Colombia

COVID-19 vaccines — role of WTO and developments at May 5-6, 2021 General Council meeting on TRIPS Waiver

As the COVID-19 pandemic continues to create problems around the world, there has been increased activity in many countries and at multilateral organizations seeking to expand COVID-19 vaccine production and increase access to vaccines for low- and middle-income countries. While a number of vaccines have been approved by one or more countries (usually on an emergency use authorization basis) and a few have been approved the World Health Organization, a number of others are seeking approval or are in final stages of trials.

The European Centre for Disease Prevention and Control now issues a weekly update on the COVID-19 situation worldwide. Today’s release of data for week 17 of 2021 shows global cases since the beginning at 153,220,576 of which the Americas has the largest share with 41.16% (63,068,547 cases; U.S. being 32.4 million; Brazil being 14.8 million; Argentina being 3.0 million; Colombia being 2.9 million and Mexico being 2.3 million). Europe is second with 33.10% of the total cases (50,722,884; France with 5.7 million, Turkey with 4.9 million, Russia with 4.8 million, the U.K. with 4.4 million and Italy with 4.0 million). Asia represents 22.70% of cases (34,785,351 of which India is 19.9 million, Iran is 2.5 million, Indonesia is 1.7 million, Iraq is 1.1 million and the Philippines is 1.1 million). Africa accounts for 2.98% of cases (4,571,789 of which South Africa has reported 1.6 million and no other countries have more than 0.5 million). Oceania accounts for 0.05% of cases (71,300). See European Centre for Disease Prevention and Control, COVID-19 situation update worldwide, as of week 17, updated 6 May 2021, https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases.

Deaths are similarly distributed globally with the Americas having 47.79% of global deaths (1,533,740 of 3,209,416); Europe having 33.47% (1,074,175), Asia having 14.89% (477,851), Africa having 3.81% (122,304) and Oceania having 0.04% (1,340). Id.

The world has seen increases in new cases for the last ten weeks in a row and has had the highest number of cases per week in the most recent weeks as the copied graphic from today’s ECDC publication shows.

Distribution of COVID-19 cases worldwide, as of week 17 2021

Distribution of COVID-19 cases worldwide, as of week 17 2021
“Distribution of cases of COVID-19 by continent (according to the applied case definition and testing strategies in the affected countries)

“Cases reported in accordance with the applied case definition and testing strategies in the affected countries.”

As the news accounts make clear, India is facing major challenges and has accounted for a very large part of new cases in recent weeks. For example, over the last 14 days, India reported 4.86 million new cases. This is the first time any country has amassed more than four million cases in a two week period. India has accounted for 42.61% of the world total of new cases in that two week period. Id.

Press accounts have shown a health care system in India struggling to keep up with shortages of everything from ICU units to PPE to medications to oxygen and with a small part of the population totally vaccinated or having received the first of two shots. BBC News, Coronavirus: How India descended into Covid-19 chaos, 5 May 2021, https://www.bbc.com/news/world-asia-india-56977653.

In response to its internal crisis, India has diverted production of COVID-19 vaccines to domestic use, essentially halting exports, complicating the efforts of the COVAX facility to get vaccines to the 91 low- and middle-income countries (other than India which also is supposed to receive vaccines from COVAX). While COVAX has shipped more than 53 million doses to 121 countries as of May 4, as much as 90 million additional vaccine doses were supposed to be supplied by Indian producers to COVAX during April and May that will not make it into the system. See, e.g., Gavi, COVAX vaccine rollout, https://www.gavi.org/covax-facility; Gavi, COVAX updates participants on delivery delays for vaccines from Serum Institute of India (SII) and AstraZeneca, 25 March 2021, https://www.gavi.org/news/media-room/covax-updates-participants-delivery-delays-vaccines-serum-institute-india-sii-az.

Considering the challenges that India is facing, many nations have been providing assistance in an effort to support India as it attempts to cope with the current surge of cases, hospitalizations and deaths. The U.S. assistance is summarized in a fact sheet from the White House which is embedded below.

FACT-SHEET_-Biden-Harris-Administration-Delivers-Emergency-COVID-19-Assistance-for-India-_-The-White-House

A number of countries in South America are also seeing major problems — e.g., Brazil, Argentina, Colombia, Peru — though receiving far less attention than India.

Vaccination development, production and distribution

Efforts have been made over the last decade to develop tools and organizations to develop, produce and distribute vaccines to achieve greater equity in access and affordability of vaccines. The WHO, Gavi, CEPI and UNICEF along with important private sector actors like the Bill and Melinda Gates Foundation have worked hard to both support research of potential vaccines to address the COVID-19 pandemic, worked with companies to arrange purchases of vaccines if approved for use, raised funds from governments and private sector participants to pay for the efforts on research and procurement, and organized distribution to the 92 low- and middle-income countries sufficient to address 20% of the populations as well as for any other countries choosing to work through the COVAX facility.

At the same time, a number of countries have negotiated contracts with companies developing vaccines. Because at the time of contracting, it was not known which vaccines would be effective or achieve approval from which governments, major advanced economies often contracted for quantities far in excess of likely needs (assuming all vaccines were eventually approved).

Because of the unprecedented government funding and industry cooperation, a number of vaccines were developed and approved on at least an emergency use basis and production efforts began in late 2020 and have been ramping up in 2021. This includes vaccines developed in the U.S., the European Union, the United Kingdom, China, India and Russia. While all have not yet been approved by the WHO, all have been approved by at least a number of governments. A number of others are either in the approval process or in final stage trials with vaccine approvals likely in the second half of 2021.

It is expected that capacity to produce more than 10 billion doses of vaccines to fight COVID-19 will be operational by the end of 2021. COVAX contracts and deliveries to economies outside of COVAX have anticipated relatively small volumes in the 1st quarter of 2021, with increases in each of the next three quarters. UNICEF has a “COVID-19 Vaccine Market Dashboard” which it describes as follows (https://www.unicef.org/supply/covid-19-vaccine-market-dashboard):

“The COVID-19 Vaccine Market Dashboard is the go-to public resource for the latest information on the world’s COVID-19 vaccine market and the COVAX Facility’s vaccine deliveries.

“From a global vaccine market perspective, the dashboard gives an overview of:  

“- COVID-19 vaccine development and progress towards vaccine approvals

“- Reported global vaccine production capacity

“- Manufacturing agreements  

“- Vaccines secured and optioned through bilateral and multilateral supply agreements  

“- Reported vaccine prices

“The ‘Delivery’ tab of the dashboard provides daily updates on total COVAX vaccine deliveries, doses allocated, and doses ordered. It also includes country- and economy level data on vaccine deliveries and planned shipments over a seven-day period. This information covers both UNICEF-procured doses and deliveries, as well as other national and institutional buyers participating in the COVAX Facility. It further tracks globally reported vaccine deliveries and vaccine donations outside of COVAX.”

For example, looking at the capacity figures from the dashboard by development stage shows 4 billion dose capacity approved for use in the first half of 2021, growing to 8 billion dose capacity approved for use in the second half of 2021, with 19 billion dose capacity projected for each of 2022 and 2023 as being approved for use.

There have been challenges in ramping up production, including manufacturing issues at individual companies, bottlenecks in supply chains for particular inputs, export restrictions in place for some, etc. In prior posts I have reviewed data pulled together by industry and others on the challenges as well as the enormous level of voluntary licensing, and other arrangements to grow capacity and production. Industry estimates have consistently been that capacity will be at 10-15 billion doses by the end of 2021 — an extraordinary accomplishment considering global capacity for vaccines previously (roughly 5 billion doses for all vaccines). See, e.g., April 18, 2021, WTO’s April 14th virtual meeting to review COVID-19 vaccine availability, https://currentthoughtsontrade.com/2021/04/18/wtos-april-14th-virtual-meeting-to-review-covid-19-vaccine-availability/ (” One of the private sector participants, the International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) included its statement on the IFPMA website. See IFPMA, IFPMA statement at WTO event ‘COVID-19 and Vaccine Equity: What can the WTO Contribute’, 14 April 2021, https://www.ifpma.org/resource-centre/ifpma-statement-at-wto-event-covid-19-and-vaccine-equity-what-can-the-wto-contribute/. The IFPMA statement is embedded below but highlights the extraordinary effort of the private sector in ramping up production which is expected to be 10 billion doses by the end of 2021 with some 272 partnerships entered into and 200 technology transfer agreements.” (emphasis added)); April 13, 2021, April 15, 2021 — U.S and Gavi co-host event for additional funding for COVAX amid concerns about two workhorse vaccines for COVAX, ttps://currentthoughtsontrade.com/2021/04/13/april-15-2021-u-s-and-gavi-co-host-event-for-additional-funding-for-covax-amid-concerns-about-two-workhorse-vaccines-for-covax/; April 8, 2021, COVAX delivers COVID-19 vaccines to 100th country; India surge in infections likely to reduce product availability for COVAX through May and likely longer, https://currentthoughtsontrade.com/2021/04/08/covax-delivers-covid-19-vaccines-to-100th-country-india-surge-in-infections-likely-to-reduce-product-availability-for-covax-through-may-and-likely-longer/; April 2, 2021, Global vaccinations against COVID-19; developments and challenges in the roll-out for many countries, https://currentthoughtsontrade.com/2021/04/02/global-vaccinations-against-covid-19-developments-and-challenges-in-the-roll-out-for-many-countries/; March 25, 2021, 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, https://currentthoughtsontrade.com/2021/03/25/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/; 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/; March 12, 2021, The 8-9 March  “Global C19 Vaccine Supply Chain and Manufacturing Summit” – efforts to ramp-up production, https://currentthoughtsontrade.com/2021/03/12/the-8-9-march-global-c19-vaccine-supply-chain-and-manufacturing-summit-efforts-to-ramp-up-production/; 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/; March 4, 2021, Italy blocks exports of COVID-19 vaccines to Australia, first blockage of export authorization by the EU or its member states, https://currentthoughtsontrade.com/2021/03/04/italy-blocks-exports-of-covid-19-vaccines-to-australia-first-blockage-of-export-authorization-by-the-eu-or-its-member-states/; March 4, 2021, The EU’s response to challenges to its actions on COVID-19 vaccine exports, https://currentthoughtsontrade.com/2021/03/04/the-eus-response-to-challenges-to-its-actions-on-covid-19-vaccine-exports/; March 3, 2021, WTO Director-General opinion piece in the Financial Times and recent actions by the U.S., https://currentthoughtsontrade.com/2021/03/03/wto-director-general-opinion-piece-in-the-financial-times-and-recent-actions-by-the-u-s/; March 1, 2021, WTO Director-General Ngozi Okonjo-Iweala’s opening statement at the March 1 General Council meeting, https://currentthoughtsontrade.com/2021/03/01/wto-director-general-ngozi-okonjo-iwealas-opening-statement-at-the-march-1-general-council-meeting/.

As of May 5, 3032, Bloomberg reports that more than 1.21 billion COVID-19 doses have been administered. The top six areas for vaccinations are China (284.6 million doses administered), the United States (249.6 million), India (162.4 million), the EU (158.6 million), the U.K. (50.7 million) and Brazil (50.2 million). See Bloomberg, More Than 1.21 Billion Shots Given: Covid-19 Tracker, updated May 5, 2021 at 5:38 p.m. EDT, https://www.bloomberg.com/graphics/covid-vaccine-tracker-global-distribution/. Not surprisingly, with the exception of China which has one of the lowest rates of infection of any country in the world, vaccinations have been concentrated in countries with high rates of infection — both developed and developing.

Because of the disruption in supplies from India because of their current challenges, far fewer doses have been administered in low-income countries as COVAX is behind its schedule for deliveries. There are, of course, other challenges in a number of low-income countries, where poor health care infrastructure has resulted in many of the vaccine doses that have been received not being used. See NPR, They Desperately Need COVID Vaccines. So Why Are Some Countries Throwing Out Doses?, May 5, 2021, https://www.npr.org/sections/goatsandsoda/2021/05/05/991684096/they-desperately-need-covid-vaccines-so-why-are-some-countries-throwing-out-dose (“It seems incredible: At a time when low-income nations are clamoring for vaccines against COVID-19, at least three countries — Democratic Republic of Congo, Malawi and South Sudan — are either discarding doses or giving them to other countries. What’s going on?”).

The Proposal for a TRIPs Waiver from India and South Africa

Back in October 2020, India and South Africa filed a proposal for a waiver from many TRIPS Agreement obligations for all WTO Members for a period of years on vaccines, therapeutics and other medical goods relevant to handling the COVID-19 pandemic. There has not been agreement within the TRIPS Council on approving the proposed waiver with a number of advanced pharmaceutical producing countries (U.S., EU, U.K., Switzerland) opposing the proposal or disagreeing that a waiver would address the current availability challenges. The issue has been discussed on a number of occasions in the TRIPS Council. See, e.g., WTO press release, TRIPS Council to continue to discuss temporary IP waiver, revised proposal expected in May, 30 April 2021, https://www.wto.org/english/news_e/news21_e/trip_30apr21_e.htm. There have also been efforts to identify challenges to increasing capacity and production faster and addressing concerns over equitable access. Those issues have been addressed in prior posts, listed above.

There has been considerable pressure from NGOs and, in the U.S., from Democratic members of Congress to agree to the waiver despite concerns within the Biden Administration on whether agreeing to a waiver would actually improve production or access. The Biden Administration in late April announced its decision to make 60 million doses of AstraZeneca vaccines available for redistribution in the coming months (including 10 million doses in current inventory once FDA approves release). AstraZeneca has not yet applied for authorization for its vaccine in the United States, and the U.S. believes it has sufficient other supplies to permit sharing the 60 million doses expected to be available through June. See Financial Times, U.S. plans to share 60m doses of AstraZeneca’s Covid vaccine, 26 April 2021, https://www.ft.com/content/db461dd7-b132-4f08-a94e-b23a6764bdb3. And as part of the relief the U.S. is providing to India, the U.S. has directed inputs for 20 million doses of the AstraZeneca vaccine to be sent to India instead of to U.S. facilities.

Leading nations through groupings like the G-7, G-20 and others have been looking at the options for further increasing production in the coming months to give greater coverage, as well as looking at sending doses not needed to COVAX or particular countries in need. See, e.g., Gavi, France makes important vaccine dose donation to COVAX, 23 April 2021, https://www.gavi.org/news/media-room/france-makes-important-vaccine-dose-donation-covax.

On May 5, 2021, the G-7 Foreign Ministers completed a meeting in London and issued a communique which included language about access to vaccines. The G-7 consists of Canada, France, Germany, Italy, Japan, the United States and the United Kingdom with the European Union as an observed. The U.K. as host also invited Australia, South Korea, India, South Africa and Brunei (as Chair for the ASEAN group of countries). The communique from the G-7 and the EU can be found here and the section on access to vaccines is copied below. See G7 Foreign and Development Ministers’ Meeting Communiqué, London, May 5, 2021, https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/983631/G7-foreign-and-development-ministers-meeting-communique-london-5-may-2021.pdf.

“Enabling equitable global access to Covid-19 Vaccines, Therapeutics and Diagnostics (VTDs)

“62. We affirm our belief that commitment to an open, transparent and multilateral approach is essential in responding to the global health impacts of Covid-19. A global health emergency on this scale requires co-ordinated action and global solidarity. We reaffirm our support for all existing pillars of Access to Covid-19 Tools Accelerator
(ACT-A), including its COVAX facility. We recognise that equipping the ACTAccelerator with adequate funding is central. We support the strengthening of health systems, and affordable and equitable global access to vaccines, therapeutics and diagnostics, and we will further increase our efforts to support affordable and equitable access for people in need, taking approaches consistent with members’ commitments to incentivise innovation. We recall in this regard the Charter for Equitable Access to Covid-19 Tools. We recognise the importance of effective and well-functioning global
value chains for VTD supply and will work with industry to encourage and support on a voluntary basis and on mutually agreed terms, including licensing, technology and know-how transfers, contract manufacturing , transparency, and data sharing, public private costs and risk sharing.
We recognise the need to enable a sustainable environment for local, regional and global productions, beyond Covid-19 products for long-term impact. We welcome the collective G7 commitments of over $10.7 billion USD to date in funding to these initiatives and encourage all partners to increase their support as the next critical step in controlling the pandemic and strengthening health security. In this context, we look forward to the COVAX Advance Market Commitment (AMC) Summit to be co-hosted by Gavi and Japan following the COVAX AMC One World Protected Event co-hosted by Gavi and US. (Emphasis added)

“63. We commit to the G7 Foreign and Development Ministers’ Equitable Access and Collaboration Statement to help accelerate the end of the acute phase of the Covid19 pandemic. We commit to supporting COVAX financially, including by encouraging pledges to the Facility, including at the COVAX AMC Summit in June, disbursing as soon as possible, providing in-kind contributions, and coordinating with and using COVAX, which is the key mechanism for global sharing of vaccines to supplement its own direct procurement, to enable the rapid equitable deployment of vaccines.

“64. We support the work of G7 Health Ministers and continued G7 efforts to work with partners to improve pandemic preparedness and global health security, with WHO as the leading and co-ordinating authority, to strengthen health systems, develop solutions that embed a One Health approach, tackle antimicrobial resistance, and accelerate progress towards universal health coverage and the health-related Sustainable Development Goals. We welcome the establishment of the One Health High Level Experts Panel supported by WHO, FAO, OIE and UNEP. We are determined to ensure that lessons are learned and applied from the pandemic. We look forward to the forthcoming G20 Global Health Summit in Rome and to its Declaration, and to further close cooperation on strengthening the global health
architecture, including longer-term considerations such as exploring the potential value of a global health treaty, to strengthen global pandemic preparedness and response. We will deploy our foreign and development policies and programmes to build a more resilient world that is better protected against health threats, including encouraging new public health guidance in consultation with national and relevant international organisations on international travel by sea or air, including cruise ships, and supporting an expert-driven, transparent, and independent process for the next
phase of the WHO-convened Covid-19 origins study, and for expeditiously investigating future outbreaks of unknown origin. Together with G7 Health Ministers, we commit to work in partnership with low- and lower-middle income countries by improving coordination of G7 support for, and collaboration with, public health and health security capacities and their regional bodies in Africa, Asia and other regions, building on the G7 commitment to support implementation of and compliance with the International Health Regulations (IHR) in 76 countries, taking into account the recommendations from the IHR Review Committee. We will align with and support national and regional health priorities and leadership to improve public health. We look forward to the publication of the G7 Carbis Bay Progress Report on global health and what we can learn from its conclusions on G7 commitments to strengthening health systems to advance universal health coverage and global health security.

“65. We note the continuing need to support health systems and health security and secure sustainable financing, together with partner countries’ domestic resources, to help accelerate global vaccine development and deployment, recover and then sustain access to essential health and nutrition services and health commodities, including in
humanitarian settings and for sexual and reproductive health and rights, and to bolster the global health architecture for pandemic preparedness, including through stronger rapid response mechanisms. We look forward to working with G7 Finance Ministers to build consensus on practical actions to facilitate access to existing global financing
sources to meet demands for access to Covid-19 vaccines, therapeutics and diagnostics, as well as how best to tackle the ACT-A funding gaps, with the aim of shortening the lifespan of the pandemic and with particular focus on the needs of vulnerable countries. In this regard, we look forward to the outcomes of the Independent Panel for Pandemic Preparedness and Response (IPPPR) initiated by the WHO, and the High Level Independent Panel on financing the global commons for pandemic preparedness and response (HLIP) established by the G20.”

At the same time that G-7 foreign ministers were concluding their work in London, the WTO was holding the first of two days of a General Council meeting. The WTO’s Director-General Ngozi Okonjo-Iweala urged the resolution of addressing equitable access to vaccines. The U.S. Trade Representative issued a statement changing the U.S. position (and contradicting what they had agreed with other G-7 foreign ministers hours before) by indicating that the U.S. would support the waiver of TRIPS rights and obligations during the pandemic and would work on text in the TRIPS Council to see if a consensus could be achieved. The Director-General’s statement from May 5, the USTR statement and the Director-General’s comments on the USTR statement are embedded below.

WTO-_-News-Speech-DG-Ngozi-Okonjo-Iweala-General-Council

Statement-from-Ambassador-Katherine-Tai-on-the-Covid-19-Trips-Waiver-_-United-States-Trade-Representative

WTO-_-2021-News-items-Statement-of-Director-General-Ngozi-Okonjo-Iweala-on-USTR-Tais-statement-on-the-TRIPS-waiver

While the pharmaceutical industry in advanced countries is unquestionably shocked by the shift in U.S. position (and stocks of vaccine producers suffered stock market price declines on May 5), the EU President has indicated a willingness to look at the issue and the French President has indicated his support of the U.S. position. See Financial Times, Pharma industry fears Biden’s patent move sets dangerous precedent, 6 May 2021, https://www.ft.com/content/f54bf71b-87be-4290-9c95-4d110eec7a90; The Guardian, EU ‘ready to discuss’ waiver on Covidvaccine patents, 6 May 2021, https://www.theguardian.com/world/2021/may/06/eu-ready-to-discuss-waiver-on-covid-vaccine-patents (“The head of the European Commission, Ursula von der Leyen , has said the bloc is ‘ready to discuss’ a US-backed proposal for a waiver on the patents for Covid-19 vaccines and the French president, Emmanuel Macron, said he was ‘absolutely in favour’ of the plan as pressure built for a move that could boost their production and distribution around the world.”).

