wealthier countries it will be optimistic to achieve the desired levels of vaccination by the end of 2021.

The Director-General of the WHO in his year-end message laid out the likely situation for the world in 2021, the availability of vaccines but the continued need to be vigilant and adhere to preventive measures to control the pandemic and the need to work collectively to ensure equitable and affordable access to vaccines for all. See WHO,COVID-19: One year later – WHO, Director-General’s new year message, December 30, 2020, https://www.who.int/news/item/30-12-2020-covid-19-anniversary-and-looking-forward-to-2021 (Dr Tedros Adhanom Ghebreyesus, WHO Director-General)

“As people around the world celebrated New Year’s Eve 12 months ago, a new global threat emerged.

“Since that moment, the COVID-19 pandemic has taken so many lives and caused massive disruption to families, societies and economies all over the world.

“But it also triggered the fastest and most wide-reaching response to a global health emergency in human history.

“The hallmarks of this response have been an unparalleled mobilization of science, a search for solutions and a commitment to global solidarity.

“Acts of generosity, large and small, equipped hospitals with the tools that health workers needed to stay safe and care for their patients.

“Outpourings of kindness have helped society’s most vulnerable through troubled times.

“Vaccines, therapeutics and diagnostics have been developed and rolled out, at record speed, thanks to collaborations including the Access to COVID-19 Tools Accelerator.

“Equity is the essence of the ACT Accelerator, and its vaccine arm, COVAX, which has secured access to 2 billion doses of promising vaccine candidates.

“Vaccines offer great hope to turn the tide of the pandemic.

“But to protect the world, we must ensure that all people at risk everywhere – not just in countries who can afford vaccines –are immunized.

“To do this, COVAX needs just over 4 billion US dollars urgently to buy vaccines for low- and lower-middle income countries.

“This is the challenge we must rise to in the new year.

“My brothers and sisters, the events of 2020 have provided telling lessons, and reminders, for us all to take into 2021.

“First and foremost, 2020 has shown that governments must increase investment in public health, from funding access to COVID vaccines for all people, to making our systems better prepared to prevent and respond to the next, inevitable, pandemic.

“At the heart of this is investing in universal health coverage to make health for all a reality.

“Second, as it will take time to vaccinate everyone against COVID, we must keep adhering to tried and tested measures that keep each and all of us safe.

“This means maintaining physical distance, wearing face masks, practicing hand and respiratory hygiene, avoiding crowded indoor places and meeting people outside.

“These simple, yet effective measures will save lives and reduce the suffering that so many people encountered in 2020.

“Third, and above all, we must commit to working together in solidarity, as a global community, to promote and protect health today, and in the future.

“We have seen how divisions in politics and communities feed the virus and foment the crisis.

“But collaboration and partnership save lives and safeguard societies.

“In 2020, a health crisis of historic proportions showed us just how closely connected we all are.

“We saw how acts of kindness and care helped neighbors through times of great struggle.

“But we also witnessed how acts of malice, and misinformation, caused avoidable harm.

“Going into 2021, we have a simple, yet profound, choice to make:

“Do we ignore the lessons of 2020 and allow insular, partisan approaches, conspiracy theories and attacks on science to prevail, resulting in unnecessary suffering to people’s health and society at large?

“Or do we walk the last miles of this crisis together, helping each other along the way, from sharing vaccines fairly, to offering accurate advice, compassion and care to all who need, as one global family.

“The choice is easy.

“There is light at the end of the tunnel, and we will get there by taking the path together.

“WHO stands with you – We Are Family and we are In This Together.

“I wish you and your loved ones a peaceful, safe and healthy new year.”

We all want to have the COVID-19 pandemic in the rearview mirror as 2021 progresses. There is hope for significant progress this year. How much progress will depend on the will of governments and peoples to focus on the eradication of the pandemic and to support the dramatic ramp up of production, distribution and vaccination of the world’s people.

In last two weeks, United States adds more than three million new confirmed COVID-19 cases; world approaches nine million new cases; first vaccines start to ship in United Kingdom, Canada, Bahrain, United States and shortly in the European Union; hope for a better 2021

The European Centre for Disease Prevention and Control (ECDC) shifted from a daily report on global cases to a weekly total last week. In today’s report, the United States becomes the only country to record more than three million new cases in a two week period. ECDC, COVID-19 situation update worldwide, as of week 51 2020. It is also the only country to have recorded 2,000,000 in a two week period. The 3,087,841 new cases in weeks 50 and 51 constitute 34.73% of the global total of 8,888,940 new cases in the last two weeks and was 4.68 times the number reported in Brazil (660,079), 8.16 times the number reported in India — the two countries after the United States with the most cases. For the full 2020, the United States has accounted for 23.47% (17,844,839) of global cases (76,046,387) despite being only 4.3% of the global population.

