Peru

Conclusion of Joint Statement Initiative on Services Domestic Regulation — a win for the WTO and services trade

· December 6, 2021 · Declaration on the Conclusion of Negotiations on Services Domestic Regulation · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

For an organization seeking to regain relevance and facing continued delays in holding its 12th Ministerial Conference because of restrictions on travel from increased COVID-19 cases, the conclusion of the Joint Statement Initiative (JSI) on Services Domestic Regulation through the issuance of a declaration on December 2 was an important accomplishment. Sixty-seven WTO Members agreed to a reference paper and a process for amending services schedules for the participants over the next months with benefits accruing to all WTO Members and with transition periods for developing and least developed countries. See Declaration on the Conclusion of Negotiations on Services Domestic Regulation, 2 Deember 2021,WT/L/1129 (includes Annex 1, Reference Paper on Services Domestic Regulation, 26 November 2021, INF/SDR/2 and Annex 2S, Schedules of Specific Commitments, 2 December 2021, INF/SDR/3/Rev.1). The 67 WTO Members participating the JSI reportedly account for 90% of services trade. The 67 countries are Albania, Argentina, Australia, Kingdom of Bahrain, Brazil, Canada, Chile, China, Colombia, Costa Rica, El Salvador, European Union (and member states), Hong Kong, Iceland, Israel, Japan, Kazakhstan, Republic of Korea, Liechtenstein, Mauritius, Mexico, Republic of Moldova, Montenegro, New Zealand, Nigeria, North Macedonia, Norway, Paraguay, Peru, Philippines, Russian Federation, Kingdom of Saudi Arabia, Singapore, Switzerland, Taiwan, Thailand, Turkey, Ukraine, United Kingdom, United States and Uruguay.

According to the WTO press release on the completion of negotiations, the aim of the JSI was “slashing administrative costs and creating a more transparent operating environment for service providers hoping to do business in foreign markets.” WTO Press Release, Negotiations on services domestic regulation conclude successfully in Geneva, 2 December 2021, https://www.wto.org/english/news_e/news21_e/jssdr_02dec21_e.htm.

It is the first agreement at the WTO barring discrimination between men and women. WT/L/1129 at 10 (Annex I, para. 22(d), development of measures — “such measures do not discriminate between men and women.”).

The WTO and OECD released a short paper looking at the benefits to global services trade through a successful conclusion to the JSI on services domestic regulation. The study estimated that savings to service providers and their customers would be around $150 billion/year. See World Trade Organization and OECD, Services Domestic Regulation in the WTO: Cutting Red Tape, Slashing Trade Costs and Facilitating Services Trade, 19 November 2021, https://www.wto.org/english/news_e/news21_e/jssdr_26nov21_e.pdf. The four “key messages” in the study (page 1) are copied below.

“Key messages

“• Improving business climate: At the 12th WTO Ministerial Conference, the Joint Initiative on Services
Domestic Regulation will conclude negotiations on a set of good regulatory practices with a focus on procedural aspects of licensing and authorization procedures for services suppliers. By enhancing the transparency, efficiency, and predictability of regulatory systems, the disciplines on services domestic regulation that the Joint Initiative has negotiated will address the practical challenges that affect the ability of businesses and suppliers to operate.

“• Facilitating services trade: Building on efforts to identify and disseminate good regulatory practice, an
increasing number of “new generation” trade agreements have moved beyond the removal of quantitative restrictions and discriminatory measures to include a comprehensive set of disciplines largely equivalent to those developed by the Joint Initiative. At the same time, economies at all levels of income have also implemented reforms with a view to making their regulatory environment more trade facilitative for services businesses.

“• Lowering trade costs and generating broader trade benefits: Through the full implementation of the
disciplines on services domestic regulation, economies can lower trade costs and reap substantial trade
benefits: annual trade cost savings could be in the range of USD 150 billion, with important gains in financial services, business services, communications and transport services. Moreover, a positive correlation between the implementation of services domestic regulation measures and services trade by all four modes of supply, as well as a more active engagement of economies in global value chains, hints to even broader economic benefits.

“• Widespread gains beyond participants: Exporters from all WTO members will benefit from the improved regulatory conditions when they trade with participants of the Joint Initiative. However, significantly larger benefits will accrue to WTO members that are implementing the disciplines themselves in their internal regulatory frameworks.”

The study provides a summary of improved disciplines the 67 WTO Members have identified in the reference paper. The improved disciplines are grouped under transparency, legal certainty and predictability, regulatory quality and facilitation. See id at 2.