The concerns of industry have been identified in prior posts of mine and are summarized in yesterday’s Financial Times article on what if any benefit there will be should a waiver be agreed to. See Financial Times, Will a suspension of Covid vaccine patents lead to more jabs?, 6 May 2021, https://www.ft.com/content/b0f42409-6fdf-43eb-96c7-d166e090ab99 (“[T]he drug makers’ main argument is that waiving intellectual property is not the solution. Vaccine makers have already pulled out all the stops to supply billions of doses at an unprecedented speed, including signing unusual partnerships with rivals to expand production. Moderna put its patents online last summer but they are not useful alone.”).

The Road Forward

It is unclear where the process at the WTO goes from here. The WTO TRIPS Council is expecting a revised document from India and South Africa in May that arguably could become the basis for WTO Members, including the U.S. and EU and others who have been opposed to a waiver, to consider and negotiate from. If a consensus emerges around a text, then it would go to the General Council for a vote/approval. But while the formal process is understood, it is unclear what an agreement would actually look like. It is hard to imagine that the U.S., EU, Switzerland, Japan and possibly others would agree to waive the pharmaceutical companies rights within their own territories. So there is a question whether rights could be waived selectively? If so, what possible liability would exist for governments and/or companies exploiting the IP rights of others? It is unclear if there will be a requirement for some/all countries who engage in use of others intellectual property to provide compensation similar to a compulsory license fee. Will countries that have existing voluntary licensing agreements with producers be able to void those agreements or have the same IP rights used by other companies? Will there be limitations on where goods produced can be shipped (e.g., only to low- and middle-income countries)? What will the basis be for getting IP holders to transfer technology where there is no compensation? There are undoubtedly dozens of other issues that the industry and their lawyers have besides the above. If waiver is the direction the world goes, presumably there needs to be transparency and full opportunity for vetting proposals so that all issues are identified, understood and properly addressed.

In my prior posts, I have argued that to date vaccines have largely gone to the countries with large levels of infections and deaths. Those pushing for greater equity in access based on a simple percent of global population approach abandon those concerns when a large developing country runs into a surge and finds itself in serious difficulty, such as is happening with India. I support targeting relief to address fire situations like India. See April 29, 2021, COVID-19 — Efforts to help India during its current surge of cases, hospitalizations and deaths, https://currentthoughtsontrade.com/2021/04/29/covid-19-efforts-to-help-india-during-its-current-surge-of-cases-hospitalizations-and-deaths/. There are equally important fire situations in other countries that deserve the attention and concern of the world as well.

The WTO has been and should be encouraging Members to eliminate export restrictions as quickly as possible. The new Director-General has used the power of convening to probe what are the barriers to increased production and greater distribution to low- and middle-income countries. Many of the barriers are bottlenecks in supply chains, shortages of various inputs as the industry drastically ramps up production of vaccines, lack of trained personnel in some countries where there may be existing vaccine capacity for other vaccines. Governments can and should be working with industry to address bottlenecks on an expedited basis. Encouraging voluntary licensing is useful and there are some 272 agreements around the world already in place with others being worked on. However, as Johnson & Johnson’s experience (where it talked to 100 companies but only found 10 they could work with) shows, the presence of a facility in a country is not the same as a facility with trained personnel who can actually produce a safe vaccine of the types currently approved for use on COVID-19.

The biggest short term availability of more supplies for low- and middle-income countries is not from the waiver but rather from governments redirecting volumes that are not needed for their own populations. The U.S. and EU are each starting that, but more can and should be done. Such actions have real potential.

Similarly, pursuit of new vaccines, such as one being tested in a number of developing countries that is far lower cost than some currently being used to vaccinate against COVID-19 and which apparently can be easily used in many countries in existing vaccine facilities makes a lot of sense. See New York Times, Researchers Are Hatching a Low-Cost Coronavirus Vaccine, A new formulation entering clinical trials in Brazil, Mexico, Thailand and Vietnam could change how the world fights the pandemic, April 5, 2021, updated April 17, 2021, https://www.nytimes.com/2021/04/05/health/hexapro-mclellan-vaccine.html.

While there are lots of groups and individuals arguing there is a moral imperative to wave the IP rights of pharmaceutical companies during the global pandemic, there is little practical evidence that such an approach will get the world to the place presumably everybody wants — the quickest curtailment of the pandemic for the benefit of all.

Time will tell whether an effort to negotiate a waiver is an aid or a hindrance to actually ending the pandemic.

U.S. blocks inclusion of Venezuelan request for panel on U.S. sanctions at WTO, Dispute Settlement Body meeting of March 26, 2021 postponed

The monthly regular meeting of the WTO Dispute Settlement Body was scheduled for March 26, 2021. The proposed agenda was circulated earlier and contained as item 4, “United States – Measures Relating to Trade in Goods and Services, A. Request for the Establishment of a Panel by Venezuela (WT/DS54/2/Rev.1)”. See Dispute Settlement Body, 26 March 2021, Proposed Agenda, WT/DSB/W/679 (24 March 2021). For background, the Venezuelan request for a panel is embedded below.

WTDS574-2R1

The United States objected to the inclusion of agenda item 4. USTR released a short statement on March 26. “The United States will reject any effort by Maduro to misuse the WTO to attack U.S. sanctions aimed at restoring human rights and democracy to Venezuela. The United States exercised its rights as a WTO Member to object to this illegitimate panel request because representatives of the Maduro regime do not speak on behalf of the Venezuelan people.” See USTR, Statement from USTR Spokesperson Adam Hodge on U.S. Action to Prevent Maduro Regime’s Attempt to Undermine U.S. Sanctions, March 26, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/march/statement-ustr-spokesperson-adam-hodge-us-action-prevent-maduro-regimes-attempt-undermine-us.

Venezuela did not agree to withdraw its request for a panel from the agenda with the result that Dispute Settlement Body meetings cannot proceed until there is a resolution. See Blomberg, U.S. Disrupts WTO Dispute Meeting Over Venezuela Sanctions Fight, March 26, 2021, https://www.bloomberg.com/news/articles/2021-03-26/u-s-disrupts-wto-dispute-meeting-over-venezuela-sanctions-fight (“The meeting ended prematurely after Venezuela refused Washington’s demand that the WTO remove Venezuela’s dispute request from the meeting agenda, according to the official attending the meeting. The impasse means that the WTO can’t hold any regular dispute settlement meetings unless and until the U.S. or Venezuela back down.”); Inside U.S. Trade’s World Trade Online, WTO: DSB meeting postponed over U.S. objection to Venezuela panel request, March 26, 2021, https://insidetrade.com/daily-news/wto-dsb-meeting-postponed-over-us-objection-venezuela-panel-request; Reuters, U.S. blocks Venezuela bid to seek WTO review of sanctions, March 26, 2021, https://www.reuters.com/article/us-trade-wto-usa-venezuela/u-s-blocks-venezuela-bid-to-seek-wto-review-of-sanctions-idUSKBN2BI1ZT (“Were the United States and other members to allow representatives of the illegitimate Maduro regime to exercise rights at the WTO on behalf of Venezuela, it would be tantamount to recognizing the Maduro regime itself,” the official said. “This would be contrary to the Biden-Harris administration’s firm policy supporting the people of Venezuela.”).

Background

The Maduro government in Venezuela is viewed as illegitimate by the United States and dozens of other governments based on the 2013 election. The U.S. has recognized Juan Guaido as the interim President and has imposed a series of sanctions on Venezuela and the Maduro government. While the sanctions were imposed during the Trump Administration, no changes have yet occurred in the Biden Administration. A 2020 write-up from the State Department describes the problems and justifications for the sanctions. See U.S. Department of State, U.S. Relations With Venezuela, Bilateral Relations Fact Sheet, Bureau of Western Hemisphere Affairs, July 6, 2020, https://www.state.gov/u-s-relations-with-venezuela/. Much of the fact sheet is copied below.

U.S.-VENEZUELA RELATIONS

“The United States recognizes Interim President Juan Guaido and considers the Venezuelan National Assembly, which he currently leads, to be the only legitimate federal institution, according to the Venezuelan Constitution. Nearly sixty other countries have joined in this recognition.

“The United States works with Interim President Juan Guaido and his team on a number of areas of mutual concern, including humanitarian and migration issues, health issues, security, anti-narcotrafficking initiatives, and reestablishment of the rule of law. The United States proposed a Democratic Transition Framework in 2020 as a guide to help Venezuelan society achieve a peaceful, democratic transition. Venezuela’s previous presidents, the late Hugo Chavez (1999-2013) and Nicolas Maduro (2013-2019), defined themselves in large part through their opposition to the United States, regularly criticizing and sowing disinformation about the U.S. government, its policies, and its relations with Latin America. Maduro, who was not reelected via free and fair elections, clings to power through the use of force. His policies are marked by authoritarianism, intolerance for dissent, and violent and systematic repression of human rights and fundamental freedoms – including the use of torture, arbitrary detentions, extrajudicial killings, and the holding of more than 400 prisoners of conscience. Maduro has been sanctioned by the Office of Foreign Assets Control, and in 2020 the Department of Justice charged him with offenses related to narco-terrorism and drug trafficking The U.S. Department of State’s Bureau of International Narcotics and Law Enforcement (INL) posted a $15-million reward for information to bring him to justice. The Maduro regime’s irresponsible intervention in the economy has facilitated widespread corruption and stoked hyperinflation leading to negative economic growth and a humanitarian crisis, including food, energy, and water shortages, in a country with the world’s largest proven oil reserves.

“U.S. Assistance to Venezuela

“Through its assistance to the legitimate Guaido Interim Government and democratic organizations within and outside Venezuela, the United States supports the protection of human rights, the promotion of civil society, the strengthening of democratic institutions, and transparency and accountability in the country. From Fiscal Year (FY) 2014 to 2019, the United States has committed approximately $58.6million in bilateral democracy assistance to Venezuela. Assistance to Venezuela is subject to a number of restrictions, including those under Section 706(1) of the Foreign Relations Authorization Act, Fiscal Year 2003 (P.L. 107-228) (the so-called Drug Majors restriction), the Trafficking Victims Protection Act, and restrictions contained in the annual appropriations laws

“Since 2005, the President has determined annually that Venezuela, and more recently the illegitimate Maduro regime, has “failed demonstrably” to adhere to its drug control obligations under international counternarcotics agreements. The President has issued a national interest waiver to enable certain assistance programs vital to the national interests of the United States, such as human rights and civil society programs, to continue.

“Pursuant to Section 40A of the AECA, since 2006 the Department of State has determined annually that Venezuela was “not cooperating fully” with U.S. counterterrorism efforts. Under this provision, defense articles and services may not be sold or licensed for export to Venezuela during the relevant fiscal year.

“U.S. Assistance in Response to the Venezuela Regional Crisis

“The United States is answering Interim President Guaido’s call to help the people of Venezuela cope with severe food, water, energy, and medicine shortages. Since FY 2017, the United States has provided more than $856 million in assistance to support the response to the crisis inside Venezuela and the region, which includes $611 million in humanitarian assistance and $245 million in economic and development assistance. The United States is the single largest donor to the combat the crisis, and supports sixteen countries hosting Venezuelan refugees. USG-provided humanitarian assistance addresses critical life-saving needs, including food and nutrition, water, sanitation, hygiene and health, and temporary shelter. Our development assistance is helping countries throughout Latin America and the Caribbean meet longer term needs, such as education deficits, caused by the man-made regional crisis.

“Bilateral Economic Relations

“Before the United States suspended diplomatic operations in Venezuela, the United States was Venezuela’s largest trading partner. Bilateral trade in goods between both countries reached $3.2 billion in 2019. U.S. goods exports to Venezuela totaled $1.2 billion in 2019. U.S. imports from Venezuela totaled $1.9 billion. U.S. exports to Venezuela have historically included petroleum and refined petroleum products, machinery, organic chemicals, and agricultural products. Crude oil dominated U.S. imports from Venezuela, which was one of the top five suppliers of foreign oil to the United States. In early 2019, imports of Venezuelan crude oil averaged roughly 500,000 barrels per day, but sanctions imposed by the United States have now cut this to zero. Previously, U.S. foreign direct investment in Venezuela was concentrated largely in the petroleum sector, but sanctions, coupled with the poor business environment, have significantly reduced these investment.

“Hyperinflation, state intervention in the economy including expropriations, macroeconomic distortions, physical insecurity, corruption, violations of labor rights, and a volatile regulatory framework make Venezuela an extremely challenging climate for U.S. and multinational companies. A complex foreign exchange system, capital controls, and the lack of dollars, coupled with increasing sanctions from the United States and other countries, have prevented firms from repatriating their earnings out of Venezuela and importing industrial inputs and finished goods into Venezuela. Lack of access to dollars, price controls, and rigid labor regulations have compelled many U.S. and multinational firms to reduce or shut down their Venezuelan operations.

“Since 2017, the United States has made over 300 Venezuelan-related designations, pursuant to various Executive Orders (E.O.), including under the International Emergency Economic Powers Act, and the Foreign Narcotics Kingpin Designation Act. Designations include former President

“Maduro and those involved in public corruption and undermining democracy under E.O. 13692 (Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela) issued by the President in March 2015 and E.O. 13850 (Blocking Property of Additional Persons Contributing to the Situation in Venezuela) issued by the President in November 2018, each as amended. Since 2017, the Department of Treasury has designated two individuals for involvement in narcotrafficking under the Kingpin Act, including former Vice President (and nominal Minister of Oil) Tareck El Aissami.

“Additionally, E.O. 13850, in conjunction with determinations made by the Secretary of the Treasury, authorizes sanctions against persons determined to be operating in the gold, oil, financial, and defense and security sectors of the Venezuelan economy and was the basis for the January 2019 designation of Venezuelan national oil company Petreoleos de Venezuela, S.A. (PdVSA). The Central Bank of Venezuela is also designated under E.O. 13850.

“On August 5, 2019, the President signed E.O. 13884 which blocks all property and interests in property of the Government of Venezuela that are in the United States or that are within the possession or control of any United States person. In conjunction with E.O. 13884, Treasury also issued or , including those that authorize, among other things, transactions with Guaido and the National Assembly, activities for the official business of certain international organizations, and activities NGOs undertake to support humanitarian projects to meet basic human needs in Venezuela.

“For additional information about the Venezuela sanctions program, please visit the Treasury Department’s Office of Foreign Assets Control (OFAC) website.

“On March 26, 2020, the Department of Justice charged former President Maduro and 14 other current and former Venezuelan officials, including his vice president for the economy, his Minister of Defense, and the Chief Supreme Court Justice with offenses related to narco-terrorism, corruption, and drug trafficking, and other criminal charges.

“Venezuela’s Membership in International Organizations

“Venezuela and the United States belong to a number of the same international organizations, including the United Nations, Organization of American States, International Atomic Energy Agency, International Civil Aviation Organization, International Monetary Fund, Interpol, World Bank, World Trade Organization and Inter-American Development Bank (IDB).

“Venezuela is a founding member of the Organization of the Petroleum Exporting Countries (OPEC), the Bolivarian Alliance for the Peoples of Our America (ALBA), the Community of Latin American and Caribbean States (CELAC), and PetroCaribe. Venezuela is also a member of the Non-Aligned Movement, , the G-15, the G-24, and the G-77. On August 5, 2017 Venezuela was indefinitely suspended from Southern Common Market (Mercosur).

“With the recognition of Juan Guaido as interim President by 57 countries, Venezuela’s participation or representation in some of these organizations has come under debate.

“On April 26, 2017, Maduro announced Venezuela would withdraw from the Organization of American States (OAS), a process that requires two years. This decision was reversed by Interim President Guaido and the National Assembly. On January 10, 2019, the OAS Permanent Council voted not to recognize the second term of former President Nicolas Maduro and on April 9, 2019 the OAS Permanent Council approved a resolution to accept interim President Guaido’s nominee Gustavo Tarre as Venezuela’s representative to the Permanent Council on April 9.

“The interim Guaido government is also an active member of the Lima Group, an important group of likeminded nations founded in 2017 to facilitate regional coordination in the pursuit of a democratic resolution to the Venezuela crisis.

“On March 15, 2019, the IDB approved a resolution recognizing Guaido’s representative, Ricardo Hausmann. The current representative is Alejandro Plaz.

“Bilateral Representation

“On March 12, 2019, the United States suspended embassy operations in Caracas. The United States maintains formal diplomatic relations with Venezuela and the Guaido interim government through its accredited Ambassador to the United States.

“On August 28, 2019, the Department of State announced the opening of the Venezuela Affairs Unit (VAU). The VAU is the interim diplomatic office of the U.S. Government to Venezuela, located at the U.S. Embassy in Bogota, Colombia. It continues the U.S. mission to the legitimate Government of Venezuela and to the Venezuelan people.”

While the Biden Administration is reviewing its approach to Venezuela and some in the Democratic party have questioned the sanction program in terms of effectiveness, the sanctions remain in place as of March 28, 2021. See, e.g., White House Briefing Room, Background Press Call by Senior Administration Officials on Venezuela, March 08, 2021,https://www.whitehouse.gov/briefing-room/press-briefings/2021/03/08/background-press-call-by-senior-administration-officials-on-venezuela/; PBS News Hour, Democrats pressure Biden to review U.S. sanctions on Venezuela, March 23, 2021, https://www.pbs.org/newshour/politics/democrats-pressure-biden-to-review-u-s-sanctions-on-venezuela.

WTO history of the dispute

Venezuela requested consultations with the United States in late December 2018. See UNITED STATES – MEASURES RELATING TO TRADE IN GOODS AND SERVICES, REQUEST FOR CONSULTATIONS BY VENEZUELA (28 December 2018), WT/DS574/1, G/L/1289, S/L/420, 8 January 2019.

The United States refused the request for consultations. Venezuela requested a panel on 14 March 2019. See UNITED STATES – MEASURES RELATING TO TRADE IN GOODS AND SERVICES REQUEST FOR THE ESTABLISHMENT OF A PANEL BY VENEZUELA, WT/DS574/2, 15 March 2019.

The request was included in the draft agenda for the DSB meeting of March 26, 2019. See Dispute Settlement Body, 26 March 2019, Proposed Agenda, WT/DSB/W/641, 22 March 2019 (agenda item 6, “UNITED STATES – MEASURES RELATING TO TRADE IN GOODS AND SERVICES, A. REQUEST FOR THE ESTABLISHMENT OF A PANEL BY VENEZUELA (WT/DS574/2)”).

The U.S. objected to the inclusion of the Venezuelan request on the agenda. No DSB meeting was held on March 26, 2019. Venezuela agreed to withdraw its request, and the DSB meeting was rescheduled for April 26, 2019. See Dispute Settlement Body, 26 April 2019, Proposed Agenda, WT/DSB/W/643, 24 April 2019.

The minutes of the April 26, 2019 DSB meeting included the following statement ahead of the adoption of the agenda.

“Prior to the adoption of the Agenda, the representative of the Bolivarian Republic of Venezuela said that his delegation wished to make a short statement for the record to the effect that Venezuela was not asking to modify the proposed Agenda of the present meeting to request an inclusion of an item. However, Venezuela wished to reserve its right to do so at any future DSB meeting. Subsequently, Japan said that it wished to include on the proposed Agenda an item under “Other Business” regarding its communication contained in Job/DSB/3. The Agenda was adopted as amended. Following the adoption of the Agenda, the representative of Peru, speaking on behalf of Argentina, Brazil, Canada, Chile, Colombia, Costa Rica, Guatemala, Honduras, Panama and Paraguay said that the members of the Lima Group supported the functioning of the DSB at the present meeting.
However, their Governments wished to indicate that they did not recognize the legitimacy of Nicolás Maduro’s regime nor that of its representatives. The representative of Venezuela said that the DSB was not the appropriate forum to discuss this matter. The representative of the Russian Federation said that her country supported the legitimate government of Nicolás Maduro and underlined that the WTO was not the appropriate international forum vested with the authority to discuss issues raised by the members of the Lima Group.” Dispute Settlement Body, 26 April 2019, MINUTES OF MEETING HELD, WT/DSB/M/428
25 June 2019, page 1.

March 26, 2021 DSB Meeting

Thus, based on the history of U.S. concerns with the Maduro government in Venezuela, it was hardly surprising that the United States would block inclusion of the request for a panel from the agenda this past Friday. Press accounts report that Peru, Brazil and Colombia supported the U.S. position and that the Russian Federation and Cuba supported Venezuela. See, e.g., Reuters, U.S. blocks Venezuela bid to seek WTO review of sanctions, March 26, 2021, https://www.reuters.com/article/us-trade-wto-usa-venezuela/u-s-blocks-venezuela-bid-to-seek-wto-review-of-sanctions-idUSKBN2BI1ZT.