The weekly total for the United States has been an almost uninterrupted surge in new cases for the last three months or so. Below are the data as compiled by the ECDC for weeks 37-51 for the United States. Deaths have also been climbing rapidly but at a slower rate than new cases. The U.S. accounts for 18.75% (317,670) of global deaths (1,693,858) in 2020 from COVID-19 and a higher percentage in recent weeks. Deaths for the same weeks for the U.S. are shown below. The U.S. is seeing deaths approaching 3,000/day with some days as high as 4,000+. With hospitalizations at all time highs, and surging cases and rising deaths, the U.S. is likely to surpass 400,000 deaths by January 20, 2021 when President-elect Joe Biden will be sworn in.

Number of new COVID-19 cases reported by the U.S.Week in 2020No. of deaths reported in the U.S.
             243,5582020-37  5,138               
             284,8352020-38 5,430
             310,2322020-39 5,247
             302,7992020-40 5,038
             344,6992020-41 4,977
             392,0512020-42 4,903
             481,5702020-43 5,556
             571,1972020-44 5,766
             764,2892020-45 6,576
         1,065,4102020-46 8,642
         1,209,8482020-47 10,568
         1,136,4122020-48 10,091
         1,373,6772020-49 15,437
         1,499,7562020-50 16,867
         1,588,0852020-51 18,493

The good news is the approval of the first vaccines in the U.S., approvals in a number of other countries of at least one vaccine (United Kingdom, Canada, Bahrain, European Union) and more vaccines getting close to completing their trials. See, e.g., New York Times, E.U. Approves Pfizer Vaccine, Setting Stage for High-Stakes Rollout, December 21, 2020, https://www.nytimes.com/2020/12/21/world/europe/eu-coronavirus-vaccine.html. These western vaccines are in addition to the ones produced in China and the Russia Federation that were released before all trials were completed.

However, even for countries who have lined up large volumes of vaccines through up-front contracts for delivery in December or the front half of 2021, countries who have approved one or more of the western company vaccines are still months away from having enough people vaccinated to make a significant dent in the levels of new cases or deaths without strong efforts to maintain social distancing, wear masks, minimize size of gatherings, washing hands, etc.

With mutations of the virus having appeared in the U.K. and elsewhere, it is also unclear how efficacious the early vaccines will be on the mutations. Early information on the news today, suggests at least some reduction in effectiveness is likely, which could have implications for the percentage of the population needed to be vaccinated to achieve herd immunity. Many countries are banning travel from the U.K. in an effort to prevent the spread of the mutant variation of COVID-19 identified in the U.K. which is believed to spread much more easily. See Politico, Mutant coronavirus strain: What we know so far, December 21, 2020, https://www.politico.eu/article/mutant-coronavirus-strain-what-we-know-so-far/.

While the short-term future has many challenges, many are hopeful that 2021 will see the COVID-19 pandemic being handled as vaccines are approved and produced and distributed to all peoples around the world to permit a return to greater normalcy. See Time, What Bill Gates Thinks About the State of the Fight Against COVID-19, December 22, 2020, https://time.com/5923916/bill-gates-covid-19-letter/; Bill Gates, YEAR IN REVIEW, These breakthroughs will make 2021 better than 2020, The latest on the innovations that will let us go back to normal, December 20, 2020, https://www.gatesnotes.com/About-Bill-Gates/Year-in-Review-2020.

The WTO has both been monitoring trade restrictive and liberalizing actions taken by Members relating to the pandemic and has also recently put out a paper reviewing trade policy issues that can arise as the world shifts to the production and distribution of vaccines around the world. See WTO, TRIPS, WTO paper explores role of trade policy in the rapid roll-out of COVID-19 vaccines, December 22, 2020, https://www.wto.org/english/news_e/news20_e/trip_22dec20_e.htm. The press release describes the content of the new paper as follows:

“The WTO Secretariat has published a new information note on trade-related issues for COVID-19 vaccine production, manufacturing and deployment. The note, entitled ‘Developing and delivering COVID-19
vaccines around the world,’ explores how trade policy can play its part in ensuring the rapid roll-out of vaccines against COVID-19.

“The paper goes into further detail on key topics included in two documents previously published on the WTO website: ‘Infographic: Developing & delivering COVID-19 vaccines around the world’ (https://www.wto.org/english/tratop_e/covid19_e/vaccine_infographic_e.pdf) and ‘Developing & delivering COVID-19 vaccines around the world: A checklist of issues with trade impact’
(https://www.wto.org/english/tratop_e/covid19_e/vaccine_checklist_e.pdf) .