While the estimated savings once fully implemented is small in comparison to global services trade ($150 billion of 2019 estimated trade of $6.1 trillion (2.6%)(UNCTAD, 2020 Handbook of Statistics, page 33, data for 2019, https://unctad.org/system/files/official-document/tdstat45_en.pdf) as noted in the WTO press release, it is the first update of WTO rules on services in more than a quarter century. The negotiations had three co-chairs — Costa Rica, Australia and the European Union. Part of the EU’s statement by Ambassador Aguiar Machado from the December 2 meeting and announcement of the declaration is provided below. See Services Domestic Regulation Joint Initiative Meeting to conclude the negotiations (co-hosted by Costa Rica, the European Union and Australia), 2 December 2021, Geneva, https://eeas.europa.eu/delegations/brazil/108266/services-domestic-regulation-joint-initiative-meeting-conclude-negotiations-co-hosted-costa_en.

“Today, we are following up on a joint commitment we collectively took two years ago in Paris to finalize the negotiations that had started with the Joint Statement of Buenos Aires in 2017. Since then, several new Members have joined the group and a tremendous amount of work has been done by our negotiators under the valued Chairmanship of Costa Rica. In particular, warm welcome to the Philippines and Bahrain who joined our negotiations most recently.

“We are here today to conclude our negotiations in this JSI and on the Reference Paper with domestic regulation disciplines. This step will allow us to commence our respective domestic procedures required for the certification of our improved schedules of commitments, which will give legal effect to the negotiated disciplines.

“The work on services domestic regulation is of critical importance. It is the first WTO deliverable in the area of trade in services since a very long time. Our additional commitments for domestic regulation will benefit all other WTO Members by giving them the reassurance that we will apply good regulatory and administrative practices also to their service suppliers. 

“Good regulatory practices are crucial for the well-functioning of today’s economy. I believe that the clear rules on transparency and authorisation in the area of services – that were agreed as part of this initiative – will facilitate trade in services significantly. Especially for micro, small and medium-sized enterprises who do not have the same resources and experience to cope with complex processes as their larger competitors.

“The services sector has been hit hard by the pandemic – as other parts of our economy. The adoption and implementation of the disciplines of the reference paper will reduce trade costs for service suppliers substantially and thus help the sector in its recovery. It is a sector where women entrepreneurs often play an important role. The reference paper recognises this role by ensuring non-discrimination between men and women in authorisation processes. This is the first rule of this kind in the WTO.

“Delivering on the WTO services agenda is a long overdue objective we all have. Since Buenos Aires, we have collectively developed a pragmatic approach to negotiations. We have allowed groups of interested Members to advance negotiations on some important issues – through open, inclusive and transparent processes.

“Today, we prove that this plurilateral approach can lead to tangible results. This demonstrates that the Joint Initiative model is a viable one. A large and diverse group of WTO Members can work together towards a common objective, overcome their differences, show flexibility and agree on tangible results that are important for businesses and consumers.

“I believe that this Joint Initiative can be a source of inspiration for work in other areas, allowing interested Members to move ahead while ensuring that the outcome, in its substance and its form, remains supportive of and strengthens the multilateral trading system.”

Since the collapse of the Doha Development talks in 2008, the reality has been that most progress on trade talks have taken place in bilateral, and plurilateral settings. The sole meaningful exception was the completion of the Trade Facilitation Agreement which hopefully will be supplemented by a completion to the Fisheries Subsidies negotiations in the near future. Stating at the WTO’s 11th Ministerial, many WTO Members have started Joint Statement Initiatives to seek progress on important issues facing the trading system.

As noted in earlier posts, India and South Africa (WTO Members who are not participating in any of the Joint Statement Initiatives) have raised objections to the use of JSIs to update rules claiming such approaches are inconsistent with existing WTO requirements. See, e.g., November 17, 2021:  The role of plurilaterals in the WTO’s future, https://currentthoughtsontrade.com/2021/11/17/the-role-of-plurilaterals-in-the-wtos-future/.

The view of the participants in the services domestic regulation JSI is that existing WTO provisions permit the updating of service schedules by Members. The reference paper will apply to those who have participated or who later accept the reference paper. New obligations taken on by the 67 Members are applied by them on an MFN basis to all WTO trading partners.

The Declaration on Services Domestic Regulation and actions to implement it will be an early test of whether the WTO can proceed to update rules through open plurilaterals. While one can expect continued objections from India and South Africa, the path to renewed relevancy for the WTO will almost certainly run through finding room for open plurilaterals.