The EU made a statement at the truncated meeting which is copied below. See Permanent Mission of the European Union to the World Trade Organization (WTO), EU Statement at the Regular meeting of the Dispute Settlement Body (DSB), 26 March 2021, https://eeas.europa.eu/delegations/world-trade-organization-wto/95717/eu-statement-regular-meeting-dispute-settlement-body-dsb-26-march-2021_en.

ADOPTION OF THE AGENDA:

“If the EU understands correctly, the US is not ready to accept this panel request by Venezuela as being valid, as it was submitted by a government which the US no longer recognises as the legitimate government representing Venezuela.

“In fact, in this case, the EU would have expected the US to rely on the security exceptions in Article XXI of the GATT and Article XIVbis of the GATS for justifying any departures from basic GATT and GATS provisions that may lie in the measures taken against Venezuela. 

Indeed, we note that the United States measures at issue appear justified by the security exceptions, so the challenge at issue cannot in any event succeed.

“All this being said, the EU has to react for systemic reasons and express its concern at the prospect of the DSB being prevented from holding its meeting on all items of today’s agenda simply because that agenda is not adopted. 

“There is a longstanding and widely recognised principle that DSB agendas cannot be blocked to the extent that they include items governed by negative consensus. This includes first panel requests (governed by consensus), since they are a necessary pre-condition to a second panel request. This principle is of utmost importance because the binding nature of WTO dispute settlement rests on it. 

“That said, the EU expects this meeting to be suspended now, as a result of the US objection to the agenda adoption. This should allow the Chairperson and the WTO Members most involved to consult in search of a solution. The EU hopes that these efforts will rapidly yield a solution, so that this meeting can continue and the DSB discharge the important duties with which it is entrusted.”

Conclusion

Friday’s events at the Dispute Settlement Body meeting were not surprising once the request for a panel had been filed by Venezuela. What is surprising is the Maduro government’s effort to re-raise a matter that had no possibility of being considered in light of the well understood U.S. position (a position agreed to by many WTO Members).

WTO Members have historically shown an inability to evaluate disputes they pursue from the vantage point of whether the result desired is at all politically possible for the Member whose action is being challenged. Yet pursuing disputes that cannot be resolved through the dispute settlement system is a disservice to the WTO and to the proper functioning of the Dispute Settlement Body. The Maduro government dispute with the United States first and foremost is a question of the legitimacy of the Maduro government and its refusal to transfer power to the interim President. No WTO dispute will help resolve the underlying dispute. Besides the question raised by the United States (blocking requests from entities which are not the true representatives of the people), getting rid of the request properly reflects the political realities of the underlying dispute.

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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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.

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.


An early test for the incoming WTO Director-General — helping Members get the Fisheries Subsidies negotiations to a conclusion

Dr. Ngozi Okonjo-Iweala in her statement to the WTO membership during the virtual Special Session of the General Council on February 15 after the Members appointed her the next Director-General made clear that an early deliverable for the WTO was completion of the Fisheries Subsidies negotiations which have been going on since the end of 2001 and were due to have been completed in 2020. See 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/.

The Chair of the Negotiating Group on Rules, Amb. Santiago Wills of Colombia, has held two sets of meetings so far in 2021, one in January and one just last week. See WTO Negotiations on Fisheries Subsidies, WTO members resume work on fisheries subsidies negotiations using latest revised text, 22 January 2021, https://www.wto.org/english/news_e/news21_e/fish_22jan21_e.htm; Inside U.S. Trade’s World Trade Online, Fisheries talks chair: Divides remain, but members have what they need for a deal, February 19, 2021, https://insidetrade.com/daily-news/fisheries-talks-chair-divides-remain-members-have-what-they-need-deal. The press releases following the meetings indicate that there has been little movement in fact in 2021 on the host of major issues that remain for Members to resolve. A review of the second revision of the draft text that was released on December 18, 2020 and the Chair’s explanatory note that accompanied the second draft make clear that Members remain divided on a huge array of issues. See RD/TN/RL/126/Rev.2 and RD/TN/RL/126/Rev.2/Add.1.

For example, there is still no agreement on whether the scope of the agreement will cover fuel subsidies (Article 1.2).

Similarly there is not currently agreement on whether the definition of “fishing related activities” in Article 2(c) include coverage of provisions “of personnel, fuel, gear and other supplies at sea”.

Article 3 which deals with the “prohibition on subsidies to illegal, unreported and unregulated fishing” (IUU) consists of nine sub-articles, many of which remain bracketed whether it revolves around which entity can make a finding of IUU activity, whether leniency will be provided for non-serious violations and which violations will always be addressed, the length of sanctions, the level of transparency and obligations of Members, and whether there are exceptions (special and differential treatment (S&DT)) from the prohibitions on IUU. As is true throughout the revised draft, there are deep divides on the special and differential treatment provisions reflecting the concerns expressed by Members like the U.S. and EU on the overbreadth of Members seeking such treatment and the views of Members like India who view such S&DT as applicable to all who claim developing country status.

Article 4 addresses prohibition on subsidies concerning overfished stocks, there continues to be disagreement, inter alia, on when a fish stock is overfished (two alternatives provided) and on what S&DT will be provided.

Article 5 addresses the prohibition on subsidies concerning overcapacity and overfishing contains. Article 5 contains seven sub-articles, a number of which maintain brackets including on “non-recovery of payments under government-to-government access agreements” (Art. 5.3.2), for subsidies provided to a vessel “not flying the flag of the subsidizing member” (Art. 5.4) on whether there will be a provision for “capping” (Art. 5.5) or a “list of non-harmful subsidies” (Art. 5.6) or for S&DT language (Art. 5.7). Art. 5.3 also deals in part with subsidies for fishing or fishing activities outside of a Member’s territory, obviously a very important and contentious issue.

Article 6 dealing with “specific provisions for LDC Members” has not been discussed and remains in brackets but reflects the proposal put forward by LDC Members.

Article 7 is for technical assistance and capacity building. While bracketed, the proposal has not received significant opposition at this point and appears to be largely non-controversial.

On Articles 8-10 (notification and transparency, institutional arrangements, dispute settlement), discussions are ongoing as to what needs to be notified and ability of Members to request additional information. Articles 9 and 10 depend on whether the fisheries subsidies agreement is treated as a stand-alone Agreement or is treated as an Annex to the Subsidies and Countervailing Measures Agreement. If an Annex, dispute settlement is already provided for; if treated as a stand alone Agreement, then there will need to be an article providing for dispute settlement.

Article 11 covers final provisions and addresses issues such as whether Members will “exercise due restraint” when providing subsidies to fishing or fishing related activities for stocks where the status of the stock (overfished or not) is unknown (Art. 11.2). It also lays out possible exceptions for responding to disasters (and what limits such response shall have)(Art. 11.3) The article also makes clear that the Agreement (or Annex) is not germane to issues of “territoriality or delimitation of maritime jurisdiction” (Art. 11.4).

While the revised draft consolidated text could result in meaningful reform and limitations on harmful subsidies, much of the ongoing debate amongst Members seems to be about how to create exceptions that will permit continued subsidy practices for many Members both within territorial waters and outside of them. The perennial problem within the WTO that reform should be undertaken by others, not by me, is present in the fisheries subsidies negotiations. Can Members demonstrate the ability to come together for the common good? Hard to know as WTO Members have been negotiating for twenty years on fisheries subsidies reform. The Sustainable Development Agenda item 14.6 is designed to help save fishing for all peoples for generations to come. The WTO and the incoming Director-General have an important opportunity to show that global trade can promote sustainability. Let’s hope that a meaningful agreement is yet achievable.

Afterthought

While the revised draft consolidated text provided to Members on December 18, 2020 is clearly a Chairman’s draft, like many drafts in other areas that have routinely be released publicly, the WTO has been slipping into an increased pretense that such texts are “unofficial room documents” and hence not released publicly. While both documents (RD/TN/RL/126/Rev.2 and RD/TN/RL/126/Rev.2/Add. 1) can be found on the internet for those trying to understand the ongoing negotiations, the WTO does not promote transparency and public understanding by pretending that core negotiating documents or draft texts are “unofficial room documents”. Hopefully, the chairs of Committees and leadership within the WTO will correct course and improve transparency in fact and end the misuse of room documents, job documents and other “unofficial” documents which often are the core documents in a negotiation or Committee work.

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.


Forced labor and child labor — a continued major distortion in international trade for some products

In recent years, the United States has paid more attention to the trade distortions flowing from forced labor and child labor in other countries, particularly in China. While there has been significant progress in the last twenty years in reducing forced labor and child labor globally according to the International Labor Organization (“ILO”), the COVID-19 pandemic has seen some retrenchment and efforts by China to address minorities in country have created an international backlash and concern.

The ILO webpage on forced labor reflects the global nature of the problem. The webpage states in part,

“Although forced labour is universally condemned, ILO estimates show that 24.9 million people around the world are still subjected toit. Of the total number of victims of forced labour, 20.8 million (83 per cent) are exploited in the private economy, by individuals or enterprises, and the remaining 4.1 million (17 per cent) are in State-imposed forms of forced labour. Among those exploited by private individuals or enterprises, 8 million (29 per cent) are victims of forced sexual exploitation and 12 million (64 per cent) of forced labour exploitation. Forced labour in the private economy generates some US$ 150 billion in illegal profits every year: two thirds of the estimated total (or US$ 99 billion) comes from commercial sexual exploitation, while another US$ 51 billion is a result from forced economic exploitation in domestic work, agriculture and other economic activities (Note 1).

“Vestiges of slavery are still found in some parts of Africa, while forced labour in the form of coercive recruitment is present in many countries of Latin America, in certain areas of the Caribbean and in other parts of the world. In numerous countries, domestic workers are trapped in situations of forced labour, and in many cases they are restrained from leaving the employers’ home through threats or violence. Bonded labour persists in South Asia, where millions of men, women and children are tied to their work through a vicious circle of debt. In Europe and North America, a considerable number of women and children are victims of traffickers, who sell them to networks of forced prostitution or clandestine sweat-shops. Finally, forced labour is still used as a punishment for expressing political views.

“For many governments around the world, the elimination of forced labour remains an important challenge in the 21st century. Not only is forced labour a serious violation of a fundamental human right, it is a leading cause of poverty and a hindrance to economic development. ILO standards on forced labour, associated with well-targeted technical assistance, are the main tools at the international level to combat this scourge.”

ILO, International Labour Standards on Forced labour, https://www.ilo.org/global/standards/subjects-covered-by-international-labour-standards/forced-labour/lang–en/index.htm. See also ILO and Walk Free, 2017, Global Estimates of Modern Slavery, Forced Labor and Forced Marriage, https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/publication/wcms_575479.pdf.

Child labor involves more people – an estimated 152 million of which 73 million are involved in hazardous work. See ILO, International Programme on the Elimination of Child Labour and Forced Labour (IPEC+), https://www.ilo.org/global/about-the-ilo/how-the-ilo-works/flagships/ipec-plus/lang–en/index.htm.

While the incidence of forced labor and child labor is declining, the COVID-19 pandemic has complicated trends as these populations are most vulnerable. See, e.g., ILO, The International Labour Organization
and the US Department of Labor partnership to eliminate child labour and forced labour, 2019, https://www.ilo.org/wcmsp5/groups/public/@ed_norm/@ipec/documents/publication/wcms_710971.pdf (“The ILO’s most recent global estimates of child labour indicate, however, that significant progress is
being made. From 2000 to 2016, there was a net reduction of 94 million children in child labour and
the number of children in hazardous work was halved. In parallel, the ILO Worst Forms of Child
Labour Convention (No. 182) was ratified by 186 countries, reaching almost universal ratification.
The challenges ahead, however, remain formidable: in 2016, 152 million girls and boys were in child
labour and 25 million men, women and children were trapped in forced labour.”); ILO, COVID-19 impact on
child labour and forced labour: The response of the IPEC+ Flagship Programme, 2020, https://www.ilo.org/wcmsp5/groups/public/—ed_norm/—ipec/documents/publication/wcms_745287.pdf (“COVID-19 has plunged the world into a crisis of unprecedented scope and scale. Undoubtedly, restoring global health remains the first priority, but the strict measures required are resulting in massive economic and social shocks. As lockdown, quarantine, physical distancing and other isolation measures to suppress transmission continue, the global economy has plunged into a recession. The harmful effects of this pandemic will not be distributed equally. They are expected to be most damaging in the poorest countries and in the poorest neighbourhoods, and for those in already disadvantaged or vulnerable situations, such as
children in child labour and victims of forced labour and human trafficking, particularly women and girls.
These vulnerable groups are more affected by income shocks due to the lack of access to social protection,
including health insurance and unemployment benefits. * * * Experience from previous crisis situations, such as the 2014 Ebola epidemic, has shown that these factors play a particularly strong role in exacerbating the risk to child labour and forced labour.”).

In China, the government’s efforts to “reeducate” minority populations (e.g., Uyghurs from the western region of Xinjiang) has led to allegations of forced labor on a range of products and actions by the United States to restrict certain imports from China from the region. The Washington International Trade Association is holding a virtual webinar on January 27 looking at the challenges in China and the forced labor problem of the Xinjiang Uyghur Autonomous Region and the resulting U.S. ban on cotton and tomato products. See WITA, WITA’s Friday Focus on Trade, Vol. 206, January 22, 2021 (containing various articles on the China forced labor issue and referencing the webinar on January 27, WITA Webinar: The U.S. Moves Against Forced Labor in Xinjiang).

The U.S. Department of Labor in September released its 2020 list of products believed to be produced in foreign countries with forced labor or with child labor. See USDOL, 2020 List of Goods Produced by Child Labor or Forced Labor, September 2020, https://www.dol.gov/sites/dolgov/files/ILAB/child_labor_reports/tda2019/2020_TVPRA_List_Online_Final.pdf. The report provides the following statement of purpose:

“The U.S. Department of Labor (USDOL or the Department) has produced this ninth edition of the List of Goods Produced by Child Labor or Forced Labor in accordance with the Trafficking Victims Protection Reauthorization Act (TVPRA), as amended. The TVPRA requires USDOL’s Bureau of International Labor Affairs (ILAB or the Bureau) to “develop and make available to the public a list of goods from countries that
[ILAB] has reason to believe are produced by forced labor or child labor in violation of international standards” (TVPRA List or the List; 22 U.S.C. § 7112(b)(2)(C)). It also requires submission of the TVPRA List to the United States Congress not later than December 1, 2014, and every 2 years thereafter (22 U.S.C. § 7112(b)(3)).

“The Frederick Douglass Trafficking Victims Prevention and Protection Reauthorization Act of 2018 expanded ILAB’s mandate to require the TVPRA List to include, ‘to the extent practicable, goods that are produced with inputs that are produced with forced labor or child labor’” (22 U.S.C. 7112(b)(2)(C)).

“The TVPRA directs ILAB ‘to work with persons who are involved in the production of goods on the list … to create a standard set of practices that will reduce the likelihood that such persons will produce goods using [child labor or forced labor],’ and ‘to consult with other departments and agencies of the United States Government to reduce forced and child labor internationally and ensure that products made by forced labor and child labor in violation of international standards are not imported into the United States’ (22 U.S.C. § 7112(b)(2)(D)–(E)).” (pages 1 and 3).

This year’s publication lists 77 countries that have one or more products believed to be produced with child labor, with forced labor or with both child and forced labor. Fourteen countries are listed as having products believed to be produced with forced labor. Thirty-six countries are listed as believed to produce products with child and forced labor. Sixty-four countries produce some products with child labor. The 77 countries are listed below along with whether products are believed produced with child labor, forced labor, or child labor & forced labor.

Afghanistan — child larbor; child labor & forced labor

Angola — child labor & forced labor

Argentina — child labor; child labor & forced labor

Azerbaijan — child labor

Bangladesh – child labor; child labor & forced labor

Belize — child labor

Benin — child labor; child labor & forced labor

Bolivia — child labor; forced labor; child labor & forced labor

Brazil — child labor; forced labor; child labor & forced labor

Burkina Faso — child labor; child labor & forced labor

Burma — child labor; forced labor; child labor & forced labor

Cambodia — child labor; child labor & forced labor

Cameroon — child labor

Central African Republic — child labor

Chad — child labor

China — forced labor; child labor & forced labor

Colombia — child labor; child labor & forced labor

Costa Rica — child labor

Cote d’Ivoire — child labor & forced labor

Democratic Republic of the Congo — child labor; child labor & forced labor

Dominican Republic — child labor; child labor & forced labor

Ecuador — child labor

Egypt — child labor

El Salvador — child labor

Eswatini — child labor

Ethiopia — child labor; child labor & forced labor

Ghana — child labor; child labor & forced labor

Guatemala — child labor

Guinea — child labor

Honduras — child labor

India — child labor; child labor & forced labor

Indonesia — child labor; child labor & forced labor

Iran — child labor

Kazakhstan — child labor & forced labor

Kenya — child labor

Kyrgyz Republic — child labor

Lebanon — child labor

Lesotho — child labor

Liberia — child labor

Madagascar — child labor

Malawi — child labor; child labor & forced labor

Malaysia — forced labor; child labor & forced labor

Mali — child labor; child labor & forced labor

Mauritania — child labor

Mexico — child labor; child labor & forced labor

Mongolia — child labor

Mozambique — child labor

Nepal — child labor & forced labor

Nicaragua — child labor

Niger — child labor; forced labor

Nigeria — child labor; child labor & forced labor

North Korea — forced labor

Pakistan — child labor; forced labor; child labor & forced labor

Panama — child labor

Paraguay — child labor; child labor & forced labor

Peru — child labor; forced labor; child labor & forced labor

Philippines — child labor

Russia — forced labor; child labor & forced labor

Rwanda — child labor

Senegal — child labor

Sierra Leone –child labor; child labor & forced labor

South Sudan — child labor & forced labor

Sudan — child labor

Suriname — child labor

Taiwan — forced labor

Tajikistan — child labor & forced labor

Tanzania — child labor

Thailand — child labor; forced labor; child labor & forced labor

Turkey — child labor

Turkmenistan — child labor & forced labor

Uganda — child labor

Ukraine — child labor

Uzbekistan — forced labor

Venezuela — forced labor

Vietnam — child labor; child labor & forced labor

Yemen — child labor

Zambia — child labor

Zimbabwe — child labor

While the number of products obviously vary by country and category, the report categorized agriculture as having 68 child labor listings and 29 forced labor listings. This compares to manufacturing with 39 child labor and 20 forced labor listings; mining showed 32 child labor and 13 forced labor listings and pornography showed one each.

Looking at specific products for individual countries provides the most information.

As an example, China is shown as having the following products believed to be produced with forced labor — Artificial Flowers, Christmas Decorations, Coal, Fish, Footwear, Garments, Gloves, Hair Products, Nails, Thread/Yarn, and Tomato Products. China is also shown as having the following products believed to be produced with child labor and forced labor — Bricks, Cotton, Electronics, Fireworks, Textiles, and Toys. As a USDOL separate post notes, gloves, hair products, textiles, thread/yarn and tomato products were added in 2020 because of research on the forced labor situation in Xinjiang. See USDOL, Bureau of International Labor Affairs, Against Their Will: The Situation in Xinjiang, Forced Labor in Xinjiang, 2020, https://www.dol.gov/agencies/ilab/against-their-will-the-situation-in-xinjiang. The document is embedded below.

Against-Their-Will_-The-Situation-in-Xinjiang-_-U.S.-Department-of-Labor

Looking at India, products believed to be produced with child labor include the following — Bidis (hand-rolled
cigarettes), Brassware, Cotton, Fireworks, Footwear, Gems, Glass Bangles, Incense (agarbatti), Leather Goods/
Accessories, Locks, Matches, Mica, Silk Fabric, Silk Thread, Soccer Balls, Sugarcane, Thread/Yarn. Products believed produced with child labor & forced labor include the following — Bricks, Carpets, Cottonseed (hybrid), Embellished Textiles, Garments, Rice, Sandstone, Stones.

While the USDOL reports don’t estimate the portion of exports from any country of individual products that are produced with child and/or forced labor, the trade consequences can be significant as such labor is artificially valued creating distortions in competitiveness and resulting trade flows. For example, the list of products for China are either important export products for China or important inputs into exported products. The same would true for India and for many other of the 77 countries on the list.

Conclusion

The U.S. has in place statutory provisions which permit the exclusion from entry into the United states of products produced with forced labor. The Trump Administration did a somewhat better job enforcing U.S. law on imports of products produced with child or forced labor. Much more can be done and should be done domestically.

Similarly, the ILO is working to eliminate forced labor and child labor consistent with UN Sustainable Development Goals. “The objective of the IPEC+ Global Flagship Programme – in line with Target 8.7 of the 2030 Sustainable Development Agenda, adopted by the United Nations in 2015 – is to provide ILO leadership in global efforts to eradicate all forms of child labour by 2025 and all forms of contemporary slavery and human trafficking by 2030. It also aims to ensure that all people are protected from – and can protect themselves against – these gross human rights violations.” ILO, IPEC+ Global Flagship Programme Implementation, Towards a world free from child labour and forced labour, page 4, 2020, https://respect.international/wp-content/uploads/2020/01/wcms_633435.pdf.