“The new information note comprises three sections. Section A provides background information on immunization and the urgent search for vaccines against COVID-19. This section points to immunization as a key component of primary health care and highlights the ambitious national and global targets that have been set for COVID-19 vaccines. According to the World Health Organization (https://www.who.int/publications/m/item/fair-allocation-mechanism-for-covid-19-vaccines-through-the-covax-facility) and Gavi, the Vaccine Alliance (https://www.gavi.org/vaccineswork/covax-explained), two billion COVID-19 vaccine doses are to be distributed by the end of 2021, with an allocation for every country equal to 20 per cent of the population so as to cover prioritized target groups.

“Section B provides an overview of the development and delivery of vaccines in the form of an infographic listing seven steps in this process: vaccine development, domestic approval (manufacture), vaccine manufacture, domestic approval (importer), international distribution, border clearance, and domestic distribution and surveillance.

“Finally, Section C identifies where key decisions with trade impact may need to be made along the vaccine value chain and provides a non-exhaustive list of useful resources to help inform decision-making. This section includes a checklist of trade issues to consider along with the COVID-19 vaccine value chain, as well as a world map of clinical trials and partnerships on COVID-19 treatments.

“The report can be found here (https://www.wto.org/english/tratop_e/covid19_e/vaccine_report_e.pdf).”

The report is embedded below.

vaccine_report_e

Conclusion

The COVID-19 pandemic has rocked the world in 2020. Some continents have come through with relatively few cases (Africa) or have often been successful in minimizing outbreaks (significant parts of Asia, Oceania). Europe was hit hard early (March-April) and suffered a much bigger second surge in the September -November period though renewed restrictions have brought case numbers down significantly in December. The Americas has had the highest number of cases and deaths of any region. The United States has gone through a number of surges and is currently exceeding or close to exceeding medical facility capabilities in many parts of the country. So 2020 is ending in a spiraling crisis in the United States. The arrival of vaccines is welcome news for all peoples but will take considerable time to be produced and distributed both within countries with high infection rates and to the rest of the world.

The role of trade in a pandemic is largely focused on keeping markets open for the movement of medical goods and food products. While a large number of countries have introduced some export restrictions on medical goods (and some on food products), many countries have also introduced actions to speed movement of medical goods and to lower costs. While there have not been new multilateral agreements to keep markets open or liberalize trade in medical goods, there have been some efforts at cooperation and coordination by at least some countries.

While the actions taken by governments to try to control the virus led to significant contractions in trade in the second quarter of 2020, much of prior trade flows were restored in the third quarter but will likely see some reductions in the fourth with the second wave of restrictions on activities in many countries in the last month or two. Certain service sectors (travel and tourism generally; air transport, restaurants, hotels specifically) have been very hard hit by the restrictions imposed with many businesses closing, more than 100 million people unemployed or underemployed in the sector and a post-pandemic world likely to be much changed particularly in sectors like restaurants that are dominated by small business operators. Most projections don’t see a restoration of global GDP levels to those achieved in 2019 until at least 2022.

Trillions of dollars have been poured into a number of countries as stimulus to prevent the further collapse of the economies involved. Those actions have reduced the size of the downturn which still is the worst since World War II for much of the world. The size of the stimulus infusions have also greatly increased the level of debts for the countries engaged in the stimulus activities. For countries without the ability to borrow huge sums for stimulus, the contraction in GDP has often been severe with gains from the last decade being wiped out in some cases.

So the world needs 2021 to be better than 2020. How the efforts at vaccine development proceed and the level of commitment and funding for production expansion and global distribution will be major factors in whether 2021 fulfills the promise of equitable and affordable access to vaccines and therapeutics needed to get the world back to a more normal place.

As first COVID-19 vaccine starts to be shipped to the United Kingdom, Canada, Bahrain and the United States, the number of new cases reaches another record over the last fourteen days

While both Russia and China have had vaccines that they have been using within country and shipping to some other countries, the first vaccine to have gone through all testing phases and be approved by certain western countries is the BioNTech/Pfizer vaccine (Pfizer vaccine). The first shots of the Pfizer vaccine were administered in the United Kingdom last week and are being distributed to the other countries which have approved the vaccine for emergency use. In the United States, shipments are going from Pfizer’s Michigan factory today to locations around the country with first vaccinations possible for selected groups as early as tomorrow. A second vaccine from Moderna is likely to be approved in the coming week or so. Others are expected to be submitted for emergency authorization in a few weeks time. So the good news is that vaccines that are safe and efficacious have been developed in record time. The challenges now will be the ramp up of global production, distribution from plant to distribution points and further distribution to hospitals, pharmacies, doctors offices capable of handling the vaccines (particularly for the Pfizer vaccine which has to be maintained at extraordinarily low temperatures requiring special cold storage facilities to handle), adequate medical personnel and equipment to vaccinate populations, organizing populations to receive the vaccine in an order decided by government and a willingness on the part of the population to be vaccinated. In the United States, vaccines will be distributed to the states and local areas but further distribution and state efforts at fulfilling the remaining steps are handicapped by limited funds and the failure to date of the U.S. Congress and Trump Administration to agree on a supplement stimulus package that will, inter alia, ensure adequate funding for the states to ensure proper distribution and means for vaccinating their populations. There is also a need for a major communication campaign as presently only 47% of people in the U.S. indicate they will get vaccinated; 26% indicate they will not get vaccinated and 27% are unsure. The EU is hoping to get the Pfizer vaccine approved by the end of the year although is under pressure to move that time line up. Politico, December 13, 2020, Pressure mounts on EU regulator to approve coronavirus vaccine — and fast, European regulators hope that taking more time will convince the skeptics to get vaccinated, https://www.politico.eu/article/pressure-mounts-on-eu-regulator-to-approve-coronavirus-vaccine-quickly/.