The APEC 2021 Ministerial Meeting Joint Statement — portion relevant to WTO 12th Ministerial Meeting

· November 10, 2021 · 12th Ministerial Conference, APEC · , , , , , , , , , , , , , , , , , , , , , , , · No Comments

The APEC 2021 Ministerial meeting was held remotely on November 8-9 and resulted in a joint statement which included ambitions of APECs 21 members for the upcoming 12th WTO Ministerial Conference which starts in Geneva at the end of November (November 30-December 3). New Zealand has chaired APEC in 2021. Because the APEC countries include members accounting for 38% of the world’s population, 62% of the world’s GDP and 48% of global trade in 2020 and includes both the United States and China among the 21 territories, what APEC members support for the upcoming WTO ministerial may offer a glimpse of what may be possible in Geneva in the coming weeks. The APEC Ministerial Meeting Joint Statement and a publication on APEC in Numbers can be found here. See 2021 APEC Ministerial Meeting Joint Statement, Wellington, New Zealand, 09 November 2021, https://www.apec.org/meeting-papers/annual-ministerial-meetings/2021/2021-apec-ministerial-meeting; APEC in Charts 2021, https://www.apec.org/docs/default-source/publications/2021/11/apec-in-charts-2021/221_psu_apec-in-charts-2021.pdf?sfvrsn=50537c36_2. APEC members include Australia, Brunei Darussalam, Canada, China, Hong Kong (China), Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russian Federation, Singapore, Chinese Taipei, Thailand, United States, and Viet Nam.

While the Declaration contains coverage of a number of issues, it has a separate section on the World Trade Organization (pages 4-5, paras. 17-22). The six paragraphs from the Joint Statement are copied below.

“World Trade Organization

“17. APEC takes pride in its long history of active support for the rules-based multilateral trading system (MTS), with the WTO at its core. The MTS has been a catalyst for our region’s extraordinary growth and we will work together to improve it. We seek a responsive, relevant, and revitalised WTO. We must support the WTO and its membership to modernise trade rules for the twenty-first century. Together, we will engage constructively and cooperate to ensure the 12th WTO Ministerial Conference (MC12) is a success and delivers concrete results.

“18. As a priority for MC12, we see an opportunity for the WTO to demonstrate that the MTS can continue to help address the human catastrophe of the COVID-19 pandemic and facilitate recovery. We call for pragmatic and effective ministerial outcomes that makes it easier to respond swiftly and effectively to the COVID-19 pandemic and accelerate the recovery. Our priorities include supporting the facilitation of manufacturing, distribution, and supply chains of essential medical goods, including vaccines. We will work proactively and urgently in Geneva to support text-based discussions, including on a temporary waiver of certain intellectual property protections on COVID-19 vaccines.

“19. We reiterate our determination to negotiate effective disciplines on harmful fisheries subsidies in line with SDG 14.6, and call for agreement to a comprehensive and meaningful outcome by MC12 in a few weeks’ time.

“20. Despite its importance for ensuring global food security and sustainable economic development, agriculture is one of the most protected sectors in global trade. We recognise the need for a meaningful outcome on agriculture at MC12, reflecting our collective interests and sensitivities, with a view towards achieving substantial progressive reductions in support and protection, as envisaged in the continuation of the reform process provided in Article 20 of the WTO Agreement on Agriculture and existing mandates.

“21. We recognise the positive role that existing plurilateral negotiations and discussions are playing in progressing outcomes. APEC member participants in the relevant Joint Statement Initiatives (JSIs) call for conclusion of negotiations on services domestic regulation by MC12; and substantial progress by MC12 in the JSIs on e-commerce; micro, small and medium-sized enterprises; and investment facilitation for development. We take note of the efforts by the APEC economies who endorsed the Joint Declaration on Trade and Women’s Economic Empowerment to deliver an ambitious outcome at MC12 that supports the advancement of trade and gender equality.

“22, We continued our frank and constructive discussions regarding improvement to the WTO’s monitoring, negotiating and dispute settlement functions. We continue to support the ongoing and necessary reform work to improve the WTO’s functioning, including the importance of making progress on enhancing transparency to support its monitoring and negotiating functions. We will work together at the WTO and with the wider WTO membership to advance the proper functioning of the WTO’s negotiation and dispute settlement functions, which require addressing longstanding issues. We urge WTO members to seek a shared understanding of the types of reform needed.”

The Joint Statement has some specific items where outcomes are pursued — conclusion of the fisheries subsidies negotiations, some outcomes in the Joint Statement Initiatives (services domestic regulation should be completed; micro, small and medium-sized enterprises is completed; progress on others). As reviewed in yesterday’s post, WTO Members still have a challenging road to achieve a completed fisheries subsidies agreement at the 12th Ministerial. See November 9, 2021:  WTO Fisheries Subsidies Negotiations — a second revised text from November 8 holds out hope for a deal by MC12; how realistic is the hope?, https://currentthoughtsontrade.com/2021/11/09/wto-fisheries-subsidies-negotiations-a-second-revised-text-from-november-8-holds-out-hope-for-a-deal-by-mc12-how-realistic-is-the-hope/. Moreover, India, South Africa and others are raising objections to having any plurilaterals being negotiated included in the WTO which will complicate what comes out of the 12th Ministerial Conference (as opposed to encouraging Members to pursue plurilaterals outside of the WTO). See February 20, 2021:  Will India and South Africa (and others) prevent future relevance of the WTO?, https://currentthoughtsontrade.com/2021/02/20/will-india-and-south-africa-and-others-prevent-future-relevance-of-the-wto/; September 18, 2021: The WTO’s 12th Ministerial Conference in Late November – early December 2021 — the struggle for relevance, https://currentthoughtsontrade.com/2021/09/18/the-wtos-12th-ministerial-conference-in-late-november-early-december-2021-the-struggle-for-relevance/.