The WTO could play a role in the fight against forced labor and child labor. Such labor practices distort global trade flows in addition to the challenges created for countries engaged in such practices in terms of poverty and human rights abuses. The WTO could gather information from Members on the volume of production and exports of products produced with child and forced labor both as finished products and as inputs into other products. Such an exercise would facilitate an understanding of the extent of global trade represented by such products and help focus attention on trade actions that could be taken to help Members eliminate such harmful practices. While it is unlikely that Members will agree to such a data gathering undertaking, one is surely needed and would add transparency to a source of an important global issue with trade as well as non-trade dimensions.

The fisheries subsidies negotiations — U.S. comments from December 2 meeting add clarity to the inability to achieve an agreement and the lack of “like-mindedness” among Members

Yesterday’s post reviewed the fact that the Chair of the Rules Negotiations had at the December 14 Trade Negotiating Committee and Heads of Delegations meeting indicated that WTO Members would not meet the deadline for finalizing a fisheries subsidies negotiation — the end of 2020. See December 15, 2020, The fisheries subsidies negotiations – failure by WTO Members to deliver an agreement by the end of 2020, https://currentthoughtsontrade.com/2020/12/15/the-fisheries-subsidies-negotiations-failure-by-wto-members-to-deliver-an-agreement-by-the-end-of-2020/.

The TNC and HOD meeting occurred twelve days after the conclusion of the latest round of negotiations on fisheries subsidies on December 2. The WTO press release on those talks described the issues being discussed by Members and the Chair’s intended path forward. See WTO, NEGOTIATIONS ON FISHERIES SUBSIDIES 2 DECEMBER 2020, WTO members conclude cluster of fisheries subsidies meetings, https://www.wto.org/english/news_e/news20_e/fish_02dec20_e.htm.

“On 2 December, at the conclusion of two days of meetings at the level of heads of delegation, the chair of the Negotiating Group on Rules, Ambassador Santiago Wills of Colombia, said he will continue his consultations with WTO members on the next steps in the negotiations.

“During the meetings, delegations responded to questions posed by the chair about determinations of illegal, unreported or unregulated (IUU) fishing; sustainability considerations in the prohibition of subsidies contributing to overcapacity and overfishing; and special and differential treatment for developing and least-developed countries.

“Prior to this meeting, members have been involved in almost continuous “intersessional” discussions after the last cluster of meetings on 2-6 November to discuss many of the key parts of the revised text that the chair introduced on 2 November, including dispute settlement; subsidy disciplines in the areas of IUU fishing, overfished stocks, and overfishing and overcapacity; and special and differential treatment. The ‘Friend of the Chair’, Ambassador Didier Chambovey of Switzerland, also continued his consultations on special and differential treatment and reported back to members.

“The chair noted that much progress has been made this year in spite of the challenges brought on by the COVID-19 crisis, with members conducting intensive negotiations on the basis of a single consolidated draft document, issued in June and now in its second version. The chair said he will continue consultations in the coming days, ahead of the meeting of the General Council on 16-17 December, on how members would like to move negotiations forward.”

U.S. Ambassador Dennis Shea provided comments during the December 2nd session. His comments reflect the substantial distance that remains in reaching agreement. See WTO Fisheries Subsidies Negotiations – HoDs-Level meeting on Article on Overcapacity and Overfishing and Special & Differential Treatment, Statement of U.S. Ambassador Dennis Shea (excerpts), December 2, 2020, https://geneva.usmission.gov/2020/12/03/us-statement-by-ambassador-dennis-shea-wto-fisheries-subsidies-negotiations/. His comments provide insight into just how far away from an agreement Members are, reflecting the lack of “like-mindedness” and the challenge of whether special and differential treatment should be limited to actual need and temporary or is a “right” for any Member declaring themselves a developing country. After nineteen years of negotiations, it is numbing to see how fundamental issues are not agreed to. Below are the excerpts of Ambassador Shea’s comments available from the U.S. Mission in Geneva’s website.

“We have listened carefully to the interventions today, some of which are not encouraging. We continue to see wide divergences in position – including with some Members categorically rejecting objective sustainability criteria in our discipline despite our clear sustainability mandate. This speaks volumes to the need for a capping approach as the solution. In other words, with some unwilling to eliminate obviously harmful subsidies, let’s look at reducing the numbers.


“Capping would provide the flexibility that Members continue to call for, as needed to allow Members to sustainably develop their fisheries sectors, while limiting and reducing the provision of harmful fisheries subsidies. We urge you, Chair, to give appropriate time to discussion of the capping approach, including filling in the placeholder currently in the revised consolidated text.

“Turning to your questions for this session, we do believe that you have asked the right question, which was whether there are any Members here who categorically assert the right to subsidize unsustainable fishing. Based on what we heard this morning, it remains unclear. It might be a question of language, or burden of proof. If we have misunderstood, and at least some Members are not opposed to considering sustainability, what is the sustainability test to which those Members are willing to submit?

“At the same time, it seems other Members wish to give themselves wide berth to avoid any sustainability accountability. If this is the case, then your text should clearly show two options for future high-level decision-making on the approach that will garner consensus.

“With respect to the drafting of the general prohibition on subsidies to fishing that contribute to overcapacity and overfishing, we agree with what was expressed by others, in terms of bringing the sustainability test back as an objective threshold for what is meant when we refer to ‘contributing to overcapacity and overfishing.’ We believe this prior approach, which included reference to the rate of fishing and fishing capacity, is an important standard to clearly include as a threshold issue in the text of the general prohibition. We also agree with others that the inclusion of sustainability language presents a good faith effort to strike a balance and give Members policy space.

“As to the list of subsidies in this article, this must be an open, illustrative list, as others have noted. A closed list lends itself to calls for exceptions and exclusions, which will take us even further away from making progress on this discipline.

“Regarding any special and differential treatment when it comes to this overcapacity and overfishing area, Chair, you have again asked the right questions. Members have indicated a need for appropriate and effective SDT. Members have indicated their desire to grow their fisheries in a sustainable manner. We ask those Members what measures do they have, or would they put in place, to ensure that current or future subsidization would be done in a sustainable manner? A close consideration of this issue might help to unlock roadblocks throughout this text.

“Unfortunately what this conversation today has also illustrated, is that we are nowhere near knowing even some basic parameters of what ‘appropriate and effective SDT’ would look like in a negotiation that is predicated on sustainability.

“The number of hours this group has now spent on discussing SDT carve-outs, exceptions and flexibilities has been unparalleled. We doubt that doing this before we even know the disciplines, is a good use of time.
And in the context of focusing only on the most harmful of subsidies for our discipline, we question the need for any SDT. But as we have noted in the past, we are willing to consider it on a needs-based, transition-period approach, for the overfishing and overcapacity area only.

“And one other point I would like to make while I have the floor: I hear Members refer to SDT as a right, an entitlement. Or that we need to account for past subsidies in a future discipline and therefore focus solely on the ‘polluter pays’ concept. How do these assertions hold water when we are talking about the sustainability of a finite, shared natural resource? How can we all secure the livelihoods of our fishing communities, or the resources so greatly needed for food security, if harmful fisheries subsidies are provided which in turn leads to resource collapse and in essence, food insecurity? This is not only counter-intuitive, but runs against the experience of the last fifty years– and certainly nothing we should be supporting through WTO rules.

“Again, we would ask the question of how wholesale carve-outs are in-line with our mandate? Furthermore, to those who are seeking SDT to grow their capacity, we ask those Members to also explain how that is in line with the mandate, particularly if these same Members are resisting any kind of sustainability threshold for such growth? Instead of destroying any possibility of a coherent agreement, why can’t we consider a more tailored approach to addressing policy space of small producers, such as that set out in our cap proposal?”

Comment

The fisheries subsidies negotiations have from the beginning been limited to wild caught fish, thus excluding aquaculture. Also excluded are fish caught in inland lakes and rivers. There has been huge growth in developing countries of aquaculture over the last 20 years much developed for international trade. Countries with lots of small fishing operations have had concerns about protecting such small scale operators who largely fish relatively close to shore. The needs of these fishing populations has been a topic during the negotiations. But the fundamental challenge is stopping the creation of excess capacity and resulting overfishing happening in the oceans and seas of the world.

The challenge for sustainability of wild caught fish was laid out in the WTO Factsheet on the fisheries subsidies negotiations. WTO, Factsheet: Negotiations on fisheries subsidies, https://www.wto.org/english/tratop_e/rulesneg_e/fish_e/fish_intro_e.htm.

Fish stocks and subsidies

“According to the latest data from the UN Food and Agriculture Organization, fish stocks are at risk of collapsing in many parts of the world due to overexploitation. It is estimated that 34% of global stocks
are overfished compared with 10% in 1974, meaning they are being exploited at a pace where the fish population cannot replenish itself. Declining fish stocks threaten to worsen poverty and endanger coastal
communities that rely on fishing. Roughly 39 million people depend on capture fisheries for their livelihood. Healthy seas are also important for food security, with fish providing 20% of animal protein needs on
average for 3.3 billion people.

“In theory, fishing should be held in check by its very environment: low fish stocks should mean fishing takes more time and costs more money. The problem, however, is that very often state funding keeps unprofitable fishing fleets at sea. Global fisheries subsidies are estimated to range from USD 14 billion to USD 54 billion per year.”

The problem of overfishing is a global problem, and it has been getting worse over time. Addressing the serious problem of overfishing has been one of the goals articulated by nations as part of the UN’s Sustainable Development Goals. The UN Food and Agriculture Organization monitors the challenges faces the world from overfishing. A report in June from the FAO noted that the problem of overfishing is particularly acute in developing countries which don’t have good management systems in place to prevent/reduce overfishing. See, e.g., Reuters, June 8, 2020, Overfishing on the rise as global consumption climbs: U.N. agency, https://www.reuters.com/article/us-food-fao-fish/overfishing-on-the-rise-as-global-consumption-climbs-u-n-agency-idUSKBN23F1CD (“The FAO said in a biennial report that tackling the issue would require several
measures including stronger political will and improved monitoring as fish stocks in areas with less-developed management were in poor shape. ‘While developed countries are improving the way they manage their fisheries, developing countries face a worsening situation,’ the FAO said.); Food and Agriculture Organization of the United Nations, 2020, The State of World Fisheries ad Aquaculture, Sustainability in Action, http://www.fao.org/3/ca9229en/CA9229EN.pdf (“The 2020 edition of The State of World Fisheries
and Aquaculture continues to demonstrate the significant and growing role of fisheries and aquaculture in providing food, nutrition and employment. It also shows the major challenges ahead despite the progress made on a number of fronts. For example, there is growing evidence that when fisheries are properly managed, stocks are consistently above target levels or rebuilding, giving credibility to the fishery managers and governments around the world that are willing to take strong action. However, the report also
demonstrates that the successes achieved in some countries and regions have not been sufficient to reverse the global trend of overfished stocks, indicating that in places where fisheries management is not in place, or is ineffective, the status of fish stocks is poor and deteriorating. This unequal progress highlights the urgent need to replicate and re-adapt successful policies and measures in the light of the realities and needs of
specific fisheries. It calls for new mechanisms to support the effective implementation of policy and management regulations for sustainable fisheries and ecosystems, as the only solution to ensure fisheries around the world are sustainable.” (page vi))

Subsidies to fishing fleets and other parts of the fisheries system are major contributors to overcapacity in the fishing fleets of the world and to overfishing around the world. The WTO’s role in the SDG 14.6 is to get multilateral rules that will reduce the excess capacity and permit sustainable fishing practices. Sustainable development in the handling of the oceans will mean greater long-term opportunities for people engaged in fishing for generations to come and ensure a stable supply of protein from the seas.

The inability of WTO Members to reach a meaningful agreement on fisheries subsidies after nineteen years of effort is a sharp reminder that the WTO’s relevance has substantially eroded because of an inability of the Membership to achieve agreement on even self-evident areas of critical importance to global commerce. While many Members are pursuing advancement on other issues (e.g., digital trade/e-commerce) through plurilateral negotiations, some topics — including fisheries subsidies — require multilateral agreements to effectively address the underlying problem. Will 2021 be the charm for finalizing a fisheries subsidies agreement? Hopefully. But the continued wide divergence in views on the needs of Members in the negotiations reflect not a lack of trust but rather, as Amb. Shea stated on December 14, a lack of like-mindedness amongst Members on the purpose and objectives.

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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.

Revision to draft fisheries subsidies text presented by Chair of the Negotiating Group on Rules at November 2 informal open-ended meeting

In late June, the Chair of the Negotiating Group on Rules presented to the negotiating group a draft consolidated text in a room document, that was not made publicly available. RD/TN/RL/126. In two posts in June, I reviewed developments and the elements of the draft consolidated text based on its publication by Washington Trade Daily on June 26. See June 29, 2020, Update on fisheries subsidies draft consolidated text from June 25, https://currentthoughtsontrade.com/2020/06/29/update-on-fisheries-subsidies-draft-consolidated-text-from-june-25/; June 27, 2020, Chair of Rules Negotiating Group releases draft consolidated fisheries subsidies text at informal meeting on June 25, https://currentthoughtsontrade.com/2020/06/27/chair-of-rules-negotiating-group-releases-draft-consolidated-fisheries-subsidies-text-at-informal-meeting-on-june-25/

The latest round of informal open-ended meetings of the Negotiating Group on Rules (Fisheries Subsidies) occurred this week on November 2-4. On the first day, November 2, the Chair of the Negotiating Group speaking to heads of delegation, presented a revised draft consolidated text. RD/TN/RL/126/Rev. 1. This document has similarly not been released to the public, but was posted in the November 3, 2020 issue of Washington Trade Daily. Reference in this post to the contents of either version of the draft text or the presentation of text itself is based on my review of the documents as printed in the Washington Trade Daily issues noted.

The WTO Secretariat released a press release on November 2 entitled “Fisheries subsidies negotiations chair introduces revised draft consolidated text”. Within the body of the press release was a link to “Excerpts from the peaking notes of the Chair of the Negotiating Group on Rules, Ambassador Santiago Wills”. Both documents are embedded below.

WTO-_-2020-News-items-Fisheries-subsidies-negotiations-chair-introduces-revised-draft-consolidated-text

WTO-_-Excerpts-from-the-speaking-notes-of-the-Chair-of-the-Negotiating-Group-on-Rules-Ambassador-Santiago-Wills

The June draft consolidated text contained ten articles. The first revision released on November 2nd contained eleven (adding Article 11, Final Provisions” and modifying the title of Article 8 to delete “and/or surveillance” leaving “Notification and transparency”).

The articles in the revised draft consolidated text are:

  1. Scope;
  2. Definitions;
  3. Prohibition on subsidies to illegal, unreported and unregulated fishing (“IUU fishing”);
  4. Prohibition on subsidies concerning overfished stocks;
  5. Prohibition on subsidies concerning overcapacity and overfishing;
  6. Specific provisions for LDC members;
  7. Technical assistance and capacity building;
  8. Notification and transparency;
  9. Institutional arrangements;
  10. Dispute settlement;
  11. Final provisions.

The negotiations have always been limited to marine wild capture fishing and don’t cover aquaculture or inland waters. Article 1 is consistent with the intended reach of any agreement. There has been no change to the text of Article 1. Footnote 1 has been modified from “For greater certainty, this excludes aquaculture and inland fisheries” to read “For greater certainty, aquaculture and inland fisheries are excluded from the scope of this [Instrument].”

Article 2, definitions, has been expanded from just three — “fishing”, “fishing related activities” and “vessel” to five in the revised draft by adding a definition for “fish” [“means all species of living marine resources, whether processed or not”] and for “operator” [“means the owner of the vessel, or any person on board, who is in charge of or directs or controls the vessel”]. “Operator” had previously been defined as part of footnote 2 to Art. 3.1

Prohibiting subsidies on IUU fishing is a critical part of the UN sustainable development goal 14.6. Article 3 lays out the prohibition and how the actions of a fishing vessel are determined to be “illegal, unreported or unregulated”. Various Members (coastal, flag State, port State, subsidizing) or regional fisheries management organizations or arrangements (Art. 3.2) can make such findings where the result is “based on positive evidence and follows due process” (Art. 3.3(b)). Most provisions in Article 3 remain unchanged. However, Art. 3.3 is broken into parts in the revised draft. Revised Art. 3.4 deletes the second sentence from the June draft (“The subsidizing Member may refrain from implementing the prohibition under paragraph 3.1 in case of a minor infraction.”), Articles 3.5 and 3.6 from the June draft are Articles 3.6 ad 3.5 in the revised draft. Article 3.3 from the June draft is reproduced below followed by the revised draft:

Art. 3.3 from RD/TN/RL/126 (June 25, 2020)

“3.3 A determination[6] under paragraph 3.2 refers to the final finding by a Member that a vessel [or operator] engaged in IUU fishing, or the final listing of a vessel [or operator] by an RFMO/A as a vessel [or operator] engaged in IUU fishing. [Determinations under subparagraphs 3.2[(a), 3.2(c), and 3.2(e)] shall be based on positive evidence; follow fair, transparent, and non-discriminatory procedures,] including prompt notification to the flag State [or subsidizing Member], if known, through appropriate channels, of the initiation of investigation, [and an opportunity to the flag State or subsidizing Member to provide information to be taken into account in the determination]; [and be in accordance with relevant international law.]”

Art. 3.3 from RD/TN/RL/126/Rev. 1 (November 2, 2020)

“3.3 (a) A determination[6] under paragraph 3.2 refers to the final finding by a Member and/or the final listing by an RFMO/A that a vessel [or operator] has engaged in IUU fishing.
“(b) [The prohibition under paragraph 3.1 shall apply where the determination under subparagraphs 3.2[(a), 3.2(c), and 3.2(e)] is based on positive evidence and follows due process, [in accordance with relevant international law]].
“(c) [If the flag State [or subsidizing Member] is known, a Member shall promptly notify the flag State [or subsidizing Member] of the initiation of an IUU investigation [, and provide an opportunity to the flag State [or subsidizing Member] to provide information to be taken into account in the
determination.]]”

Footnotes to Article 3 are basically unchanged in the revised draft text.

Articles 4 and 5 address the other core objective of UN Sustainable Development Goal 14.6, prohibiting subsidies on overfished stocks, overcapacity and overfishing. Both articles contain exceptions or special and differential treatment for developing and least developed countries (LDCs). Depending on whether advanced developing countries waive such provisions, there will be problems for some Members (including the U.S.) in having such exceptions or S&D provisions included in the text. Specifically, LDCs are exempted from the prohibitions of Art. 5.1 “for fishing or fishing related activities” (revised Art. 5.7(a)) and developing countries “for fishing or fishing related activities at sea within their territorial sea” (revised Art. 5.7(b)). The draft consolidated text attempts to cover some developing and LDC countries despite the above two exceptions where certain criteria are met (revised Art. 5.7(c)). It is assumed that Korea, Singapore and Brazil consistent with their prior statements that they would forego special and differential treatment in future agreements would not be eligible for the exceptions or S&D contained in the draft agreement if the final agreement contains such provisions.

There are no changes for Article 4 between the June draft and the revised draft released on November 2. For Article 5, Article 5.1.1, 5.1.2 and 5.1.3 of the June draft text are now in 5.1.1 and 5.2. Other than renumbering (e.g., old Art. 5.2 is revised Art. 5.3, etc.), the rest of Article 5 is substantively unchanged. The June Art. 5.1.1.-5.1.3 and the November revised 5.1.1 and 5.2 are copied below.

Art. 5.1.1, 5.1.2, and 5.1.3 from RD/TN/RL/126 (June 25, 2020)

“5.1.1 A subsidy contributes to overcapacity or overfishing if it reduces capital costs or operating costs of fishing or fishing related activities at sea regarding a stock that is being fished at a rate of fishing or with a measure of fishing capacity that is greater than would allow the stock to be maintained at a sustainable level.[11]

“5.1.2 For the purposes of this Article:
“(a) capital costs include costs of construction, acquisition, modernization, renovation or upgrading of vessels, purchase of machines and equipment for fishing vessels (including fishing gear and engine, fish-processing machinery, fish-finding technology, refrigerators, or machine for sorting or
cleaning fish); and
“(b) operating costs include costs of fuel, ice, bait, personnel, social charges, insurance, and gear; subsidies that reduce operating costs include, inter alia, income support of vessels or operators or the workers they employ, payments based on the price of fish caught, subsidies for at-sea support, and subsidies to cover operating losses of vessels or fishing or fishing related activities.

“5.1.3 Notwithstanding paragraph 5.1, a Member may grant or maintain the subsidies set out in paragraph 5.1 if the subsidizing Member can demonstrate that it has other policies in place that [effectively ensure] the stock or stocks in the relevant fishery or fisheries are maintained at a sustainable level.”