Juxtaposed to the good news of vaccine approval is the continued rise in the number of new cases of COVID-19 around the world, high death rates in the U.S. and much of Europe with very challenging times facing governments until vaccine distribution and vaccinations are widespread.

This post will focus on the United States. The United States has 4.3% of the world’s population but has had one of the worst performances of any country on earth in terms of bringing the virus under control. With 16,067,031 total COVID-19 cases reported in the United States as of December 13, the United States accounts for 22.64% of the total cases in the world (70,957,979). However, during the last fourteen days, the United States 2,820,380 new cases accounted for an astounding 32.74% of global cases (8,613,822). European Centre for Disease Prevention and Control, COVID-19 situation update worldwide, as of 13 December 2020. During the last two weeks, the U.S. averaged more than 200,000 new cases each day — another first. Indeed, no other country has reported 100,000 new cases in a single day throughout the 2020 period. By contrast, the United States has reported 100,000 or more new cases on forty days, including the last 39 days in a row. The United States has now reported 200,000 or more new cases for 10 days including 9 of the last 11 days. Global cases have started to increase again, up 5.79% over the prior two week period (November 16-29). The United States saw an increase of 20.44% or an increase 478,620 over the prior two week. Indeed, the rest of the world declined slightly as the U.S. accounted for more than 100% of the global increase in the last two week. And projections are that the number of new cases will continue to rise in the United States in the coming weeks. For example, the Center for Disease Control and Prevention in the United States monitors forecasts made by various entities and reports periodically the projected number of new cases and deaths. The latest update from December 9 shows a composite projection of an increase of some 14-15% in the coming weeks. See, CDC, COVID-19 Forecasts: Cases, updated Dec. 9, 2020, https://www.cdc.gov/coronavirus/2019-ncov/cases-updates/forecasts-cases.html. Thus, the United States will likely have the dubious distinction of recording more than 3,000,000 new cases in the next two week period.

On deaths from COVID-19, the United States has recorded 297,837 from COVID-19 or 18.35% of the world total (1,605,595). Over the last fourteen days, the United States has recorded 31,774 deaths (2,269.57/day) or 20.90% of the world total (152,064). Deaths in Europe have been very high in recent weeks following the extraordinary surge in the last two months in new cases although cases in Europe have been dropping over the last several weeks which should mean declining death totals in Europe in the coming weeks. Deaths in the United States are projected to continue rising and are already around one death every thirty seconds (indeed as deaths exceed 3,000/day some days, it is one death every 25-29 second. CDC’s recent update of various forecasts show likely increases in deaths in the U.S. in the coming weeks, some projections showing more than 3,000/day. See CDC, COVID-19 Forecasts: Deaths, updated December 9, 2020, https://www.cdc.gov/coronavirus/2019-ncov/covid-data/forecasting-us.html.

U.S. hospitalizations due to COVID-19 have now topped 100,000 and many states are near or exceeding capacity for ICU beds. On December 12, 2020, The COVID Tracking Project tallied 108,487 U.S. hospitalizations due to COVID. The image below is copied from the COVID Tracking Project webpage and shows current hospitalizations more than 60% higher than prior peaks from April and June/July. https://public.tableau.com/profile/covid.tracking.project#!/vizhome/CTPWebsiteGallery/7_USCHospitalized.

With the continued surge in new cases and increasing hospitalizations, many states are facing severe challenges. California has reimposed lock down requirements on most parts of the state. Reno, Nevada has had a huge spike in cases, requiring the city to convert a parking lot to a COVID-19 facility. Press articles show the problem is occurring in many places. See, e.g., Houston Chronicle, December 10, 2020, TMC hospitals, hit by COVID surge, exceed base ICU capacity for first time since summer, https://www.houstonchronicle.com/news/houston-texas/health/article/COVID-ICU-capacity-patients-Texas-Med-Center-news-15791754.php; Raleigh News & Observer, December 8, 2020, NC hospitals will run out of beds if current COVID trends continue, researchers say, https://www.newsobserver.com/news/local/article247691885.html.