The Joint Statement also seeks “pragmatic and effective” outcomes in the health and trade space to address responding to the COVID pandemic. Specifics are lacking although there is support to expanding production and access to vaccines and other medical goods. While supporting text based negotiations in the area, including on a possible temporary waiver of some TRIPS provisions on COVID vaccines, the lack of greater specificity reflects differences in positions of APEC members.

Similarly, while supporting WTO reform in all three areas of WTO activity (monitoring, negotiating and dispute settlement), APEC members have significantly different views on what is needed in these areas. Hence only general language is included in the Joint Statement.

In a prior post, I have opined that recent actions by the U.S. and EU to find ways around the civil aircaraft and steel and aluminum frictions suggests that the U.S. may agree to the start of a process to review the dispute settlement system issues raised by it as part of the 12th Ministerial (a high EU priority) and that the U.S. and EU could coalesce around an outcome acceptable to both in the TRIPS waiver dispute. See November 2, 2021:  What does the U.S.-EU Agreement on steel and aluminum imply for the upcoming 12th WTO Ministerial Conference?, https://currentthoughtsontrade.com/2021/11/02/what-does-the-u-s-eu-agreement-on-steel-and-aluminum-imply-for-the-upcoming-12th-wto-ministerial-conference/.

China has opposed greater transparency obligations and has tied reform of industrial subsidies to looking at agricultural subsidies as well. A recent post of mine reviews the need for better information on subsidies. See October 30, 2021:  WTO reform — distortions to market access and the need for better information, https://currentthoughtsontrade.com/2021/10/30/wto-reform-distortions-to-market-access-and-the-need-for-better-information/. Despite differences of view on some issues among major Members, it is not out of the question that a reform program will cover an examination of all three functions going forward.

On agriculture, there is a shared view for a need for results at the WTO 12th Ministerial and reflects on the fact that Article 20 of the WTO Agreement on Agriculture calls for periodic rounds of liberalization. However, the language of the Joint Statement doesn’t specify the areas where agreement is possible by the 12th Ministerial, reflecting different views among APEC members.

Nothing in the APEC Joint Statement addressed what, if anything should be agreed at the 12th WTO Ministerial on the climate crisis and what role trade can play in addressing the crisis. This omission is unfortunate but likely reflects large differences in views within APEC members on the topic. As I reviewed in a recent post, much more is needed but unlikely to come from the WTO and its members. See November 4, 2021:  The WTO and the environment — will the 2020s be different in terms of trade policies that are environmentally supportive?, https://currentthoughtsontrade.com/2021/11/04/the-wto-and-the-environment-will-the-2020s-be-different-in-terms-of-trade-policies-that-are-environmentally-supportive/.

Conclusion

The APEC 2021 Ministerial Meeting Joint Statement, being released three weeks before the start of the WTO’s 12th Ministerial Conference is a positive statement of support for the multilateral trading system. Coming from a group of WTO Members accounting for nearly 50% of global trade, it is a useful guide for topics these countries and territories will be pursuing in Geneva. Other group statements have been released as well as individual country or group objectives. But even within the APEC group of countries, large differences exist on outcomes of interest. With the exception of a possible conclusion to the fisheries subsidies negotiations and conclusions on several Joint Statement Initiatives, there may be only limited positive outcomes. There may be some limited agreement on the broad topic of health and trade and some agreement on topics for future negotiation. There may also be at least some provisions in a declaration dealing with the climate crisis and the important role trade can play in addressing the crisis.

Such a limited set of outcomes will likely be viewed as a success for an organization hamstrung by Members with no common vision for the role of the organization, with large differences in development levels, a cumbersome governance system and growing divergence on whether the organization can support global trade where market rules are not the required framework. More is needed for a truly relevant WTO and for a sustainable global trading system. The world is unlikely to achieve meaningful reform at the WTO in the coming decade. Progress, if any, will likely be slow and piecemeal.

WTO reduces transparency of Trade Policy Reviews — what is the possible justification?

· October 20, 2021 · Trade Policy Reviews · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

Through September 2021, when a country went through a Trade Policy Review, a large amount of material was made available to the public at the time of the TPR meeting with additional information (minutes, questions and answers, corrections to Secretariat report and/or government report) released a number of months later. The WTO press releases at the time of the TPR meeting were similar. The one for Singapore from 22 and 24 September 2021 is typical.