Art. 5.1.1 and 5.2 from RD/TN/RL/126/Rev. 1 (November 2, 2020)

“5.1.1 For the purpose of paragraph 5.1, subsidies that contribute to overcapacity or overfishing [include]:
“(a) subsidies to construction, acquisition, modernisation, renovation or upgrading of vessels;
“(b) subsidies to the purchase of machines and equipment for vessels (including fishing gear and engine, fish-processing machinery, fish-finding technology, refrigerators, or machinery for sorting or cleaning fish);
“(c) subsidies to the purchase/costs of fuel, ice, or bait;
“(d) subsidies to costs of personnel, social charges, or insurance;
“(e) income support of vessels or operators or the workers they employ;
“(f) price support of fish caught;
“(g) subsidies to at-sea support; and
“(h) subsidies covering operating losses of vessels or fishing or fishing related activities.

“5.2 Notwithstanding paragraph 5.1, a Member may grant or maintain subsidies referred to in paragraph 5.1 if it demonstrates that measures are implemented to maintain the stock or stocks in the relevant fishery or fisheries at a biologically sustainable level.[11]”

Article 6 has two subparts, one giving LDCs a transition period once a country is no longer an LDC and the other having Members “exercise due restraint in raising matters involving an LDC Member”. There are no changes in the revised draft from the June draft.

Article 7 calls on developed country Members and such developing country Members who indicate being in a position to do so to “provide targeted technical assistance and capacity building assistance” to developing countries and LDCs. There are no changes to the revised draft from the June original draft text.

As noted in my June posts, Articles 8-10 had not been fleshed out in the June draft consolidated text. The November 2 revised draft consolidated text has elements of each of these Articles as well as some material on the new Article 11, Final Provisions. The text is copied below.

“ARTICLE 8: NOTIFICATION AND TRANSPARENCY

“8.1 In order to strengthen and enhance notifications of fisheries subsidies, and to enable more effective surveillance of the implementation of fisheries subsidies commitments, each Member shall [, to the extent possible,] provide the following information as part of its regular notification of fisheries subsidies under Article 25 of the SCM Agreement[15]:
“(a) [PLACEHOLDER – LIST OF SPECIFIC INFORMATION TO BE NOTIFIED]

“8.2 Each Member shall notify [the relevant SCM body/the Committee established under paragraph 9.1] in writing on an annual basis of:
“(a) any list of vessels and operators that it has determined as having been engaged in IUU fishing; and
“(b) where applicable, a list of its fisheries access agreements in force with another government or governmental authority, and such notification shall consist of the titles of the agreements and a list of their parties.

“8.3 A Member may request additional information from the notifying Member regarding the notifications and information provided under paragraphs 1 and 2. The notifying Member shall respond to that request as quickly as possible in writing and in a comprehensive manner. If a Member considers that a notification or information under paragraphs 1 and 2 has not been provided, the Member may bring the matter to the attention of such other Member or to the [Committee].

“ARTICLE 9: [INSTITUTIONAL ARRANGEMENTS]

“[9.1 There is hereby established a [COMMITTEE NAME] composed of representatives from each of the Members. The Committee shall elect its own Chair and shall meet not less than twice a year and otherwise as envisaged by relevant provisions of this [Instrument] at the request of any Member. The Committee shall carry out responsibilities as assigned to it under this [Instrument] or by the Members and it shall afford Members the opportunity of consulting on any matter relating to the operation of this [Instrument] or the furtherance of its objectives. The WTO Secretariat shall act as the secretariat to the Committee.]*

“9.2 Each Member shall, within one year of the date of entry into force of this [Instrument], inform the [Committee] of measures in existence or taken to ensure the implementation and administration of this [Instrument], including the steps taken to implement prohibitions set out in Articles [3, 4 and 5]. Each Member shall also inform the [Committee] of any changes to such measures thereafter. The [Committee] shall review annually the implementation and operation of this [Instrument], taking into account the objectives thereof.

“9.3 Each Member shall, within one year of the date of entry into force of this [Instrument], provide to the [Committee] a description of its fisheries regime with references to its laws, regulations and administrative procedures relevant to this [Instrument], and promptly inform the [Committee] of any modifications thereafter. A Member may meet this obligation by providing to the [Committee] an up-to-date [URL][electronic link] to the Member’s or other appropriate official web page that sets out this information.

“[9.4 The Committee shall examine [frequency] all information provided pursuant to Articles 3 and 8 and this Article.]

“9.5 The [Committee] shall maintain close contact with the relevant international organizations in the field of fisheries management, especially with the Food and Agriculture Organization of the United Nations (FAO) and relevant RFMO/As.

“9.6 Not later than [X] after the date of entry into force of this [Instrument] and periodically thereafter, the [Committee] shall review the operation of this [Instrument] with a view to making all necessary modifications to improve the operation of this [Instrument], taking into account the objectives thereof.

“ARTICLE 10: DISPUTE SETTLEMENT

“[The provisions of Articles XXII and XXIII of GATT 1994 as elaborated and applied by the Dispute Settlement Understanding, and Article 4 of the Agreement on Subsidies and Countervailing Measures shall apply to consultations, the settlement of disputes, and remedies under this [Instrument], except as otherwise specifically provided herein.]

“ARTICLE 11: FINAL PROVISIONS

“11.1 Except as provided in Articles [3 and 4], nothing in this [Instrument] shall prevent a Member from granting a subsidy for [natural] disaster relief, provided that the subsidy is:
“(a) limited to the relief of a particular [natural] disaster;
“(b) limited to the affected geographic area;
“(c) time-limited; and
“(d) in the case of reconstruction subsidies, limited to restoring the affected area, the affected fishery, and/or the affected fleet up to [a sustainable level of fishing and/or fishing capacity as established through a scientific-based assessment of the status of the fishery and in no case beyond] its pre-disaster level.

“11.2 (a) This [Instrument], including any findings, recommendations, and awards with respect to this [Instrument], shall have no legal implications regarding territoriality or delimitation of maritime jurisdiction.
“(b) A panel established pursuant to [Article 10 of this Instrument] shall not entertain any claim that would require it to address any issues of territoriality or delimitation of maritime jurisdiction that is contested by a party or a third party.”

Conclusion

It is obviously useful to have progress being made on a draft text, even if it is simply a draft from the Chair of the Negotiating Group. The Chair’s comments at the start of the meeting which are presented above show that the WTO Members remain far from an agreed deal. There remain some important “placeholders” in the draft text as well. In the end, it will be up to Members to decide if they can get past their differences and achieve an agreement that is meaningful in fact and will help the world move towards sustainable development in the handling of the global fish supplies.

As November approaches, Europe and the United States facing rapidly growing new COVID-19 cases

The number of new cases of COVID-19 reported globally skyrocketed during the October 12-25 period (5,431,119), up 24.37% from the September 28 – October 11 period (4,336,825). Data are from the European Centre for Disease Prevention and Control worldwide update series. Global confirmed cases to date are now 42,758,015.

The United States which has more confirmed cases (8,576,725) than any other nation and more confirmed deaths from COVID-19 (224,899), saw the number of new cases surge by 34.0% over the last two weeks with daily records set twice in the last week (both days over 80,000 new cases). The U.S. recorded the extraordinary number of 908,980 new cases during the fourteen day period July 20-August 2. That number declined to 740,721 during August 3-16 and further declined to 600,417 new cases in the August 17-30 period and was further reduced to 524,526 new cases in the August 31-September 13 period. The downtrend was reversed during September 14-27, when the number of new cases increased to 592,690 or a daily average of 42,335 cases. During September 28-October 11, the United States recorded 640,149 new cases (45,725/day). During October 12-25, the United States recorded 857,778 new cases and will likely surpass the prior two week peak in the next two weeks.

The United States regained the dubious distinction of recording the largest number of new cases in the last two weeks as India’s number of new cases continues to decline to 811,005 new cases from its peak of 1,238,176 new cases during the September 14-27 period. India is the only country to have recorded more than one million cases in a two week period. The United States appears likely to join India in the coming weeks.

Brazil (297,998 new cases) lost its hold on third place to France (367,624 new cases). Brazil’s new cases have been falling since July 20-August 2 (633,017 new cases) to 609,219 new cases during August 3-16, 529,057 new cases during August 17-30, 469,534 new cases during August 31-September 13, 402,304 new cases during September 14-27, 364,646 during September 28-October 11 and 297,998 new cases in October 12-25 (a decline of 52.92% since the end of July).

With the tremendous overall global growth and the declining volume of new cases in India and Brazil, the share of total new cases in the last fourteen days and since the end of December 2019 accounted for by India, Brazil and the United States declined to 36.21% in the most recent fourteen days from 47.31% in September 28-October 11. and from 54.33% during September 14-27 and down from 58.34% in the August 31-September 13 period. The three countries account for 51.04% of total cases since late December 2019 in the prior two weeks down from 53.25% of all cases confirmed since late December 2019 as of October 11.

The United States with 4.3% of global population has accounted for 20.06% of total confirmed cases since December 2019 — 4.67 times the share of total cases our population would justify. With the large increase in the most recent two weeks, the U.S. was 15.79% of the total new cases during the last two weeks (up from 14.66% during Sept. 28-October 11) or 3.67 times the U.S. share of global population. The U.S. also accounts for 19.53% of total deaths or 4.54 times the U.S. share of global population.

Changing pattern of growth in cases, Europe experiencing a spike in cases surpassing its first wave

Much of Europe is in a massive build-up of new cases, rivaling or exceeding the challenges faced during the March-April time period. This is resulting in reimposition of some restrictions by some European countries with a fair amount of pushback from citizens weary of the restrictions.

France has been hit hardest in terms of the number of new cases with the October 12-25 number of new cases reaching 367,624 up 92.04% from the 191,427 new cases in September 28-October 11 which was up from 153,535 in the September 14-27 period. The current number of new cases compares to the prior peak in the March 30-April 12 period of 56,215 new cases (or is 6.54 times the prior peak in the latest two week period).

The United Kingdom is similarly facing major challenges as the last two weeks saw new cases of 263,166 up 62.88% from the 161,567 new cases in September 28-October 11 which was more than twice the 64,103 new cases in September 14-27 and just 32,422 new cases in the August 31-September 13 period. The United Kingdom’s prior peak in the April 13-26 period was 69,386 new cases. So the most recent two weeks is at a level that is 3.79 times the prior peak.

Spain’s number of new COVID-19 cases rose to 185,020, an increase of 27.93% rom the September 28-Ocotber 11 period with 144,631 new cases. Spain’s peak in the spring had been in the period March 30-April 12 with 81,612 new cases. Thus, the last two weeks were 2.27 times the Spring peak number of new cases.

Italy’s last two weeks saw a breathtaking spike to 155,015 new cases, 3.74 times the number of new cases from the prior two week period September 28-October 11 when Italy recorded 41,390 new cases which was nearly double the number of cases in the September 14-27 period (21,807 new cases). Italy’s most recent two weeks was 2.59 times the prior peak for Italy in the Spring during the March 30-April 12 period of 59,799 new cases.

Czechia which spiked following summer vacations saw its number of new cases during October 12-25 surge to 136,790 up from 46,080 new cases in the September 28-October 11 period and 23,893 new cases in the September 14-27 period and 11,307 new cases in the August 31 – September 13 period. Czechia largely escaped the March-April wave in Europe. The data for the last eight weeks constitutes 86.95 percent of Czechia’s total recorded cases since December 2019.

Belgium surged to 133,439 new cases in the October 12-25 period more than tripling the 40,791 new cases recorded in the September 28-October 11 period which more than doubling the numbers from September 14-27 of 17,797.

Poland, which had largely escaped the Spring wave of infections, recorded 120,308 new cases in the latest two week period (Oct. 12-25) up from 35,658 new cases in the September 28-October 11 period.

The Netherlands nearly doubled its number of new cases in the October 12-25 period (112,649) compared to the number of new cases in the September 28-Ocotber 11period (59,561). The last two weeks constitute 40.13% of total cases the Netherlands has recorded since December 2019.

Germany’s new cases in the October 12-25 period surged to 106,317 from 38,724 new cases during the September 28-October 11 period. The Spring peak for Germany had been during the March 30-April 12 period (67,932 new cases).

The Russian Federation saw continued increases in the number of new cases during the October 12-25 period (228,793) up from 141,513 in the September 28-October 11 period which was up 86,209 new cases in the September 14-27 period. Russia’s earlier peak was during the May 11-24 period when Russia recorded 137,206 new cases.

Ukraine recorded 81,144 new cases during the October 11-25 period compared to 60,762 new cases in September 28-October 11, and 43,645 new cases in the September-27 period.

Many other European countries saw large increases as well in the last two weeks, though the number of new cases are smaller those the countries reviewed above.

Developing country hot spots

Still a very large part of the new cases are in developing countries as has been true for the last few months although many countries, including India and Brazil are seeing many fewer new cases in the last two weeks. While India and Brazil had by far the largest number of new cases from developing countries, they were followed by Argentina (197,440), Colombia (104,964), Iran (66,452), Indonesia (57,028), Mexico (55,807), Iraq (49,029), Morocco (48,063), Peru (40,126), the Philippines (30,893), Turkey (25,753), South Africa (23,350), Chile (20,947), Bangladesh (20,434) and then dozens of other countries with smaller numbers of new cases. Of the listed developing countries, only Argentina, Colombia, Iran, Morocco, Turkey and South Africa saw increases from the September 28-October 11 period.

Deaths/100,000 population

The United States has the largest number of deaths of any country to date (224,899) and had the largest number of deaths in the last two weeks (10,522). Because the number of deaths typically follows increases in new cases (with a significant lag), the U.S. saw the number of new deaths increase 6.5% from the prior two weeks deaths (9,880). The countries with the highest number of deaths per 100,000 population for the last two weeks were the following: Argentina (11.24), Armenia (5.54), Moldova (5.22), Israel (5.06), Romania (4.94), Belgium (4.91), Iran (4.86), Colombia (4.65), Costa Rica (4.08), Mexico (4.00), Poland (3.63), Panama (3.44), Chile (3.27), and the United States (3.20). All other countries (including all other developed countries) had lower rates of death per 100,000 population. For all countries, the death rate over the last two weeks was 1.02 deaths/100,000 population. So the U.S.’s death rate over the last two weeks was 2.91 times the global average and was much higher than many large and/or developed countries. China’s number was so low, it was 0.00 people/100,000 population; France was 2.93, Germany 0.50, India 0.75, Italy 1.77, Japan 0.07, South Korea 0.05, Singapore 0.02, United Kingdom 2.98, Taiwan 0.00, Canada 0.90, Australia 0.03, New Zealand 0.00.

If looking at the entire period since the end of December 2019 through October 25, the average number of deaths for all countries per 100,000 of population has been 15.16 deaths. The nine countries (of 86 which account for over 98% of total deaths) with the highest death rates/100,000 for the full period are: Peru (10.87), Belgium (93.73), Bolivia (74.93), Brazil (74.34), Spain (74.04), Ecuador (72.19), Chile (73.30), Ecuador (72.19), Mexico (69.56), the United States (68.34). The United States death rate has been 4.51 times the global rate and many times higher than nearly all other developed countries and most developing countries. Consider the following examples: China, where the virus was first found, has a death per 100,000 population of just 0.33 people. India’s data show 8.67 per 100,000 population; Germany has 12.08; Japan has 1.35; Korea is just 0.89; Canada is 26.52; Switzerland is 21.96; Poland is 11.46; Ukraine is 14.30; Norway is 5.24; Australia is 3.59; New Zealand is 0.52.

Conclusion

The world in the first ten months of 2020 has struggled to get the COVID-19 pandemic under control. While many countries in Europe and some in Asia and the major countries in Oceania had greatly reduced the number of new cases over time, there has been a significant resurgence in many of these countries (particularly in Europe where current rates of new cases are greater than during the March-April initial wave) as their economies reopen, travel restrictions are eased, schools reopen in many countries and fall comes to the northern hemisphere. But the number of new cases continues to rage in a few countries in the Americas, with the United States heading to new records. While there are growing number of cases in many developing countries in Asia and Africa, many countries are seeing significant declines with relatively smaller number of cases in Africa in total than in other continents.

A recent WTO Secretariat information paper showed that there has been a reduction in shortages of many medical goods needed to handle the COVID-19 pandemic which is obviously good news, although as the global total of new cases continues to rise, there may yet be additional challenges in terms of supply. See 18 September 2020, Information Note, How WTO Members Have Used Trade Measures to Expedite Access to COVID-19 Critical Medical Goods and Services, https://www.wto.org/english/tratop_e/covid19_e/services_report_16092020_e.pdf.

Despite significant expansion of production of PPE around the world and despite progress within GAVI on its program for outreach with various vaccines when developed (including securing production capacity in a number of countries), and other relevant medical goods and the ongoing efforts of CEPI on vaccine developments, and the license agreements that have been entered into by a number of the major groups developing vaccines for COVID-19, India and South Africa have filed a waiver request from most TRIPs obligations “in relation to prevention, containment of treatment of COVID-19”. The waiver request would apply to all WTO Members for a number of years (yet to be determined). See Communication from India and South Africa, Waiver from Certain Provisions of the TRIPs Agreement for the Prevention, Containment and Treatment of COVID-19, 2 October 2020, IP/C/W/669. While I will address the waiver request in a later post, it is hard to imagine that the normal requirements for seeking a waiver have been met with the current communication. Based on the readout of the October 20, 2020 TRIPs Council meeting, it is likely that the waiver request will generate significant controversy in the coming three months and could complicate current efforts at greater global cooperation in addressing the pandemic.

With the third round of consultations for a new Director-General concluding on Tuesday, October 27, whoever the new Director-General ends up being can add the waiver request to the list of highly controversial matters that confront the WTO heading towards the end of 2020.

COVID-19 new cases over last 14 days pass 5,000,000 for first time on October 22.

According to data compile by the European Centre for Disease Prevention and Control, total new COVID-19 cases reported globally reached 5,042,415 for the last fourteen days on October 22, 2020 bringing the totals since data started to be gathered at the end of 2019 to 41.299 million cases. See European Centre for Disease Prevention and Control, October 22, 2020, COVID-19 situation update worldwide, as of 22 October 2020, https://www.ecdc.europa.eu/en/geographical-distribution-2019-ncov-cases. This is the first day where the two week total exceeded five million. The most recent two week total compares to 3,780,469 new cases for the two weeks ending on September 13; 3,019,983 new cases for the two weeks ending on July 19; 1,932,024 new cases for the two weeks ending on June 21; and 1,281,916 new cases for the two weeks ending on May 24.

While vaccines are available in China and the Russian Federation to some extent and emergency approval of two vaccines may be presented to the U.S. Food and Drug Administration in the second half of November 2020, countries is the Americas and Europe in particular are seeing sharp increases in the number of new cases as cooler weather and greater time indoors accompanies the start of Fall.

Here are all countries (13) that had 100,000 new cases or more in the last two weeks according to the ECDC report. They account for 3,605,666 of the cases in the last two weeks (71.5%). All but India and Brazil are increasing, most dramatically:

India – 871,291 (down from recent periods)

United States – 786,488 (increasing)

France – 303,912 (increasing)

Brazil – 298,078 (down from recent periods)

United Kingdom – 244,954 (increasing)

Russian Federation – 198,716 (increasing)

Argentina – 196,410 (increasing)

Spain – 169,394 (increasing)

Italy – 115,708 (increasing)

Czechia – 113,555 (increasing)

Colombia – 104,017 (increasing)

Netherlands – 103,024 (increasing)

Belgium – 100,119 (increasing)

Individual countries in Europe are reimposing some restrictions in response to the sharp spike in new cases, including lockdowns in Ireland and Czechia. See Politico, October 21, 2020, EU leaders to discuss Coronavirus on October 29, https://www.politico.eu/article/eu-leaders-to-confer-on-pandemic-oct-29/. The EU has made arrangements with three groups developing vaccines for early supplies and is reported to be close to arrangements with three more (and possibly with a fourth).

Different states in the United States are responding to the rising number of new cases in different ways reflecting in part the politicization of prevention measures like wearing masks and the continued mixed messages coming from government officials on the pandemic. Rural America which had escaped most of the early infections has been going through large surges, particularly in the middle of the country and in the northern states in the midwest. Hospitalizations have increased in many states and will likely continue to climb if predictions of worsening new case counts continue to play out. The U.S. has made arrangements with a number of pharmaceutical companies and groups for early access to vaccines that receive approval for distribution.

In a recent WTO TRIPs Council meeting, the U.S. and U.S. reportedly opposed a proposal from India and South Africa to waive certain intellectual property protections for a period of time to address getting vaccines and therapeutics to all peoples when available. See World Trade Organization press release, October 20, 2020, Members discuss intellectual property response to the COVID-19 pandemic, https://www.wto.org/english/news_e/news20_e/trip_20oct20_e.htm; Inside U.S. Trade’s World Trade Online, October 20, 2020, U.S., EU oppose WTO effort to waive IP protections amid pandemic, https://insidetrade.com/daily-news/us-eu-oppose-wto-effort-waive-ip-protections-amid-pandemic.