With vaccines now starting to ship, the U.S. is predicting that some 60% of Americans will be vaccinated by the summer (described as any American who wishes to be vaccinated). Dr. Fauci has indicated that vaccinations of 70% or more will be required for herd immunity, but life may start to return to a more normal state by late summer if the government, businesses and the population work together to maximize vaccinations and continue to follow other precautions until then (mask wearing, social distancing, handwashing, small group gatherings, etc.). It will also require the Congress and the Trump Administration to get the supplement stimulus package passed and enacted into law to ensure adequate funding for the states to ensure full and timely implementation of the vaccination effort.

But despite the good news on vaccines, the challenges facing the U.S. certainly for the first two quarters of 2021 and perhaps longer, will continue to be extraordinary considering current conditions and projections through January. For the United States, it is certain to be a very dark and challenging winter and at least early Spring. The incoming Biden Administration understands the importance of a full court press to get the pandemic under control. Let’s hope that the problems prove manageable and that the carnage the American people have suffered can be drastically reduced and quickly stopped.

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

In my post of November 2, 2020, I reviewed a proposed waiver from many TRIPS obligations for all countries to address the COVID-19 pandemic. See 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/. While originally filed by India and South Africa (IP/C/W/669), a few other countries have joined the proposal including Eswatini (IP/C/W/669/Add.1), Kenya (IP/C/W/669/Add.1), Mozambique (IP/C/W/669/Add.2) and Pakistan (IP/C/W/669/Add.3). South Africa made a supplemental filing providing what it described as “Examples of IP Issues and Barriers in COVID-19 pandemic”. Communication from South Africa, Examples of IP Issues and Barriers in COVID-19 Pandemic, IP/C/W/670, 23 November 2020. The South African communication is embedded below.

W670

My post of November 2 had raised a number of question presented by the proposed waiver:

” The proposal raises a series of questions that should be addressed to understand whether the waiver is appropriate. These questions include whether such a broad waiver request is appropriate or envisioned by Article IX:3 and 4 of the Marrakesh Agreement? Shouldn’t those requesting a waiver be required to demonstrate that the existing flexibilities within the TRIPS Agreement are inadequate to address concerns they may have? Can two Members request a waiver of obligations for all WTO Members? Can a waiver request be considered where the product scope is lacking clarity, and the uses/needs of the waiver are very broad and potentially open to differing views? To what extent is there a need for those seeking a waiver to present a factual record of actions being taken by governments, companies and international organizations to provide access to medical goods during the pandemic including to developing and least developed countries? Shouldn’t those seeking a waiver identify the extent of existing licenses by major pharmaceutical companies with them or other WTO Members for the production of vaccines or therapeutics to address COVID-19?”

The supplemental information provided by South Africa identifies various patent pending matters and identifies what it describes as restrictive actions by some companies and some patent litigation by certain companies. As such the communication provides some information of possible relevance in examining the proposed waiver. However, there is little if any information provided on most questions that seem important to an informed discussion of the proposed waiver.

On November 27, Australia, Canada, Chile and Mexico filed a communication entitled “Questions on Intellectual-Property Challenges Experienced by Members in Relation to COVID-19”. IP/C/W/671. While the entire communication is embedded below, paragraphs 3 and 4 are copied below and present a framework for the consideration of the proposed waiver and seek factual answers to a series of questions which would help understand if there are in fact any significant barriers being confronted by WTO Members in addressing the pandemic.

“3. The co-sponsors of this communication remain of the view that these important, challenging, and complex issues merit further reflection and significant consideration, in order to identify any specific and concrete IP-related challenges faced by Members in addressing COVID-19. In addition, we take note that IP rights are one part of a broad discussion informing the availability and accessibility of treatments for COVID-19. Indeed, as the Doha Declaration on the TRIPS Agreement and Public Health emphasizes, the TRIPS Agreement itself is part of the wider national and international effort to address public health problems. With respect to COVID-19, this broader response includes significant investments through procurement mechanisms like the Access to COVID-19 Tools Accelerator and the COVAX Facility and Advance Market Commitment, as well as work within the WTO and elsewhere to safeguard and protect global supply chains.

“4. The co-sponsors of this communication are actively committed to a comprehensive, global
approach that leverages the entire multilateral trading system in place to supporting the research,
development, manufacturing, and distribution of safe and effective COVID-19 diagnostics, equipment, therapeutics, and vaccines. The co-sponsors also reaffirm their support for the TRIPS Agreement, including the flexibilities it provides, and for the Doha Declaration on the TRIPS Agreement and Public Health. In this context, we invite consideration of how the existing legal framework under the TRIPS Agreement, including the flexibilities affirmed under the Doha Declaration on the TRIPS Agreement and Public Health, have operated thus far in the context of Members’ efforts to address the COVID-19 pandemic. We are also committed to fully understanding the nature and scope of any concrete IP barriers experienced by Members related to or arising from the TRIPS Agreement, and such that would constitute impediments to the fight against COVID-19. To that end, and with a view to facilitating a consensual, evidence-based approach, the co-sponsors of this communication therefore respectfully submit the following questions to Members for their consideration and response.”