As can be seen from the press release, the public could access the full report of the Secretariat, the full report of the Government of Singapore, the concluding comments of the Chairperson as well as an Executive Summary of the Secretariat report at the time of the two day meeting to review the reports. Moreover, minutes from the meeting were available to the public typically about six weeks after the meeting as were the written questions and written answers.

Beginning in October, the press release has been modified and far less information is made available immediately to the public. There have been two TPRs so far in October, the Republic of Korea (13 and 15 October) and China (20 and 22 October). A TPR of the Russian Federation is scheduled for next week.

The WTO press release for the Republic of Korea is copied below. The current one for China is similar.

All that is made available to the public at the time of the meeting is a short executive summary of the Secretariat report and the concluding remarks of the Chairperson. No reference is made to how to access the full report of the Secretariat or the Government (here Republic of Korea), nor is there an indication as to when minutes or written questions and written answers will be available.

There is nothing on the WTO webpage which describes why so little information is being provided beginning this month on new Trade Policy Reviews. For the public, the drastic reduction in transparency makes the WTO operations even less understandable.

If the WTO will be releasing all of the documents it has historically but with significant time delays on all documents, what is the justification? For 25 years, TPRs have been conducted with the type of information released that gave the public a good understanding of the Secretariat’s and the government’s review of its trade policy. That understanding has been timely, consistent with the meeting and supplemented within several months with minutes and the written questions and answers.

If the WTO is not intending on releasing all of the documents it has historically released, what is the possible justification?

China, which is going through a Trade Policy Review this week, also went through a TPR in 2018. In 2018, the Secretariat Report released to the public at the time of the TPR meeting was 193 pages (along with a summary of 6 pages). See WT/TPR/S/375. China’s Report on its trade policy was 23 pages. See WT/TPR/G/375. These documents are dated 6 June 2018. A revision to the Secretariat Report is dated 14 September 2018 and was also 193 pages ( WT/TPR/S/375/Rev.1). The Concluding remarks by the Chairperson are contained in a separate press release from the WTO at the time of the TPR meeting but linked from the main notice of the TPR. See WTO news, Trade Policy Review: China, 11 and 13 July 2018, https://www.wto.org/english/tratop_e/tpr_e/tp475_e.htm linking to the concluding remarks of the Chairperson at https://www.wto.org/english/tratop_e/tpr_e/tp475_crc_e.htm. The minutes of the meeting are contained in WT/TPR/M/375, 21 November 20218 and are 98 pages in length with statements from 66 Members (two on behalf of larger groups). The written questions and answers are contained in WT/TPR/M/375/Add.1, dated 1 February 2019 and being 729 pages in length. The WTO Members who submitted questions (including follow-up questions) are shown on pages 2-3 of the document.

Because the current TPR on China (20 and 22 October) does not provide either of the full reports (Secretariat and Government) and because there is no indication of when minutes or written questions and answers will be available, there is certainly delayed access and potentially denial of access of the same type of information on China (or any other country) that was been released in the past. This should be viewed as unacceptable by the WTO Secretariat and WTO Members and certainly should be so viewed by the public.

Conclusion

What is available to the public from a Trade Policy Review is critical for an understanding of concerns raised by WTO Members about any other Member’s trade policy as well as the level and openness of the response from the Member being reviewed. The Secretariat’s report is an important factual analysis of developments in the Member being reviewed. The recent curtailment of access to the full Secretariat Report and the full Government Report greatly harms transparency and the ability of the public to understand developments within WTO Members in a timely manner. Should the WTO cease to release any of the information heretofore available to the public in current and future TPRs, the WTO will be further damaging the public’s perception of the WTO and will be further retreating from openness and transparency towards the public..

The Indo-Pacific region — increased interest in the CPTPP by major trading nations; implications for international trade; U.S. policy towards China

· October 4, 2021 · CPTPP applications for membership, U.S. trade policy towards China, Uncategorized · , , , , , , , , , , , , , , , , , , , · No Comments

The Trans-Pacific Partnership was originally pursued by the United States to improve trade relations with many countries in the Pacific region and as a counter to rising Chinese influence. See, e.g., New York Times, U.S. Allies See Trans-Pacific Partnership as a Check on China, October 5, 2015, https://www.nytimes.com/2015/10/07/world/asia/trans-pacific-partnership-china-australia.html.

After President Trump withdrew the United States from the Agreement at the beginning of his term in 2017, Japan pushed to conclude the agreement among the remaining eleven countries. The revised agreement, the Comprehensive and Progressive Agreement for Trans-Pacific
Partnership, was signed in Santiago, Chile on 8 March 2018 and took effect 30 December 2018, with 8 of the eleven countries who signed now having ratified — Mexico, Japan, Singapore, New Zealand, Canada, Australia, Vietnam and Peru. That leaves Brunei, Chile and Malaysia as signatories who have yet to ratify the agreement.