As the pandemic continues to rage with a shifting focus on hot spots back to more developed countries and as vaccines get close to approval and mass production, the question of distribution of vaccines and therapeutics to countries in need will become a more pressing issue. While there has been greater international cooperation (with the exception of the U.S.) in supporting groups focuses on getting vaccines to developing and least developed countries, there obviously remains a tension between the role of government in taking care of its citizens and its role in contributing to global outreach. See Nature, 24 September 2020, Who Gets a Covid Vaccine First? Access plans are taking shape, https://media.nature.com/original/magazine-assets/d41586-020-02684-9/d41586-020-02684-9.pdf While the WHO would like to see all countries pool vaccines and make them available to vulnerable groups globally before addressing other national needs, that is a highly unlikely scenario among major producing countries. Particularly for developed countries experiencing large surges in new cases, the political pressure to address the immediate needs at home will likely rule government actions. The good news is that some pharmaceutical companies involved in vaccine development have plans to produce or license production in multiple countries, including in countries for broader distribution to developing and least developed countries. This is in addition to the government and private sector support to GAVI and others for obtaining vaccines and therapeutics and making them available to countries in need.

Conclusion

The spread of the COVID-19 pandemic continues to accelerate and will likely worsen for the Americas and Europe in the coming weeks. If there are increased restrictions by countries in an effort to slow the spread of the coronavirus, that will slow the economic rebound in important parts of the world and will likely slow the rebound in trade in goods and services.

At the same time, the world is getting close to knowing whether a number of the vaccine trials underway by western pharmaceutical companies have been successful and whether vaccines from these companies will join those of China and Russia. As vaccines and some therapeutics become commercially available, there will be the important challenge of seeing that all peoples with needs are able to access the vaccines and therapeutics on an equitable and affordable basis. The jury is out as to how access will actually work and whether the roll out of vaccines and therapeutics will in fact be equitable and affordable.

Third Round of Consultations in Selecting new WTO Director-General – eight days to go, political outreach continues at high level

The last WTO Director-General, Roberto Azevedo, departed at the end of August. The existing four Deputy Directors-General are overseeing WTO operations awaiting the outcome of the selection process for a new Director-General. While eight candidates were put forward by early July and had two months to “become known” to WTO Members, the process of winnowing down the candidates started in September and has gone through two rounds where the candidate pool went from eight to five to two. Which brings the WTO to the third and final round of consultations by the troika of Chairs of the General Council, Dispute Settlement Body and Trade Policy Review Body with the WTO Membership to find the one candidate with the broadest support both geographically but also by type of Member (developed, developing, least developed).

The third round started on October 19 and will continue through October 27. While the process is confidential, with each Member meeting individually with the troika and providing the Member’s preference, Members can, of course, release information on the candidate of their preference if they so choose.

The two candidates who remain in contention are Minister Yoo Myung-hee of the Republic of Korea and Dr. Ngozi Okonjo-Iweala of Nigeria. While all eight of the candidates who were put forward in June and July were well qualified, Minister Yoo and Dr. Okonjo-Iweala have received high marks from WTO Members from the very beginning. While Minister Yoo has the advantage in terms of trade background, Dr. Okonjo-Iweala has an impressive background as a former finance minister, 25 years at the World Bank and her current role as Chair of GAVI.

The procedures for selecting a new Director-General which were agreed to in late 2002 by the General Council put a primary focus on qualifications as one would assume. However, where there are equally well qualified candidates then geographical diversity is specifically identified as a a relevant criteria. There has never been a Director-General from Africa and there has only been one Director-General from Asia (although there was also a Director-General from the Pacific area outside of Asia). With the UN Sustainable Development Goals including one on gender equality (SDG #5), many Members have also been interesting in seeing a Director-General picked from the women candidates. Since both of the two remaining candidates are women, geographical diversity will likely have an outsized role in the third round .

Both remaining candidates are receiving strong support from their home governments in terms of outreach to foreign leaders seeking support for their candidate. The candidates, of course, are also extremely busy with ongoing outreach.

Thus, Minister Yoo traveled back to Europe last week and had a meeting with the EC Trade Commissioner Dombrovskis on October 13, among other meetings. See https://ec.europa.eu/commission/presscorner/detail/en/cldr_20_1935; Yonhap News Agency, Seoul’s top trade official to visit Europe to drum up support her WTO chief race, October 12, 2020, https://en.yna.co.kr/view/AEN20201012003300320?section=business/industry;

Similarly, the Korean President Moon Jae-in, Prime Minister Chung Sye-kyun and the ruling Democratic Party (DP) Chairman Lee Nak-yon are engaged in outreach for Minister Yoo’s candidacy. Korea JoongAng Daily, October 12, 2020, Moon, allies intensify campaign for Yoo Myung-hee to head WTO, https://koreajoongangdaily.joins.com/2020/10/12/national/politics/Yoo-Myunghee-WTO-Moon-Jaein/20201012172600409.html. Contacts have been made with heads of state or senior officials in Malaysia, Germany, Brazil, Colombia, Sri Lanka, Guatemala, Japan and the U.S. among others. See The Korea Times, October 20, 2020, Government goes all out for Yoo’s WTO election Government goes all out for Yoo’s WTO election, https://www.koreatimes.co.kr/www/nation/2020/10/120_297887.html. President Moon has also raised the issue of support with new ambassadors to Korea — including the German, Vietnamese, Austrian, Chilean, Pakistani and Omani ambassadors. Yonhap News Agency, October 16, 2020, Moon requests support for S. Korea’s WTO chief bid in meeting with foreign envoys, https://en.yna.co.kr/view/AEN20201016008600315.

Minister Yoo is reported to be having problems in solidifying support from some major Asian Members — including China and Japan — for reasons at least partially separate from her qualifications and is facing what appears to be block support by African WTO Members for Dr. Okonjo-Iweala. Thus, broad outreach in Asia, the Americas and in Europe will be important for Minister Yoo if she is to be the last candidate standing on October 28-29.

Dr. Okonjo-Iweala is similarly receiving strong support from her government where President Muhammadu Buhari indicated full support by the Nigerian government. See The Tide News Online, Ocotber 14, 2020, Buhari Backs Okonjo-Iweala For WTO Job, http://www.thetidenewsonline.com/2020/10/14/buhari-backs-okonjo-iweala-for-wto-job/. Press accounts report that Dr. Okonjo-Iweala has the full backing of the African Union as well as support in both the Americas and Asia. See RTL Today, October 19, 2020, ‘I feel the wind behind my back’: Nigerian WTO candidate, https://today.rtl.lu/news/business-and-tech/a/1596831.html. Many have felt that Dr. Okonjo-Iweala is the candidate to beat, and she is certainly helped by the support of the African Union WTO Members but will also need broad support in the other regions of the world to be the one remaining candidate.

With just eight days to go to the conclusion of the third round of consultations, the remaining two candidates and their governments are turning over every stone in their effort to generate the support needed to come out of the third round as the sole candidate left.

While the candidate announced on October 29 as the remaining candidate still has to be put forward to the General Council for consensus adoption as the new Director-General, it seems unlikely at the moment that either candidate, should she emerge as the preference of the WTO membership, would be blocked by a Member from becoming the next Director-General. While such blockage is always a possibility, the 2002 agreed procedures have prevented such blockage and hopefully will result in a clean conclusion this year as well.

It is certain to be an interesting end of October.

World COVID-19 pandemic continues to spin out of control — more than 4.3 million new cases in last two weeks

After plateauing in terms of new cases during August, COVID-19 new cases are increasing rapidly for the world as a whole. For the period September 28-October 11, data compiled by the European Centre for Disease Prevention and Control show new cases in the world being 4,366,825 — an increase of 6.24% from the prior two weeks. Thee period September 14-27, dshow new cases i at 4,110,081. That compares to 3,780,469 new cases in the August 31-September 13 period and 3,558,360 for August 17-30, 3,624,548 for August 3-16 and 3,568,162 for the July 20-August 2 period. Total cases since the end of December 2019 are now at 37.268 million.

The United States which has more confirmed cases (7,718,947) than any other nation and more confirmed deaths from COVID-19 (214,377), saw the number of new cases increase over the last two weeks following the change in direction recorded in the prior two weeks after three two week periods where the U.S. saw a decline in new cases. The U.S. recorded the extraordinary number of 908,980 new cases during the fourteen day period July 20-August 2. That number declined to 740,721 during August 3-16 and further declined to 600,417 new cases in the August 17-30 period and was further reduced to 524,526 new cases in the August 31-September 13 period. The downtrend was reversed during September 14-27, when the number of new cases increased to 592,690 or a daily average of 42,335 cases. During September 28-October 11, the United States recorded 640,149 new cases (45,725/day). That number is likely to continue upward as recent days have seen the United States recording new cases at more than 50,000/day.

The United States had the second largest number of new cases, following only India whose number of new cases has started a slow descent from its peak of 1,238,176 new cases two weeks ago, with 1,061,274 new cases recorded during September 28-October 11. India is the only country to have recorded more than one million cases in a two week period.

Brazil maintains its hold on third place though its new cases are falling since July 20-August 2 (633,017 new cases) to 609,219 new cases during August 3-16, 529,057 new cases during August 17-30, 469,534 new cases during August 31-September 13, 402,304 new cases during September 14-27 and 364,646 during September 28-October 11.

India, the United States and Brazil accounted for 47.31% of the new global cases during the last two weeks, down from 54.33% during September 14-27 and down from 58.34% in the August 31-September 13 period. The three countries account for prior two weeks) and account for 53.25% of all cases confirmed since late December 2019.

The United States with 4.3% of global population has accounted for 20.70% of total confirmed cases since December 2019 — 4.81 times the share of total cases our population would justify. With the increase in the most recent two weeks, the U.S. was 14.66% of the total new cases during the last two weeks (Sept. 28-October 11) or 3.41 times the U.S. share of global population. The U.S. also accounts for 19.97% of total deaths or 4.64 times the U.S. share of global population.

Changing pattern of growth in cases, developing world still experiencing significant volume of new cases

As reviewed above the United States is seeing a rising number of cases over the last four weeks, a trend that unfortunately seems certain to continue in the near future.

Many developed countries have seen a second wave of cases, as will be reviewed below, which has increased the percent of global new cases occurring in developed countries.

Still a very large part of the new cases are in developing countries as has been true for the last few months. While India and Brazil had by far the largest number of new cases from developing countries, they were followed by Argentina (181,412), Colombia (96,709), Mexico (87,897), Indonesia (57,613), Iraq (54,155), Iran (53,167), Peru (45,496), the Philippines (35,670), Morocco (31,157), Chile (23,616), South Africa (21,398), Turkey (21,065), Bangladesh (19,200) and then dozens of other countries with smaller numbers of new cases. Of the listed developing countries, only Argentina, Mexico, Indonesia, Iran, Morocco, Chile and South Africa saw increases from the September 14-27 period.

Continued developed country resurgence in new cases

With the reopening of some international travel and with the end of the summer holiday season and the start of cooler weather in fall for northern hemisphere countries, there has been a noticeable surge of new cases in many developed countries, particularly in Western Europe where is it generally described as the coming of a second wave of COVID-19 cases.

France’s spike continued with 191,427 new cases in September 28-October 11 up from 153,535 in the prior two weeks. France’s most recent numbers are 3.36 times the number recorded in August 17-30 period (57,009 new cases) and 1.89 times the number in the August 31-September 13 period, 101,381.

Spain’s spike seems to have plateaued and started a decline in the September 28-Ocotber 11 period with 144,631 new cases. For August 17-30, Spain saw 96,473 new cases. The August 31-September 13 period saw a further large increase for Spain to 127,040 cases. For the period from September 14-27, Spain’s numbers further increased to 150,155.

The United Kingdom is facing major challenges as the last two weeks saw new cases more than double to 161,567 from 64,103 new cases in September 14-27 and just 32,422 new cases in the August 31-September 13 period.

The Netherlands more than doubled its number of new cases during September 28-Ocotber 11 to 59,561 from 27,584 new cases during September 14-27 and just 11,374 during August 31-September 13.

Germany showed a significant increase in the most recent two weeks to 38,724 from 24,712 the prior two weeks and 17,657 new cases in the period from the end of August to mid September.

Czechia which spiked following summer vacations saw its number of new cases during September 28-October 11 grow to 46,080 from 23,893 the prior two weeks and from 11,307 in the August 31 – September 13 period.

Italy jumped to 41,390 new cases during September 28-October up from 21,807 during September 14-27.

Belgium added 40,791 in the September 28-October 11 period more than doubling the numbers from September 14-27 of 17,797.

Romania added 31,168 in the last two weeks up from 18,849 the prior two week.

The Russian Federation had a large spike in the last two week up to 141,513 from 86,209 in the September 14-27 period.

Ukraine saw 60,762 new cases in September 28-October 11, up from 43,645 new cases the prior two weeks.

Canada has seen a second wave in the last four weeks, with new cases in August 31-September 13 time period being 8,468, followed by 15,530 during September 14-27 and 26,466 during September 28-October 11.

Israel’s second wave which reached 73,883 new cases during September 14-27, saw a decline to 62,903 new cases in the September 28-October 11 period.

Deaths/100,000 population

The United States has the largest number of deaths of any country to date (214,377) and had the second largest number of deaths in the last two weeks (9,880) behind only India (13,381). Both the U.S. and India saw the number of new deaths decline from the prior two weeks. The countries with the highest number of deaths per 100,000 population for the last two weeks were the following: Argentina (17.95), Israel (5.87), Mexico (5.80), Ecuador (5.27), Costa Rica (4.91), Colombia (4.70), Moldova (4.43), Brazil (4.17), Bolivia (4.03), Panama (3.74), Spain (3.62), Chile (3.59), Iran (3.50), Romania (3.46), Peru (3.33), and the United States (3.00). All other countries (including all other developed countries) had lower rates of death per 100,000 population. For all countries, the death rate over the last two weeks was 1.03 deaths/100,000 population. So the U.S.’s death rate over the last two weeks was 2.91 times the global average and was much higher than many large and/or developed countries. China’s number was so low, it was 0.00 people/100,000 population; France was 1.47, Germany 0.19, India 1.01, Italy 0.53, Japan 0.06, South Korea 0.06, Singapore 0.00, United Kingdom 1.18, Taiwan 0.00, Canada 0.86, Australia 0.11, New Zealand 0.00.

If looking at the entire period since the end of December 2019 through October 11, the average number of deaths for all countries per 100,000 of population has been 14.14 deaths. The nine countries (of 86 which account for over 98% of total deaths) with the highest death rates/100,000 for the full period are: Peru (102.19), Belgium (88.82), Bolivia (72.02), Brazil (71.17), Spain (70.16), Ecuador (70.15), Chile (70.03), Mexico (65.56), the United States (65.15). With the exception of Bolivia, Brazil, Chile, Ecuador, Mexico Peru and the United States, each of the other top countries overall has shown a drastic reduction since their peaks in April and as reflected in the experience in the last two weeks (the European countries were typically less than 1 death per 100,000). The United States death rate has been 4.61 times the global rate and many times higher than nearly all other developed countries and most developing countries. Consider the following examples: China, where the virus was first found, has a death per 100,000 population of just 0.33 people. India’s data show 7.93 per 100,000 population; Germany has 11.58; Japan has 1.28; Korea is just 0.84; Canada is 25.62; Switzerland is 20.98; Poland is 7.83; Ukraine is 11.11; Norway is 5.16; Australia is 3.56; New Zealand is 0.52.

Conclusion

The world in the first nine and a half months of 2020 has struggled to get the COVID-19 pandemic under control. While many countries in Europe and some in Asia and the major countries in Oceania had greatly reduced the number of new cases over time, there has been a significant resurgence in many of these countries (particularly in Europe) as their economies reopen, travel restrictions are eased, schools reopen in many countries and fall comes to the northern hemisphere. But the number of new cases continues to rage in much of the Americas (and there is a new surge in Canada and the start of resurgence in the U.S.), in parts of Asia (in particular India) and in limited parts of Africa. A recent WTO Secretariat information paper showed that there has been a reduction in shortages of many medical goods needed to handle the COVID-19 pandemic which is obviously good news, although as the global total of new cases continues to rise, there may yet be additional challenges in terms of supply. See 18 September 2020, Information Note, How WTO Members Have Used Trade Measures to Expedite Access to COVID-19 Critical Medical Goods and Services, https://www.wto.org/english/tratop_e/covid19_e/services_report_16092020_e.pdf.

In the northern hemisphere, countries are going into fall where there will likely be greater time spent indoors which could result in a significant spike in cases which could further stretch the global ability to respond.

Moreover, in many countries, stimulus packages have run their course such that large scale increases in unemployment could happen in the coming weeks. This has been the case in the United States even though the President and many of those closest to him have tested positive for COVID-19. Efforts at a new stimulus package have stalled despite a House which passed a package back in May and a second package in recent weeks. It remains unclear if anything will happen before the national elections on November 3. The result has been tens of thousands of employees furloughed in the airline industry, at major employers like Disney and will likely be the case for many state and local government employees with the start of the fiscal year in October and the obligation for most states to run a balanced budget. The failure of a new stimulus initiative will significantly increase the braking action on the economy from the pandemic in the fourth quarter of 2020 in the United States.

Similarly as countries in much of the developed world take new restrictive actions to address the second wave of cases, there will likely be significant ongoing effects to the global economy and international trade.

The last four weeks (beginning on September 14 through October 11) have seen the global number of new cases continue to grow after six weeks in July and most of August of what appeared to be a peak or plateau. For the reasons reviewed above, October – December are likely to see continued growth in the global number of new cases.

The progress on developing safe and effective vaccines is encouraging and has been sped by the willingness of major economies like the U.S. and the EU to fund manufacturing ahead of actual approval of the promising vaccines. Still the timing of outcomes remains unknown though anticipated by the end of 2020 and first part of 2021. China has been distributing one of its vaccines to parts of its population in advance of formal clearance of stage three trials. The Russians have been lining up customers for their vaccine even though the stage three trials are only underway and the results will lag the initial rollout of the vaccine. For other countries (the U.S., European Union, Japan, etc.) the rollout of vaccines if approved will take time to get large parts of the global population vaccinated. It is unclear what the global capacity will be to produce vaccines proven to be safe and effective, although reports suggest a likely significant shortfall despite government assistance in the global supplies that will be available in 2021. This uncertainty about likely capacities, plus the large purchases made by major western governments (U.S., EU, U.K., Japan), will likely place a large cloud over much if not all of 2021 in terms of distribution of vaccines even in an optimistic scenario.

With the world collectively unable to get the pandemic under control in many parts of the world, with likely increases this fall and winter, with fatigue in many countries on the actions needed to slow the spread of the virus and, in at least some countries, the mixed messages from government on the correct actions needed to gain control, the rest of 2020 will be very challenging. With the global death count now over one million, there have already been tens of thousand and likely hundreds of thousands of deaths that didn’t need to occur. The prospect of tens of thousands or even hundreds of thousands more dying needlessly hang over the global community as an inexplicable failure of at least some governments to protect their citizens and to cooperate for a comprehensive global response.

In last two weeks global COVID-19 cases increased by more than 4.1 million as virus continues to spin out of control

After plateauing in terms of new cases during August, COVID-19 new cases are increasing rapidly for the world as a whole. For the period September 14-27, data compiled by the European Centre for Disease Prevention and Control show new cases in the world topping four million for the first time — 4,110,081. That compares to 3,780,469 new cases in the August 31-September 13 period and 3,558,360 for August 17-30, 3,624,548 for August 3-16 and 3,568,162 for the July 20-August 2 period. Total cases since the end of December 2019 are now above 32.9 million.

The United States which has more confirmed cases (7,078,798) than any other nation and more confirmed deaths from COVID-19 (204,497), saw the number of new cases increase over the last two weeks after three two week periods where the U.S. saw a decline in new cases. The U.S. recorded the extraordinary number of 908,980 new cases during the fourteen day period July 20-August 2. That number declined to 740,721 during August 3-16 and further declined to 600,417 new cases in the August 17-30 period and was further reduced to 524,526 new cases in the August 31-September 13 period. The downtrend was reversed these past two week, when the number of new cases increased to 592,690 or a daily average of 42,335 cases. The United States had the second largest number of new cases, following only India whose number of new cases is continuing to increase, and were 1,238,176 in the last two weeks, slightly higher than the 1,211,623 new cases reported in the August 31-September 13 period. India is the only country to have recorded more than one million cases in a two week period and appears to have plateaued at a rate of more than 88,000/day over the last month.

Brazil maintains its hold on third place though its new cases are falling since July 20-August 2 (633,017 new cases) to 609,219 new cases during August 3-16, 529,057 new cases during August 17-30, 469,534 new cases during August 31-September 13 and down to 402,304 new cases during September 14-27.

India, the United States and Brazil accounted for 54.33% of the new global cases during the last two weeks (down from 58.34% in the prior two weeks) and account for 54.04% of all cases confirmed since late December 2019 (up from 54.01% through two weeks ago).

The United States with 4.3% of global population has accounted for 21.51% of total confirmed cases since December 2019 — five times the share of total cases our population would justify. With the increase in the most recent two week after six weeks of declines, the U.S. was 14.42% of the total (up from 13.87% of new cases during August 17-30) or 3.35 times the U.S. share of global population. The U.S. also accounts for 20.55% of total deaths or 4.78 times the U.S. share of total population.