The communication from Australia, Canada, Chile and Mexico then provides eight questions designed to develop a factual record of challenges faced on procurement of products, local production, compulsory licenses, as well as copyright-related challenges, industrial-designs-related challenges, and challenges from undisclosed information. The questions also include an inquiry as to “what specific legal amendments or actions would the proponents seek to enact for the prevention, containment, and treatment of COVID-19 that are not – or may not be – consistent with the TRIPS Agreement and its flexibilities?”

W671

There is a meeting of the Council for Trade-Related Aspects of Intellectual Property Rights scheduled for December 11 at the WTO. It is assumed that the only item on the agenda will be the consideration of the proposed TRIPS waiver submitted by India and South Africa and joined by four other countries. A recommendation should be forwarded to the General Council by December 31. While the proposed waiver may receive support from many WTO Members, it will be opposed by many as well as not justified and undermining the existing WTO TRIPS Agreement and built-in flexibilities. The communication from Australia, Canada, Chile and Mexico provides a possible path forward by seeking to gather factual information that would permit Members to identify what challenges actually exist and what existing tools are available for addressing the existing challenges so that the need for any waiver is limited to what is actually needed instead of being the very broad waiver proposal for all countries regardless of actual problems faced.

World COVID-19 pandemic peaks on November 26 and starts to slowly recede

The most recent surge in COVID-19 cases (up from 3.57 million cases over a fourteen day period in early August to over 5 million for fourteen days on October 22 to over 8 million new cases for fourteen days on November 17), seems to have peaked on November 26 with 8,296,264 new cases over fourteen days and has been slowly receding for the last three days, down to 8,142,629 new cases during the period November 16-29. Total cases since the end of December 2019 now stand at 62,271,031 as of November 29 according to the European Centre for Disease Prevention and Control (ECDC) publication “COVID-19 situation update worldwide, as of 29 November 2020”.

The World Health Organization puts out a publication that tracks cases and deaths on a weekly basis. COVID-19 Weekly Epidemiological Update (data as of 22 November). While it breaks countries and territories into different configuarations that the ECDC, the publication shows new cases in the period November 16-22 declining 6% in Europe and in South East Asia while increasing 11% in the Americas, 5% in the Eastern Mediterranean, 15% in Africa and 9% in the Western Pacific. Because of the large spike in cases in the September – November period in many parts of the world, deaths in the November 16-22 period increased in all regions — up 10% in Europe, 15% in the Americas, 4% in South-East Asia, 10% in the Eastern Mediterranean, 30% in Africa and 1% in the Western Pacific. The latest report is embedded below.

20201124_Weekly_Epi_Update_15

The graphs in the WHO publication show by region the trajectory of new cases and deaths over time. The chart showing aggregate data show a flattening of total new cases in the last weeks of November while the number of deaths globally are sharply increasing.

The WHO Africa region peaked in the summer and has declined until the last few weeks when there has been some increase in both cases and deaths.

The Americas saw a peak in both new cases and deaths in the July period with some declines in new cases until the second half of September when the current surge started and accelerated in November. Deaths declined until early October before starting to grow again.

The Eastern Mediterranean peaked in May-June for both cases and deaths, declined through August/September and have surged to new heights with continued upward trajectory as of November 22.

The WTO European Region had an early surge of cases and deaths in the March-April period. Deaths receded sharply through August. While new cases have increased since summer, there was a massive increase in the September – end of October period in new cases and rising deaths through November.

The WHO South-East Asia region saw a huge increase in cases and deaths in the May-August period, peaking in early September and declining since then. Much of the data for the region reflect activity in India.

The Western Pacific Region has had several peaks in terms of deaths and in new cases, though the numbers are the lowest of any WHO region. The latest peak in new cases was in early August with some increase in the October-November period. Deaths last peaked in early September and have declined through November.