With Brexit completed, the United Kingdom was the first non-CPTPP country to apply for membership. Its application filed on 1 February 2021 was accepted on 2 June 2021 with the first negotiations held on 28 September 2021. See Government of Canada, Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) – Joint Ministerial Statement on the occasion of the Fourth Commission Meeting, 2 June 2021, https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/cptpp-ptpgp/cptpp_meeting_four-ptpgp_declaration_quatre.aspx?lang=eng; Government of the United Kingdom, UK kickstarts talks to join £9 trillion global trade bloc, 28 September 2021, https://www.gov.uk/government/news/uk-kickstarts-talks-to-join-9-trillion-global-trade-bloc. The U.K.’s application is also an extension of the range of countries potentially eligible for membership since the U.K. is not a Pacific bordering country.

In September, both China and Taiwan applied for membership. See, e.g., Ministry of Commerce, People’s Republic of China, China officially applies to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), September 18, 2021, http://english.mofcom.gov.cn/article/newsrelease/significantnews/202109/20210903201113.shtml; Nikkei Asia, Taiwan submits bid to join CPTPP trade pact, September 23, 2021, https://asia.nikkei.com/Economy/Trade/Taiwan-submits-bid-to-join-CPTPP-trade-pact; Wall Street Journal, China Seeks to Join Pacific Trade Pact After U.S. Forms New Security Alliance, September 16, 2021, https://www.wsj.com/articles/china-seeks-to-join-pacific-trade-pact-after-u-s-forms-new-security-alliance-11631813201 .

China’s application, while facing hurdles because of challenges to complying with provisions on state owned enterprises, data flows and other issues, is also a major challenge to efforts of the U.S. to have a more important role in the Indo-Pacific region. Because China would more than double the size of the CPTPP if admitted and because of heightened tensions in the Indo-Pacific area in recent years, there has been a great deal written on China’s application.

Some articles have argued for CPTPP countries rejecting China’s application or the likely failure of China to join for substantive reasons. See CNBC, China will likely fail in its CPTPP bid — but it’s a ‘smart’ move against the U.S., say analysts, September 27, 2021, https://www.cnbc.com/2021/09/27/analysts-on-chinas-bid-to-join-cptpp-strategic-competition-with-us.html (“Beijing needs the approval from all 11 CPTPP signatories to join CPTPP, and it may not succeed given its strained relationships with some member countries, said analysts.”); Bloomberg, Editorial Board, CPTPP Trade Block Shouldn’t Welcome China, September 22, 2021, https://www.bloomberg.com/opinion/articles/2021-09-22/cptpp-trade-bloc-shouldn-t-welcome-china.

Others have noted the multiyear effort by China to study the TPP and resulting CPTPP and ongoing efforts to gain support from individual CPTPP members for their application. See Nikkei Asia, Analysis: China’s TPP bid follows carefully scripted 300-day plan, Beijing’s move aims to thwart possible U.S. return to pact, pressure Taiwan, September 23, 2021, https://asia.nikkei.com/Editor-s-Picks/China-up-close/Analysis-China-s-TPP-bid-follows-carefully-scripted-300-day-plan; Brookings, China moves to join the CPTPP, but don’t expect a fast pass, September 23, 2021, https://www.brookings.edu/blog/order-from-chaos/2021/09/23/china-moves-to-join-the-cptpp-but-dont-expect-a-fast-pass/; Foreign Policy, Wendy Cutler, China Wants to Join the Trade Pact Once Designed to Counter It, September 21, 2021, https://foreignpolicy.com/2021/09/21/china-cptpp-trade-agreement/.

Others have focused on the importance of the U.S. reengaging economically in the region or risking losing to China. For example, Wendy Cutler, a former USTR lead negotiator for the Trans-Pacific Partnership, is the Executive Vice President of the Asia Society Policy Institute and has urged the last and current Administrations to stay economically engaged in Asia. See ASPI, Report, Reengaging the Asia-Pacific on Trade: A TPP Roadmap for the Next U.S. Administration, September 2020, https://asiasociety.org/sites/default/files/2020-09/A%20TPP%20Roadmap%20for%20the%20Next%20U.S.%20Administration.pdf. See also Nikkei Asia, Comment, Why U.S. membership in CPTPP makes more sense than ever, Washington risks being locked out and ceding Indo-Pacific influence to China, September 24, 2021, https://asia.nikkei.com/Spotlight/Comment/Why-U.S.-membership-in-CPTPP-makes-more-sense-than-ever; PIIE, Jeffrey Schott, China’s CPTPP bid puts Biden on the spot, September 23, 2021, https://www.piie.com/blogs/trade-and-investment-policy-watch/chinas-cptpp-bid-puts-biden-spot; Inside U.S. Trade’s World Trade Online, Citing China’s CPTPP bid, Carper and Cornyn urge U.S.
trade leadership, September 20, 2021, https://insidetrade.com/daily-news/citing-china%E2%80%99s-cptpp-bid-carper-and-cornyn-urge-us-trade-leadership; Wall Street Journal, Opinion/Comment by Tim Groser, The U.S. Has a Way Back on Pacific Trade, And if Washington doesn’t take it, the Indo-Pacific would likely become China’s for the taking, September 29, 2021, https://www.wsj.com/articles/america-tpp-china-japan-indo-pacific-trade-influence-11632931688. New Zealand’s Former Trade and Environment Minister Tim Groser’s piece is particularly interesting and is copied below.