Continued growth of cases in the developing world

With the number of new cases in the United States declining over most of the last two months, the trend of new cases being focused on the developing world has shifted with a resurgence in Europe following the summer vacation period with a renewal of at least some international travel. While India and Brazil had by far the largest number of new cases from developing countries, they were followed by Argentina (166,781), Colombia (97,074), Peru (77,301), Iraq (73,883), Mexico (62,458), Iraq (59,191), Indonesia (56,582), the Philippines (43,393), Iran (43,146), Turkey (23,331), Chile (23,313), Bangladesh (21,829), South Africa (21,284) and then dozens of other countries with smaller numbers of new cases. Of the listed developing countries, only India, Argentina, Iraq, Indonesia, Iran and Turkey saw increases from the August 31-September 13 period.

Developed country resurgence in new cases

With the reopening of some international travel and with the end of the summer holiday season, there has been a noticeable surge of new cases in a number of developed countries, particularly in Western Europe where is it generally described as the coming of a second wave of COVID-19 cases. France overtook Spain for the most new cases during September 14-27 with a total of 153,535. France nearly doubled the large number it had experienced in the August 17-30 period (57,009 new cases) in the August 31-September 13 period with new cases reaching 101,381. Spain continues to show large increases for a developed country that had gotten the COVID-19 spread under control until recently. For August 17-30, Spain saw an additional 96,473 new cases. The August 31-September 13 period saw a further large increase for Spain to 127,040 cases. For the period from September 14-27, Spain’s numbers further increased to 150,155. The United Kingdom nearly doubled the number of new cases to 64,103 up from 32,422 new cases in the August 31-September 13 period. The Netherlands more than doubled its number of new cases during September 14-27 from the prior two week period going to 27,584 new cases from 11,374. Germany showed a significant increase in the most recent two weeks to 24,712 from the prior two weeks (17,657 new cases; two weeks before that 17,538 new cases). Czechia which spiked following summer vacations saw its number of new cases grow to 23,893 from 11,307 in the August 31 – September period; Italy added 21,807 (up from 19,444 the prior two weeks); Romania added 18,849 (up from 16,553 in the prior two weeks). Other countries in Europe (Russia (86,209 new cases), Ukraine (43,645 new cases) and Hungary (12,189 new cases)) as well as Israel (73,883 new cases) also saw significant additional new cases.

Deaths/100,000 population

The United States has the largest number of deaths of any country to date (204,497) and had the second largest number of deaths in the last two weeks (10,796) behind only India (15,917), though the U.S. number of new deaths declined slightly from the prior two weeks while India’s number of new deaths continued to climb. The countries with the highest number of deaths per 100,000 population for the last two weeks were the following: Argentina (9.68), Colombia (5.09), Brazil (4.83), Peru (4.76), Costa Rica (4.72), Bolivia (4.61), Mexico (4.42), Panama (3.96), Chile (3.67), Puerto Rico (3.65), Israel (3.97) and the United States (3.28). All other countries (including all other developed countries) had lower rates of death per 100,000 population. For all countries, the death rate over the last two weeks was 0.98 deaths/100,000 population. So the U.S.’s death rate over the last two weeks was 3.35 times the global average and was much higher than many large and/or developed countries. China’s number was so low, it was 0.00 people/100,000 population; France was 1.18, Germany 0.13, India 1.16, Italy 0.36, Japan 0.08, South Korea 0.08, Singapore 0.00, United Kingdom 0.52, Spain 3.16, Taiwan 0.00, Canada 0.25, Australia 0.27, New Zealand 0.02.

If looking at the entire period since the end of December 2019 through September 13, the average number of deaths for all countries per 100,000 of population has been 13.10 deaths. The nine countries (of 86 which account for over 98% of total deaths) with the highest death rates/100,000 for the full period are: Peru (98.87), Belgium (87.07), Bolivia (67.79), Spain (66.54), Chile (66.44), Ecuador (64.89), United Kingdom (62.97), Brazil (67.00), the United States (62.14). With the exception of Bolivia, Brazil, Chile, Ecuador, Peru and the United States, each of the other top countries overall has shown a drastic reduction since their peaks in April and as reflected in the experience in the last two weeks (the European countries were typically less than 1 death per 100,000). The United States death rate has been 4.74 times the global rate and many times higher many other developed countries and most developing countries. Consider the following examples: China, where the virus was first found, has a death per 100,000 population of just 0.33 people. India’s data show 6.92; Germany has 11.39; Japan has 1.22; Korea is just 0.78; Canada is 24.76; Switzerland is 20.81; Poland is 6.38; Ukraine is 8.87; Norway is 5.07; Australia is 3.45; New Zealand is 0.52.

Conclusion

The world in the first nine months of 2020 has struggled to get the COVID-19 pandemic under control. While many countries in Europe and some in Asia and the major countries in Oceania have greatly reduced the number of new cases over time, there has been a significant resurgence in many of these countries (particularly in Europe) as their economies reopen, travel restrictions are eased and as schools reopen in many countries. But the number of new cases continues to rage in much of the Americas (other than Canada), in parts of Asia (in particular India) and in limited parts of Africa. A recent WTO Secretariat information paper showed that there has been a reduction in shortages of many medical goods needed to handle the COVID-19 pandemic which is obviously good news, although as the global total of new cases continues to rise, there may yet be additional challenges in terms of supply. See 18 September 2020, Information Note, How WTO Members Have Used Trade Measures to Expedite Access to COVID-19 Critical Medical Goods and Services, https://www.wto.org/english/tratop_e/covid19_e/services_report_16092020_e.pdf.

In the northern hemisphere, countries are going into fall where there will likely be greater time spent indoors which could result in a significant spike in cases which could further stretch the global ability to respond.

Moreover, in many countries, stimulus packages have run their course such that large scale increases in unemployment could happen in the coming weeks. This is obviously the case in the United States in the airline industry (but also elsewhere) and will likely be the case for many state and local government employees with the start of the fiscal year in October and the obligation for most states to run a balanced budget. See, e.g., Bloomberg Businessweek, September 23, 2020, Airlines Face Desolate Future as Attempts to Reopen Crumble, https://www.bloomberg.com/news/articles/2020-09-23/coronavirus-pandemic-airlines-face-empty-future-as-crisis-continues?utm_campaign=news&utm_medium=bd&utm_source=applenews. The failure of a new stimulus initiative will significantly increase the braking action on the economy from the pandemic in the fourth quarter of 2020.

The September 14-27 period has seen the global number of new cases continue to grow after six weeks in July and most of August of what appeared to be a peak or plateau. October – December are likely to see continued growth in the global number of new cases.

The progress on developing safe and effective vaccines is encouraging and has been sped by the willingness of major economies like the U.S. and the EU to fund manufacturing ahead of actual approval of the promising vaccines. Still the results of the phase three trials are not yet in and as a temporary delay by AstraZeneca with its phase three trial showed, the timing of outcomes remains unknown though anticipated by the end of 2020 and first part of 2021. China has been distributing one of its vaccines to parts of its population in advance of formal clearance of stage three trials. The Russians have been lining up customers for their vaccine even though the stage three trials are only underway and the results will lag the initial rollout of the vaccine. For other countries (the U.S., European Union, Japan, etc.) the rollout of vaccines if approved will take time to get large parts of the global population vaccinated. It is unclear what the global capacity will be to produce vaccines proven to be safe and effective, although reports suggest a likely significant shortfall despite government assistance in the global supplies that will be available in 2021. This uncertainty about likely capacities, plus the large purchases made by major western governments (U.S., EU, U.K., Japan), will likely place a large cloud over much if not all of 2021 in terms of distribution of vaccines even in an optimistic scenario.

The ride is likely to get more complicated going forward with the world collectively unable to get the pandemic under control in many parts of the world, with likely increases this fall and winter, with fatigue in many countries on the actions needed to slow the spread of the virus and, in at least some countries, the mixed messages from government on the correct actions needed to gain control. With the global death count nearing one million, there have already been tens of thousand and likely hundreds of thousands of deaths that didn’t need to occur. The prospect of tens of thousands or even hundreds of thousands more dying needlessly hang over the global community. 2020 has proven to be a very challenging year. Time will tell if the challenge is confined to this year or continues to inflict substantial costs in 2021 and beyond.

COVID-19 cases increase in last two weeks, setting new global record for new cases in fourteen day period.

In my last two posts of August 30 and August 16, I suggested that it appeared that the global spread of COVID-19 may have peaked or plateauted. See August 30, 2020, The global number of confirmed COVID-19 cases passes 25 million with more than 843,000 deaths – increased race to lock-up vaccine supplies, https://currentthoughtsontrade.com/2020/08/30/the-global-number-of-confirmed-covid-19-cases-passes-25-million-with-more-than-843000-deaths-increased-race-to-lock-up-vaccine-supplies/; August 16, 2020, Is the world at the peak of the COVID-19 pandemic?  Last two weeks suggest a peaking of the growth of global infections may be at hand, https://currentthoughtsontrade.com/2020/08/16/is-the-world-at-the-peak-of-the-covid-19-pandemic-last-two-weeks-suggest-a-peaking-of-the-growth-of-global-infections-may-be-at-hand/. However, data compiled by the European Centre for Disease Prevention and Control for the August 31-September 13 period shows a return to growth in new cases. The latest two weeks show total new cases of 3,780,469. This compares to the total new cases for the August 17-30 time period of 3,558,360, 3,624,548 for August 3-16 and 3,568,162 for the July 20-August 2 period. Total cases since the end of December 2019 are now just shy of 29 million.

The United States which has more confirmed cases (6,486,108) than any other nation and more confirmed deaths from COVID-19 (193,701), had a third two-week decline in new cases. The U.S. recorded the extraordinary number of 908,980 new cases during the fourteen day period July 20-August 2. That number declined to 740,721 during August 3-16 and further declined to 600,417 new cases in the August 17-30 period and was further reduced to 524,526 new cases in the August 31-September 13 period. The most recent period is still 28.21% higher than what had been the prior peak during April 13-26 of 409,102 new cases. Even with the significant reduction in new cases in the August 31-September 13 period, the United States had the second largest number of new cases, following only India whose number of new cases is continuing to rapidly increase, and were 1,211,623 in the last two weeks (the first country to have more than one million cases in a two week period). Brazil maintains its hold on third place though its new cases are also falling since July 20-August 2 (633,017 new cases) to 609,219 new cases during August 3-16, 529,057 new cases during August 17-30 and 469,534 new cases during August 31-September 13. India, the United States and Brazil accounted for an extraordinary 58.34% of the new global cases during the last two weeks and account for 54.01% of all cases confirmed since late December 2019. The United States with 4.3% of global population has accounted for 22.52% of total confirmed cases since December 2019. With the continued declining numbers in the last two weeks while the overall total of new cases grew, the U.S. was still 13.87% of new cases during August 17-30 or roughly three times the U.S. share of global population.

Continued growth of cases in the developing world

With the number of new cases in the United States declining, the trend to new cases being focused on the developing world continues although there has been some significant resurgence of new cases in a number of developed countries during the summer vacation period with a renewal of at least some international travel. While India and Brazil had by far the largest number of new cases from developing countries, they were followed by Argentina (143,681), Colombia (109,050), Peru (83,397), Mexico (72,261), Iraq (59,332), Indonesia (45,562), the Philippines (44,732), South Africa (25,663) and then dozens of other countries with smaller numbers of new cases.

Developed country resurgence in new cases

With the reopening of some international travel and with the end of the summer holiday season, there has been a noticeable surge of new cases in a number of developed countries, particularly in Western Europe. Spain showed the largest increase of a developed country that had gotten the COVID-19 spread under control until recently. For August 17-30, Spain saw an additional 96,473 new cases. The August 31-September 13 period saw a further large increase for Spain to 127,040 cases. France nearly doubled the large number it had experienced in the August 17-30 period (57,009 new cases) in the latest two weeks, with new cases reaching 101,381. Germany was up slightly from the prior two weeks (17,538 new cases) at 17,657 new cases. Italy added 19,444; Romania added 16,553; the United Kingdom added 32,422; the Netherlands increased by 11,374; Czechia increased by 11,307. Other countries in Europe (Russia and Ukraine) as well as Israel also saw significant additional new cases.

Deaths/100,000 population

The United States has the largest number of deaths of any country to date (193,701) and had the second largest number of deaths in the last two weeks (10,922) behind only India (15,088), though the U.S. number of new deaths declined from the prior two weeks while India’s number of new deaths continued to climb. The countries with the highest number of deaths per 100,000 population for the last two weeks were the following: Ecuador (24.91), Bolivia (20.49), Colombia (7.29), Argentina (6.48), Peru (6.11), Mexico (5.32), Brazil (5.09), Panama (4.05), Chile (3.77), Puerto Rico (3.65), Costa Rica (3.41) and the United States (3.32). All other countries (including all other developed countries) had lower rates of death per 100,000 population. For all countries, the death rate over the last two weeks was 1.02 deaths/100,000 population in the last two weeks.

If looking at the entire period since the end of December 2019 through September 13, the average number of deaths for all countries per 100,000 of population has been 12.13 deaths. The ten countries (of 71 which account for 98% of total deaths) with the highest death rates/100,000 for the full period are: Peru (94.10), Belgium (86.59), Bolivia (63.38), Spain (63.38), Chile (62.76), Ecuador (62.53), United Kingdom (62.45), Brazil (62.17), Italy (58.98), the United States (58.86). With the exception of Bolivia, Brazil, Chile, Ecuador, Peru and the United States, each of the other top countries overall has shown a drastic reduction since their peaks in April and as reflected in the experience in the last two weeks (the European countries were typically less than 1 death per 100,000).

Conclusion

The world in the first eight months of 2020 has struggled to get the COVID-19 pandemic under control. While many countries in Europe and some in Asia and the major countries in Oceania have greatly reduced the number of new cases over time, there has been some resurgence in many of these countries as their economies reopen, travel restrictions are eased and as schools reopen in many countries. But the number of new cases continues to rage in much of the Americas (other than Canada), in parts of Asia (in particular India) and in parts of Africa. Since most new cases are now in developing countries, it is unclear how many of these countries will be able to handle a significant number of cases, whether their healthcare infrastructure will be overwhelmed and whether they will have the medical goods needed to handle the cases safely.

The August 31-September 13 period has seen the global number of new cases growing after six weeks of what appeared to be a peak or plateau. That is not good news for the world as in many parts of the world schools are reopening and fall and winter will bring greater time indoors likely resulting in continued growth in new cases.

The progress on developing safe and effective vaccines is encouraging and has been sped by the willingness of major economies like the U.S. and the EU to fund manufacturing ahead of actual approval of the promising vaccines. Still the results of the phase three trials are not yet in and as a temporary delay by AstraZeneca with its phase three trial shows, the timing of outcomes remains unknown though anticipated by the end of 2020 and first part of 2021. Still the rollout of vaccines if approved will take time to get large parts of the global population vaccinated. This will likely place a large cloud over much if not all of 2021 even in an optimistic scenario.

Whether the world will rise to the challenges in terms of improving access to medical goods, to maintaining an open trading system, to aiding not only national populations but ensuring assistance to the most vulnerable, and when vaccines are approved to ensuring an equitable and affordable access by all are open questions. If the world is not able to collaborate on these issues, the 2020s will be a lost decade and will threaten global security.

The global number of confirmed COVID-19 cases passes 25 million with more than 843,000 deaths — increased race to lock up vaccine supplies

In my post of August 16, I suggested that it appeared that the global spread of COVID-19 may have peaked in the August 3-16 period. See August 16, 2020, Is the world at the peak of the COVID-19 pandemic?  Last two weeks suggest a peaking of the growth of global infections may be at hand, https://currentthoughtsontrade.com/2020/08/16/is-the-world-at-the-peak-of-the-covid-19-pandemic-last-two-weeks-suggest-a-peaking-of-the-growth-of-global-infections-may-be-at-hand/. Data compiled by the European Centre for Disease Prevention and Control show total new cases for the August 17-30 time period to be 3,558,360 compared to 3,624,548 for August 3-16 and 3,568,162 for the July 20-August 2 period. Thus, global new cases seem to have peaked or to have reached a plateau.

The United States which has more confirmed cases than any other nation and more confirmed deaths from COVID-19, had a second two-week decline in new cases. The U.S. recorded the extraordinary number of 908,980 new cases during the fourteen day period July 20-August 2. That number declined to 740,721 during August 3-16 and further declined to 600,417 new cases in the August 17-30 period. The most recent period is still 46.76% higher than what had been the prior peak during April 13-26 of 409,102 new cases. Even with the significant reduction in new cases in the August 17-30 period, the United States had the second largest number of new cases, following only India whose number of new cases is continuing to rise and were 953,051 in the last two weeks. Brazil maintains its hold on third place though its new cases are also falling since July 20-August 2 (633,017 new cases) to 609,219 new cases during August 3-16 and to 529,057 new cases during August 17-30. India, the United States and Brazil accounted for an extraordinary 58.5% of the new global cases during the last two weeks and account for 53.39% of all cases confirmed since late December 2019. The United States with 4.3% of global population has accounted for 23.82% of total confirmed cases since December 2019. With the declining numbers in the last two weeks, the U.S. was still 16.87% of new cases during August 17-30 or roughly four times the U.S. share of global population.

Continued growth of cases in the developing world

With the number of new cases in the United States declining, the trend to new cases being focused on the developing world continues although there has been some significant resurgence of new cases in a number of developed countries during the summer vacation period with a renewal of at least some international travel. While India and Brazil had by far the largest number of new cases from developing countries, they were followed by Colombia (143,225), Peru (113,632), Argentina (109,585), Mexico (73,998), Iraq (54,863), the Philippines (55,213), South Africa (38,898) and then dozens of other countries with smaller numbers of new cases.

Spain showed the largest increase of a developed country that had gotten the COVID-19 spread under control until recently. For August 17-30, Spain saw an additional 96,473 new cases. France added 57,009 new cases; Germany saw 17,538 new cases. Other countries in Europe as well as Japan and Korea also saw significant additional new cases.

Deaths/100,000 population

The United States has the largest number of deaths of any country to date (182,779) and had the second largest number of deaths in the last two weeks (13,298) behind only India (13,518). The countries with the highest number of deaths per 100,000 population were the following: Colombia (8.45), Bolivia (8.12), Peru (7.79), Brazil (6.27), Argentina (6.12), Mexico (5.70), Panama (5.58),Chile (4.15), United States (4.04). All other countries (including all other developed countries) had lower rates of death per 100,000 population. For all countries, the death rate over the last two weeks was 1.01 deaths/100,000 population.

If looking at the entire period since the end of December 2019 through August 30, the average number of deaths for all countries per 100,000 of population has been 11.10 deaths. The nine countries (of 71 which account for 98% of total deaths) with the highest death rates/100,000 for the full period are: Belgium (86.34), Peru (87.99), United Kingdom (62.27), Spain (61.81), Chile (59.00), Italy (58.77), Brazil (57.08), Sweden (which did not impose any restrictions)(56.90), the United States (55.54). With the exception of Brazil, Chile, Peru and the United States, each of the other top countries overall has shown a drastic reduction since their peaks in April and as reflected in the experience in the last two weeks (all the European countries were less than 1 death per 100,000).

Race for vaccines

There have been many press articles looking at efforts by the United States, by the EU and by others to lock up large quantities of vaccines from companies whose vaccines are in third phase trials for early availability to their populations. See, e.g., European Commission, 14 August 2020, Coronavirus: Commission reaches first agreement on a potential vaccine, https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1438. The Russian Federation has released a vaccine that did not go through a third phase trial and has received interest from some developing countries. After international criticism, the Russian Federation is now pursuing Phase 3 trials. AP, Putin touts Russia’s COVID-19 vaccine as effective and safe, August 27, 2020, https://apnews.com/f505b2fe730b56b558b8f76bf1932af0.

China has been promising some trading partners preferential access to its vaccines. See, e.g., Wall Street Journal, August 17, 2020, China Seeks to Use Access to COVID-19 Vaccines for Diplomacy, https://www.wsj.com/articles/china-seeks-to-use-access-to-covid-19-vaccines-for-diplomacy-11597690215

For the Philippines, their President has been shopping with the U.S., Russia and China for early access. See, e.g., Nikkei Asia, August 11, 2020, Duterte takes Russia’s offer of COVID vaccine after asking China, https://asia.nikkei.com/Politics/International-relations/Duterte-takes-Russia-s-offer-of-COVID-vaccine-after-asking-China.

Beyond the national or regional efforts to secure priority for vaccines when developed, joint efforts continue as part of the WHO effort to ensure that vaccines and other medical goods relevant to addressing COVID-19 are available equitably to all people and at affordable prices. See, e.g., European Union, Coronavirus Global Response, https://global-response.europa.eu/index_en.

So while it may not be surprising to see countries looking first and foremost about the health of their own citizens, the World Health Organization has warned that no one is safe until all are safe from the COVID-19. The next six months to a year will be a test of whether the efforts of many to provide funding and other resources to ensure greater equitable access to vaccines at affordable prices can coexist with national efforts to prioritize their own citizens.