The United States

Turning back to the ECDC data, the United States continues to have more confirmed cases (13,246,651) than any other nation and more confirmed deaths from COVID-19 (266,063) than any other nation. The United States is also still experiencing a surge in new cases and rising deaths. October 31 was the first day that ECDC data show the U.S. recording 100,000 new cases in a single day. Since November 5, the U.S. has had more than 100,000 new cases every day up to November 29. It is the only country to record one million new cases in a week and the only country to record two million new cases in fourteen days. For the last fourteen days, the U.S. recorded 2,341,760 new cases. The U.S., which accounts for 4.3% of the global population, accounts for 21.27% of all COVID-19 cases that have been reported since December 2019 and accounted for 28.76% of new cases in the last two weeks. The rate of increase remains high for the United States — up 31.67% from the 1,778,530 new cases in the two weeks ending November 15. There are concerns that the number of new cases will continue to increase into the new year based on the high rate of infections in many parts of the country, major potential spreading events around holidays in November (Thanksgiving) and December, and limited compliance with basic requirements for limiting the spread of the virus.

The number of deaths from COVID-19 that the U.S. accounts for has declined from roughly 20% to 18.30% as of November 29. In the last two week, while the U.S. has the largest number of deaths in the two weeks, the percent of total deaths accounted for by the U.S. in the November 16-29 period was 14.65%. However, many cities, communities and even states are at or nearing the limits of the health care capacity with hospitalizations now about 90,000, limits on health care professionals with the surging cases and some challenges on personal protective equipment. Thus, models used by the government projects a continued rise in the number of deaths in the coming months.

While the first vaccine could receive emergency approval for distribution in the U.S. as early as December 10, and the U.S. could have two or three vaccines in distribution in early 2021, the United States will unfortunately likely be a major part of the continued high rate of infections and deaths well into 2021.

Europe

While Europe had faced early challenges in a number of western European countries in February-April and very high death rates in a number of countries, the second wave of cases following the relaxation of restrictions in time for summer vacations accounted for the vast majority of the incrase in new cases during the October and early November time period. In earlier posts, I showed that Europe and the U.S. accounted for nearly all of the increase from 5 million new cases in the two weeks ending October 22 to the more than 8 million new cases in the two weeks ending November 17. See November 17, 2020, New COVID-19 cases over a fourteen day period continue to soar past eight million, up from five million on October 22, https://currentthoughtsontrade.com/2020/11/17/new-covid-19-cases-over-a-fourteen-day-period-continue-to-soar-past-eight-million-up-from-five-million-on-october-22/

While some of the major countries, including France, Italy, Spain, the United Kingdom and others have seen significant reductions in the number of new cases in recent weeks from the extraordinary figures recorded in late October, early November, numbers remain very high for a number of countries including Poland, Portugal, Serbia, Croatia, Hungary, Lithuania and Luxembourg — all of whom had new cases/100,000 population in the last fourteen days that were higher than the United States.

Because deaths lag new cases by a number of weeks, it is perhaps less surprising that much of Europe had deaths/100,000 population in the last fourteen days that were higher than the United States, most at rates that were two-three times the U.S. rate. The rate for the world in total was 1.82 deaths per 100,000 population for the November 16-29 period. The U.S. was 3.38 times the global average at 6.22 deaths per 100,000 population in that two week period. The following 25 European countries exceeded the U.S. rate: France (11.76 deaths/100,000 population); Italy (16.04); Spain (8.31); United Kingdom (9.40); Armenia (12.81); Austria (13.47); Belgium (18.84); Moldova (6.50); Poland (16.65); Portugal (10.30); Romania (11.50); Serbia (7.11); Switzerland (14.98); Bulgaria (23.69); Croatia (15.92); Czechia (18.74); Greece (11.08); Hungary (16.12); Lithuania (8.12); Luxembourg (13.19); Malta (6.79); Slovenia (19.85); Bosnia and Herzegovina (20.75); Georgia (13.19); and North Macedonia (20.12).

With new restrictions in recent weeks bringing new cases down in a number of European countries, death rates should start to decline as well in the coming weeks. Challenges in terms of superspreader events in Europe include holiday travel and events and winter holidays and sports. Germany has proposed placing restrictions on the ski season to try to minimize increased cases from a sport popular across much of Europe. See DW, 26 November 2020, Coronavirus: Germany seeks EU-wide ban on ski trips, https://www.dw.com/en/coronavirus-germany-seeks-eu-wide-ban-on-ski-trips/a-55732273.

The EU has contracts with at least six pharmaceutical companies or groups for vaccines if approved. The EU and United Kingdom will start to see vaccine dosages within weeks assuming approval in their jurisdictions.

Other countries

While much of the rest of the world has not seen great increases in the number of cases that is not true for all countries. For example, Iran which had 136,753 new cases in the November 2-15 period showed 186,274 new cases in the November 16-29 period (+36.21%). Jordan, which has a total number of cases of 210,709 since the end of December has recorded 65.54% of that total in the last four weeks (68,698 new cases during November 2-15; 69,404 new cases during November 16-29). Similarly, Morocco which has a total of 349,688 cases since December 2019 has more than 37% recorded in the last four weeks (69,127 during November 2-15; 61,477 during November 16-29).