“It was February 2017 and President Trump’s first address to a joint session of Congress. I was on the floor of the U.S. House as a guest of a pro-trade Republican congressman. As the president announced the U.S. withdrawal from the Trans-Pacific Partnership, I was thinking about a conversation I’d had with a particularly astute Asian ambassador. He’d suggested to me that if a book on the decline of American influence in Asia and the Indo-Pacific were ever written—and he hoped it never would be—its first chapter would be an account of the withdrawal of the U.S. from TPP.

“Largely because of Japan’s courageous decision to proceed without the U.S., TPP survived. With some changes to a few of its provisions and a new moniker—Comprehensive and Progressive TPP, or CPTPP—it went ahead. Nothing would have been possible if Japan, by far the dominant remaining economy in the agreement, had decided differently.

“China’s decision this month to apply for CPTPP membership should be a sharp reminder to Republicans and Democrats alike that if the U.S. is serious about competing with China in the Indo-Pacific it must confront a central reality: Having withdrawn from the TPP, the U.S. doesn’t yet have a trade strategy to back up its military posture in the region. China is the principal trading partner of many countries in the Indo-Pacific. The size of China’s economy, as well as its military and geostrategic ambition, means that Beijing will be at the center of the debate over every regional and global issue in the 21st century, from climate change to trade. Its ability to influence the outcomes of those issues will be determined by the degree—and effectiveness—of U.S.

“We don’t yet know where the new policy script that the Chinese Communist Party is now writing will lead the world’s second-largest economy. When Deng Xiaoping 40 years ago shifted China toward growth and an open economy with his slogan ‘to be rich is glorious,’ it was the beginning of the largest poverty-reduction program in human history. Hundreds of millions of Chinese were lifted out of destitution, and huge opportunities opened up for China’s trading partners. Things have been moving backward lately, in the direction of greater centralization and state control. One could even mount an elegant argument that China itself needs balance from the full engagement of the U.S. in the region.

“The Chinese people have benefited enormously, not from ‘wolf warrior’ diplomacy, but from Beijing’s positive engagement with the U.S.-designed liberal economic architecture. China’s future choices and trade strategies will be fundamentally different if they aren’t constrained by a muscular and successful U.S. economic strategy in the Indo-Pacific.

“Intriguingly, the U.S. is putting in place the elements of regional re-engagement. No foreign policy (or trade policy) is politically sustainable without a solid domestic constituency behind it. Trade has long been a tortured issue in American politics, particularly for Democrats, because economic change creates anxiety for the middle class. When people are under severe economic pressure, trade is always a potential scapegoat.

“In September 2020, the Carnegie Foundation for International Peace published a white paper titled ‘Making U.S. Foreign Policy Work Better for the Middle Class.’ Among the authors was Jake Sullivan, now President Biden’s national security adviser. The White House approach to assuaging traditional Democratic fears of trade-induced economic change seems clear: Shore up domestic policy before moving forward aggressively on any trade deals.

“The recent establishment of the Aukus security arrangement among the U.S., the U.K. and Australia can leave no doubt that the Biden administration views the Indo-Pacific as the most important theater of strategic competition with China. Kurt Campbell, the National Security Council’s coordinator for the Indo-Pacific, has made clear that U.S. strategy in the region must extend beyond a military plan to protect American allies from China’s expansionist ambitions. It needs an economic component.

“In my view, the U.S. is unlikely to rectify the mistake of leaving TPP by asking to join CPTPP. Mr. Biden has said he would oppose joining the original deal without a renegotiation. That alone would make it difficult for the U.S. to waltz back in. But it’s also true that the strategic environment has evolved. Large parts of TPP, such as its provisions on trade and the environment, remain relevant, but the past five years have sharpened the policy world’s understanding of such key issues as digital trade and state-owned enterprises. Plus, there is a new kid on the TPP block: the U.K. The world’s sixth-largest economy, a major intelligence and defense partner of the U.S., wants to join the club. The U.K.’s post-Brexit desire to expand its horizons beyond geographical Europe was the political subtext of the trade deal announced this summer between London and Canberra.