Conclusion

The world in the first eight months of 2020 is struggling to get the COVID-19 pandemic under control. While many countries in Europe and some in Asia and the major countries in Oceania have greatly reduced the number of new cases over time, there has been some resurgence in many of these countries as their economies reopen, travel restrictions are eased and as schools reopen in many countries. But the number of new cases continues to rage in much of the Americas (other than Canada), in parts of Asia (in particular India) and in parts of Africa. Since most new cases are now in developing countries, it is unclear how many of these countries will be able to handle a significant number of cases, whether their healthcare infrastructure will be overwhelmed and whether they will have the medical goods needed to handle the cases safely.

August has seen the global number of new cases peak and possibly start to decline. That is some good news although the number of new cases on a daily basis continues to strain the global supply system.

The progress on developing safe and effective vaccines is encouraging and has been sped by the willingness of major economies like the U.S. and the EU to fund manufacturing ahead of actual approval of the promising vaccines. While this puts a lot of money at risk should one or more of the vaccines in trials not prove safe or effective, it saves a great deal of time in getting product to market if approved. In a global economy in which least developed countries, small and vulnerable economies and other developing countries are experiencing significant economic challenges because of travel restrictions and trade contractions flowing from efforts to address the pandemic, achieving equitable and affordabale access to vaccines when available is a global imperative. Time will tell if the imperative is achieved or not.

WTO Dispute Settlement Body Meeting of August 28, 2020 — How disputes are being handled in the absence of reform of the Appellate Body

No forward movement has been made on resolving the impasse of the WTO’s Appellate Body which effectively ceased to operate for new appeals after December 10, 2019 when the number of active Appellate Body members fell below the minimum of three needed to hear appeals. At every monthly Dispute Settlement Body meeting, one of the Members presents the proposal to start the process of selecting new Appellate Body members and the U.S. indicates it is not in a position to agree to that action.

While the impasse continues, Members are dealing with how to proceed on specific disputes that have been filed and how to deal with panel decisions that get issued. For the EU and 22 other Members who are parties to the multi-party interim appeal arrangement (MPIA), disputes involving two members of the MPIA are handled through the MPIA after a panel decision if one or both parties are dissatisifed with the panel decision. Current members of the MPIA are Australia, Benin, Brazil, Canada, China, Chile, Colombia, Costa Rica, Ecuador, the European Union, Guatemala, Hong Kong (China), Iceland, Mexico, Montenegro, New Zealand, Nicaragua, Norway, Pakistan, Singapore, Switzerland, Ukraine and Uruguay. This means that more than 110 WTO Members are not parties to the MPIA including the United States, Japan, Korea, India, Indonesia, Malaysia, Argentina, Peru, Egypt, South Africa, Saudi Arabia, the Russian Federation and many others.

Disputes between all other WTO Members or between other Members and one of the MPIA members require the parties to the dispute either before the panel decision or afterwards to decide how they will proceed. Concerns of many WTO Members is that a party dissatisfied with a panel decision will take an appeal which will effectively stop resolution of the matter as an appeal cannot be heard while there is no functioning Appellate Body.

MPIA members can take appeals where they are in a dispute with a non-MPIA member instead of seeking resolution through other means. For example, the Russian Federation is not a member of the MPIA. Their dispute with the EU on its antidumping methodology resulted in a panel decision that the EU found problematic. The EU filed an appeal on August 28, 2020. See WTO, Dispute Settlement, EU appeals panel report on EU dumping methodologies, duties on Russian imports, https://www.wto.org/english/news_e/news20_e/ds494apl_28aug20_e.htm. When raised at the August 28 dispute settlement body (DSB) meeting, Russia provided the following comment:

“The Russian Federation made a statement regarding the European Union’s appeal of the panel ruling in in DS494 (https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds494_e.htm) (EU —
Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia). Russia said it was disappointed with the EU’s decision and that that the EU’s action, in the absence of a functioning Appellate Body, essentially meant that the matter was being appealed “into the void.” The EU was seeking to escape its obligations by not trying to resolve the dispute,
Russia said.” https://www.wto.org/english/news_e/news20_e/dsb_28aug20_e.htm.

Interestingly, the EU has been working to be able to retaliate on any WTO Member who is not a party to the MPIA who appeals from a panel decision where the EU is a party. Presumably they understand that their action will encourage countries like the Russian Federation to take unilateral action against the EU where the EU appeals a panel decision instead of seeking a mutually agreeable solution.

The United States has reviewed at prior DSB meetings that there are many ways for Members to resolve disputes between themselves. At the recent DSB meeting, the U.S. in its prepared statement, after reviewing its ongoing concerns with the Appellate Body and the need to understand why the Appellate Body ignored the clear limits on its authority under the Dispute Settlement Understanding, provided examples of how Members are resolving disputes since December 10, 2019:

“ As discussions among Members continue, the dispute settlement system continues to function.

“ The central objective of that system remains unchanged: to assist the parties to find a solution to their dispute. As before, Members have many methods to resolve a dispute, including through bilateral engagement, alternative dispute procedures, and third-party adjudication.

“ As noted at prior meetings of the DSB, Members are experimenting and deciding what makes the most sense for their own disputes.

“ For instance, in Indonesia – Safeguard on Certain Iron or Steel Products (DS490/DS496), Chinese Taipei, Indonesia, and Vietnam reached procedural understandings that included an agreement not to appeal any compliance panel report.3

“ Similarly, in the dispute United States – Anti-Dumping Measures on Certain Oil Country Tubular Goods from Korea (DS488), Korea and the United States agreed not to appeal the report of any compliance panel.4

“ Australia and Indonesia have agreed not to appeal the panel report in the dispute Australia – Anti-Dumping Measures on A4 Copy Paper (DS529).5

“ Parties should make efforts to find a positive solution to their dispute, consistent with the aim of the WTO dispute settlement system.

“ The United States will continue to insist that WTO rules be followed by the WTO dispute settlement system. We will continue our efforts and our discussions with Members and with the Chair to seek a solution on these important issues.

“3 ‘Understanding between Indonesia and Chinese Taipei regarding Procedures under Articles 21 and 22 of the DSU’, (WT/DS490/3) (April 11, 2019), para. 7 (‘The parties agree that if, on the date of the circulation of the panel report under Article 21.5 of the DSU, the Appellate Body is composed of fewer than three Members available to serve on a division in an appeal in these proceedings, they will not appeal that report under Articles 16.4 and 17 of the DSU.’) and ‘Understanding between Indonesia and Viet Nam regarding Procedures under Articles 21 and 22 of the DSU’, WT/DS496/14 (March 22, 2019), para. 7 (‘The parties agree that if, on the date of the circulation of the panel report under Article 21.5 of the DSU, the Appellate Body is composed of fewer than three Members available to serve on a division in an appeal in these proceedings, they will not appeal that report under Articles 16.4 and 17 of the DSU.’).

“4 ‘Understanding between the Republic of Korea and the United States regarding Procedures under Articles 21 and 22 of the DSU’, (WT/DS488/16) (February 6, 2020), para. 4 (‘Following circulation of the report of the Article 21.5 panel, either party may request adoption of the Article 21.5 panel report at a meeting of the DSB within 60 days of circulation of the report. Each party to the dispute agrees not to appeal the report of the Article 21.5 panel pursuant to Article 16.4 of the DSU.’).

“5 Minutes of the Meeting of the Dispute Settlement Body on January 27, 2020 (WT/DSB/M/440), paras. 4.2 (‘Indonesia also wished to thank Australia for working together with Indonesia in a spirit of cooperation in order to reach an agreement not to appeal the Panel Report’ and 4.3 (‘Australia and Indonesia had agreed not to appeal the Panel Report and to engage in good faith negotiations of a reasonable period of time for Australia to bring its measures into conformity with the DSB’s recommendations and rulings, in accordance with Article 21.3(b) of the DSU.’).”

Statements by the United States at the Meeting of the WTO Dispute Settle- ment Body, Geneva, August 28, 2020 at 14, https://geneva.usmission.gov/wp-content/uploads/sites/290/Aug28.DSB_.Stmt_.as-deliv.fin_.public.pdf.

Thus, there are ways for WTO Members to resolve disputes between themselves even with the Appellate Body inoperative. Some countries, like Australia, have sought positive resolutions where the other disputing party is not a member of MPIA. To date, the European Union has not sought resolution with members who are not party to the MPIA but have rather filed appeals so cases will sit in limbo until such time as the impasse is resolved.

Concluding comments

While each of the eight candidates to become the next Director-General of the WTO believe resolution of the dispute settlement system impasse is an important priority for the WTO, they differ in how quickly they believe Members will be able to overcome the impasse — Dr. Jesus Seade (Mexico) believes it can be resolved in the first 100 days. Amb. Tudor Ulianovschi believes that the challenges presented will not be resolved ahead of the 12th Ministerial Conference in 2021 but will be resolved sometime thereafter. Most other candidates hold out hope that the impasse can be resolved by the next Ministerial in 2021. Thus, the current situation of no functioning Appellate Body may continue for some time.

The U.S. Trade Representative Robert Lighthizer in an Op Ed last week in the Wall Street Journal suggested that reform of the dispute settlement system is critical but may involve changing the system from its existing two-tiered configuration under the DSU to a one-tier process more like commercial arbitration. If that is the path that the United States pursues, resolution of the current situation will take years. See August 24, 2020,  USTR Lighthizer’s Op Ed in the Wall Street Journal – How to Set World Trade Straight, https://currentthoughtsontrade.com/2020/08/24/ustr-lighthizers-op-ed-in-the-wall-street-journal-how-to-set-world-trade-straight/.

Similarly, if dispute settlement reform is lumped into the broader WTO reform being discussed, the timing will be significantly delayed if reform of the WTO is to be meaningful and return the organization to a place of relevance in the 21st century.

With the queue of panel decisions that are yet due this year involving some high profile issues (e.g., national security actions by the United States on steel and aluminum and retaliation taken by many trading partners) and with the recent panel report on the U.S. countervailing duty order on Canadian softwood lumber, pressure will likely build on WTO Members to find a lasting solution to the current impasse. Increased pressure suggests heightened tensions in an organization already suffering from distrust among Members and, as a result, largely nonfunctioning pillars of negotiation, notification/monitoring, dispute settlement. In short, 2021 promises to be a challenging environment for the WTO Members and the incoming Director-General.

The race to become the next WTO Director-General — where the candidates stand on important issues: convergence vs. coexistence of different economic systems; possible reform of rules to address distortions from such economic systems – Part 1, Background on issues

Background

When China acceded to the World Trade Organization in 2001, it had had a long working party process as WTO Members focused on the wide array of changes to laws, regulations and practices that China would need to undertake to have an economic system and policies that were consistent with WTO norms. China made many changes to its policies ahead of accession. However, the extent of modifications needed to the Chinese system that were still not accomplished by 2001 meant that the Protocol of Accession and the Working Party Report that China and WTO Members agreed to were unprecedented in terms of the number of additional changes that needed to be made for China’s system to be compatible with WTO norms. Indeed, periodic reviews over a decade were included of China’s actions to permit other WTO Members to understand the extent of compliance with the wide ranging modifications still needed. As China was moving from a state-controlled economy towards a market economy, WTO Members insisted on special rules to address some of the likely distortions a large economy like China with significant state controls was anticipated to create. A country-specific safeguard and special recognition of nonmarket economy provisions in trade remedies were included in the Protocol of Accession. While China accepted all three provisions to obtain membership in the WTO, China always expressed its views that these additional provisions were discriminatory and an effort to hold China back in terms of economic growth.

While China continued to make progress in its reform program for a number of years after acceding to the WTO, beginning with the financial crisis of 2008-2009 China reversed direction and increased the importance of state-owned and state-invested enterprises, state planning and state control of a wide array of factors of production. A former Director-General of the WTO and former EC Trade Commissioner reviewed the challenges for market economy countries in dealing with a country with a large share of its economy controlled by the state. See July 27, 2020, Pascal Lamy’s recent comments on the challenges facing the WTO, https://currentthoughtsontrade.com/2020/07/27/pascal-lamys-recent-comments-on-the-challenges-facing-the-wto/.

Many major trading partners have worked with China since its WTO accession to address perceived distortions flowing from its economic system and to help China handle the obligations it had undertaken upon joining the WTO. Many commitments for change were made by China with limited actual forward movement achieved in the views of at least some trading partners. Members like the United States undertake their own annual review of China’s compliance with WTO obligations in an effort to chronicle China’s changing economic system and whether there are distortions of concern to China’s trading partners. See, e.g., U.S. Trade Representative, 2019 Report to Congress on China’s WTO Compliance (March 2020)(embedded below). As stated on page 4:

“Over the past nearly two decades, a variety of bilateral and multilateral efforts were pursued by the United States and other WTO members to address the unique challenges presented by China’s WTO membership. However, even though these efforts were persistent, they did not result in meaningful changes in China’s approach to the economy and trade.

“In our past reports, we identified and explained the numerous policies and practices pursued by China that harm and disadvantage U.S. companies and workers, often severely. We also catalogued the United States’ persistent yet unsuccessful efforts to resolve the many concerns that have arisen in our trade relationship with China. We found that a consistent pattern existed where the United States raised a particular concern, China specifically promised to address that concern, and China’s promise was not fulfilled.

“The costs associated with China’s unfair and distortive policies and practices have been substantial. For example, China’s non-market economic system and the industrial policies that flow from it have systematically distorted critical sectors of the global economy such as steel and aluminum, devastating markets in the United States and other industrialized countries. China also continues to block valuable sectors of its economy from foreign competition, particularly services sectors. At the same time, China’s industrial policies are increasingly responsible for displacing companies in new, emerging sectors of the global economy, as the Chinese government and the Chinese Communist Party powerfully intervene on behalf of China’s domestic industries. Companies in economies disciplined by the market cannot effectively compete with both Chinese companies and the Chinese state.”

2019_Report_on_Chinas_WTO_Compliance

The 11th Ministerial Conference and a Joint Statement by EU, Japan and the United States

The challenges of China’s economic system have been felt in many global industries in a number of ways. There has been massive excess capacity created by China’s policies (and those of some other countries). Efforts to address excess capacity in steel proved unsuccessful. But literally dozens of industries faced excess capacity in China which has resulted in flooded global markets and harm to competing producers in other countries.

At the same time there have been major concerns about forced technology transfers for companies wanting to operate in China, a myriad and changing set of barriers (formal and informal) discriminating against imports and foreign owned enterprises in certain sectors.

By the 11th WTO Ministerial Conference, the United States, European Union and Japan had decided more formal action was needed to address the ongoing distortions being created by China and other countries emulating the Chinese model of economic system. At the end of the Conference, the three WTO Members issued a joint statement which stated in large part,

“We shared the view that severe excess capacity in key sectors exacerbated by government-financed and supported capacity expansion, unfair competitive conditions caused by large market-distorting subsidies and state owned enterprises, forced technology transfer, and local content requirements and preferences are serious concerns for the proper functioning of international trade, the creation of innovative technologies and the sustainable growth of the global economy.

“We, to address this critical concern, agreed to enhance trilateral cooperation in the WTO and in other forums, as appropriate, to eliminate these and other unfair market distorting and protectionist practices by third countries.”

https://ustr.gov/about-us/policy-offices/press-office/press-releases/2017/december/joint-statement-united-states

There have been a series of meetings of the three trade ministers since then providing an update on their joint efforts. A joint statement in January 2020 outlined the types of industrial subsidies where the three major WTO Members believed greater disciplines were needed and outlined other areas where joint efforts were underway. The 2018, 2019 and 2020 joint statements can be found here, with the 2020 statement embedded after the links. See Joint Statement on Trilateral Meeting of the Trade Ministers of the United States, Japan, and the European Union, 09/25/2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/august/statement-meetings-between-united; Joint Statement of the Trilateral Meeting of the Trade Ministers of the United States, European Union, and Japan, 05/23/2019, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/may/joint-statement-trilateral-meeting; Joint Statement of the Trilateral Meeting of the Trade Ministers of Japan, the United States, and the European Union, 01/14/2020, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2020/january/joint-statement-trilateral-meeting-trade-ministers-japan-united-states-and-european-union.

1-14-2020-Joint-Statement-of-the-Trilateral-Meeting-of-the-Trade-Ministers-of-Japan-the-United-States-and-the-European-Union-_-United-States-Trade-Representative

U.S. Section 301 Investigation of Certain Chinese Policies, U.S. imposition of tariffs and Chinese retaliation

In August 2017, the U.S. Trade Representative initiated an investigation on certain of China’s Acts, Policies and Practices Related to Technology Transfer, Intellectual Property, and Innovation. 82 Fed. Reg. 40,213-40,215 (Aug. 24, 2017). The investigation resulted in a determination by USTR on March 22, 2018 that various Chinese acts, policies and practices violated Section 301 of the Trade Act of 194, as amended. The President authorized the imposition of additional duties to encourage China to address the problems raised. China retaliated and through a series of further escalations, the U.S. has imposed additional duties on some $350 billion of imports from China and China has imposed additional duties on the vast majority of U.S. exports to China. The 301 report and supplement are embedded below.

Section-301-FINAL

301-Report-Update

The United States viewed the Section 301 investigation as necessary to address practices of China not addressed by WTO rules or not adequately addressed. China viewed the investigation as not permitted under WTO rules. The trade conflict and efforts to find a solution, resulted in a Phase 1 Agreement between the United States and China with most additional duties remaining in place, some substantive changes made on some issues of concern to the United States and a Phase 2 negotiation to resolve outstanding issues which has not begun as of mid-August 2020.

China’s effort to be treated as a market economy under trade remedies

China has long felt that nonmarket economy methodology employed by trading partners discriminated against China and was unjustified. On December 12 2016, the day after certain language in China’s Protocol of Accession became ineffective, China filed requests for consultations with each of the European Union (WT/DS/516) and the United States (WT/DS/515). China has not actively pursued the action against the United States. On the action against the European Union, after the matter was fully briefed at the panel stage and it was understood that an interim panel report was released to the parties, China requested on 7 May 2019 the panel to suspend its proceedings in accordance with Article 12.12 of the DSU. The panel proceeding was suspended on 14 June 2019. On 15 June 2020, the Secretariat released a note indicating that the panel’s authority in the dispute had lapsed since China had not requested the resumption of work within one year.

Thus, China remains subject to nonmarket economy methodologies by certain of its trading partners.

Proposed General Council decision submitted by the United States

The United States has raised an issue for WTO Member consideration in the form of a proposed General Council decision. The issue goes to whether the WTO is predicated on market-oriented economic principles and rests on the concern that some large WTO Members (including China) have economic systems that are characterized as non-market and that create various distortions in the global marketplace including creating massive excess capacity and other issues. While the issue has been raised by the United States for the last several years within the WTO, the U.S. permanent representative to the WTO made a strong case at the General Council meeting (Dec. 9, 2019), raised the matter again along with the draft General Council decision at the March 3, 2020 General Council meeting and raised it again at the July 22-23, 2020 General Council meeting. The proposal was opposed by China at each General Council meeting. Many Members provided comments either supporting, opposing, raising questions with the proposal or indicating the matter was being considered in capital (minutes for the July General Council meeting are not yet available). Members besides the U.S. and China who spoke include the European Union, Japan, Canada, Australia, United Kingdom, Switzerland, Norway, Mexico, Brazil, Colombia, Chinese Taipei, Uruguay, Indonesia, Nigeria, South Africa, India, Pakistan, Russian Federation, and Sri Lanka. See, e.g., Minutes of General Council Meeting, 9-10 December, 2019, WT/GC/M/181 at 59-64 (24 February 2020); The Importance of Market-Oriented Conditions to the World Trading System, Draft General Council Decision, Communication from the United States, WT/GC/W/796 (20 February 2020)(embedded below); Minutes of General Council Meeting, 3 March 2020, WT/GC/M/182 at 35-44 (16 April 2020); General Council Meeting of 22-23 July 2020, Proposed Agenda, WT/GC/W/802 (item 11)(20 July 2020).

WTGCW796

Conclusion

The crisis at the WTO has many elements but a central concern of many is whether the current WTO can be effective in ensure competitive markets when one or more major Members have an economic system largely at odds with that of most Members. The tensions created by the distortions caused by different systems has led both to increasing use of trade remedies, efforts to identify changes or additions to rules needed if convergence is not required of Members, and actions outside of the WTO where long term discussions have not resulted in the level of changes needed by countries working from market-oriented economies.

While the U.S. has reviewed provisions of the WTO that indicate the system is premised on market economy principles, a number of Members disagree that the WTO can address different economic systems. One of the Deputy-Directors General has identified core principles of the WTO and opined that the system supports convergence not coexistence. See Remarks before the Korean International Trade Association. 27 May 2020, https://www.wto.org/english/news_e/news20_e/ddgaw_27may20_e.htm back to text

It is against this complex background that candidates for the Director-General post of the WTO will be evaluated by many Members. In the next post, I turn to how the eight candidates have addressed these complex issues in terms of their prepared statements to the General Council, press conference after the General Council meeting and in the WITA webinars.

Stay tuned.