In the Americas the following countries in addition to the United States have two week totals to November 29 greater than 100,000 new cases: Argentina (108,531); Brazil (441,313); Colombia (108,609). The following countries besides the United States have more than one million cases since late December 2019: Argentina (1,413,362); Brazil (6,290,272); Colombia (1,299,613), Mexico (1,100,683). Eleven other countries have more than 100,000 cases (with Peru having 960,368). Other than the U.S., countries are facing different trend lines, many down, some showing increases (e.g., Brazil, Canada, Dominican Republic, Paraguay).

In Asia, while India continues to see declines in the number of new cases, Indonesia, Israel, Japan, Kazakhstan, Malaysia, Pakistan, Palestine, South Korea, showed increased in the most recent two weeks, some quite large. This is in addition to Iran reviewed previously.

In Africa, South Africa has the most cases and saw an increase from 23,730 new cases during November 2-15 to 35,967 during November 16-29. Morocco was reviewed above. Most other major countries in Africa saw declines in recent weeks.

Conclusion

The world in the first eleven months of 2020 has struggled to get the COVID-19 pandemic under control with several major surge periods. The global number of new cases seems to have plateaued over the last week or so at extraordinarily high levels and the death rates has been climbing after a long period where deaths appeared to be declining. It is likely that the death rate will continue to increase for the rest of 2020.

After a period during the summer and early fall where restrictions in a number of countries were being relaxed, many countries in the norther hemisphere are reimposing various restrictions in an effort to dampen the spread of the coronavirus. While trade has significantly rebounded from the sharp decline in the second quarter of 2020, services trade remains more than 30% off of 2019 levels driven by the complete collapse of international travel and tourism. Many WTO members have put forward communications on actions that could be considered to speed economic recovery. The most recent was the Ottawa Group’s communication about a possible Trade and Health Initiative. See November 27, 2020, The Ottawa Group’s November 23 communication and draft elements of a trade and health initiative, https://currentthoughtsontrade.com/2020/11/27/the-ottawa-groups-november-23-communication-and-draft-elements-of-a-trade-and-health-initiative/.

The WTO TRIPS Council has a request for a waiver from most TRIPS obligations for all WTO Members on medical goods and medicines relevant to COVID-19 on which a recommendation is supposed to be forwarded to the General Council by the end of 2020 though it is opposed by a number of major Members with pharmaceutical industries. See 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/.

With vaccines very close to approval in major markets like the United States and the European Union, there will be increased focus on efforts to ensure availability of vaccines and therapeutics and diagnostics globally on equitable and affordable terms. GAVI, CEPI and the WHO have been leading this initiative with the support of many governments and private sector players. Pharmaceutical companies also have global distribution plans being pursued in addition to the above efforts.

So there hopefully is light at the end of the tunnel that the COVID-19 pandemic has imposed on the world. But vaccines without vaccinations won’t solve the pandemic’s grip. So communication and outreach globally will be critical to seeing that available vaccines are properly used. And all peoples need to be able to access the vaccines, some of which will be less available simply because of the infrastructure needs to handle the vaccines.

Trade policy options to minimize trade restrictions coupled with global cooperation and coordination should result in the world being able to rebuild in 2021 and beyond as more and more of the world is vaccinated.

Multilateral efforts to help the poorest countries deal with debt, make available trade finance and other actions continue to be a pressing need. Better plans and preparation for pandemics of the future are clearly needed. Reports suggest that many of the poorest countries have experienced loss of a decade or more of economic advancement during the pandemic. Building back greener and in a sustainable manner is critical for all.

The efforts of developed country governments and others to provide the stimulus domestically to reduce the downward spiral of the individual national economies and the global economy has been critical to limiting the damage at home and abroad. But the assumption of large amounts of debt will also pose significant challenges moving forward because of the greatly heightened national debt/GDP ratios that have developed and may restrict options for individual governments moving forward.

What is certain is that 2020 will be remembered as a year in which a virus inflicted enormous damage to the global health and to the global economy. Collectively, the level of spread has been far greater than should have been possible. Many nations were not prepared. Some, like the United States, exacerbated the problems through a lack of national government planning and messaging. Others like many in Europe, having done a good job of controlling the spread in the early months, made major mistakes as they opened up for summer vacations and didn’t deal with the problems that resulted from the reopening and experienced breathtaking surges which roughly doubled the global daily rate of new cases in five-six weeks and have led to the reimposition of a series of restrictions to try to tame the pandemic a second time. We collectively are better than the results achieved to date. The number of deaths in advanced countries is simply disgraceful.

2021 offers the opportunity for the world to come together and put COVID-19 behind us. Whether we will come to the end of 2021 and feel that this global nightmare is behind us and that there are national and global game plans to rebuild in a greener and more sustainable manner with greater opportunities for all is the question. Hopefully, the answer will be yes.