“Whatever next year’s congressional elections bring, active foreign-policy engagement always requires the involvement of both American political parties. The U.S.-Mexico-Canada agreement, updating the North American Free Trade Agreement, passed easily with bipartisan support during the Trump administration. If the U.S. recommits to TPP, it should be rechristened the Indo-Pacific Economic Partnership Agreement. A new name might make it an easier sell politically.

“The regional stakes were high even before China’s aggressive move on Hong Kong, its saber-rattling in Taiwan, and its ramped-up trade war with Australia. We now need to hear American leaders on both sides of the aisle talking about re-engaging in the region, not only on the political and military levels, but on the trade and economic architecture that will shape economic relations over the next decade and beyond. Only then will my friend the astute Asian ambassador be able to rest easy, secure in the knowledge that the decline of American influence in the Indo-Pacific is a book that will never be written.

“Mr. Groser served as New Zealand’s trade minister (2008–15) and ambassador to the U.S. (2016–18).“

The interest in the CPTPP will be heightened for other countries who are not members or who are already considering joining CPTPP and will be the subject of programs to explore the politics and business implications. See, e.g., Inside U.S. Trade’s World Trade Online, Eyes on Asia: Thailand re-evaluates CPTPP, Peru brings pact into force, September 22, 2021, https://insidetrade.com/trade/eyes-asia-thailand-re-evaluates-cptpp-peru-brings-pact-force; Business Korea, South Korea Planning to Join CPTPP, January 12, 2021, http://www.businesskorea.co.kr/news/articleView.html?idxno=58283; Nikkei Asia, Philippines explores joining TPP to expand free trade network, April 2, 2021, https://asia.nikkei.com/Economy/Trade/Philippines-explores-joining-TPP-to-expand-free-trade-network; The Global Business Dialogue, Inc., CPTPP: PEFORMANCE, PROMISE AND OUTLOOK, October 5 and 7, 2021, https://www.gbdinc.org/.

Likely U.S. Trade Approach Short Term

Despite the groups calling for the U.S. to reengage with the CPTPP countries and the obvious growing importance of the CPTPP for Indo-Pacific trade relations, most analysts believe the United States will not seek to either renegotiate the CPTPP or to join the CPTPP as it is in the near future. While the U.S. has free trade agreements with many of the CPTPP countries (Canada, Mexico, Australia, Singapore, Peru and Chile), with the exception of Canada and Mexico who are party to the USMCA, other FTAs are older and not as comprehensive or addressing all the issues as the CPTPP.

The United States under the Trump Administration and now under the Biden Administration has sought selective trade improvements with some Indo-Pacific countries, including Japan (Phase I deal under the Trump Administration), resolution of 301 disputes on currency and lumber with Vietnam (resolution by the Biden Administration) and bilateral activity with other Asian countries including India, Japan and Australia as members of the Quad. See, e.g., White House Briefing Room, U.S.-India Joint Leaders’ Statement: A Partnership for Global Good, September 24, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/24/u-s-india-joint-leaders-statement-a-partnership-for-global-good/; White House Briefing Room, Joint Statement from Quad Leaders, September 24, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/24/joint-statement-from-quad-leaders/; White House Briefing Room, Quad Principles on Technology Design, Development, Governance, and Use, September 24, 2021, https://www.whitehouse.gov/briefing-room/statements-releases/2021/09/24/quad-principles-on-technology-design-development-governance-and-use/. These types of initiatives include trade related elements such as supply chain resiliency in areas like semiconductors and pharmaceuticals and other medical products needed to address the COVID-19 pandemic as well as on technical barriers to trade issues flowing from technology developments. And, of course, the U.S. engages with other countries in the region even if there are no specific trade negotiations. See, e.g., USTR, Readout Of Ambassador Katherine Tai’s Meeting with ASEAN Economic Ministers, September 14, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/september/readout-ambassador-katherine-tais-meeting-asean-economic-ministers.

But these efforts to date don’t ensure U.S. access to many of these markets on the best possible terms for some products and services or ensure the highest standards of the agreements going forward.

China may or may not be accepted into the CPTPP now that it has applied or may decide that the requirements won’t work for its vision of its economy. While the U.S. is seeking cooperation from trading partners at the WTO and in various alliances to deal with some of the major challenges posed by China’s failure to convert its economy to a market economy and to address some of the coercion and failures to comply with bilateral, plurilateral and multilateral commitments, a strong trade agenda and participating in the rule development within important regional groupings would obviously improve the likelihood of improved balance in international trade relations.

That said, the Biden Administration has been reviewing its trade relationship with China, looking to develop a whole of government approach to China.

USTR’s October 4, 2021 articulation of U.S. approach to trade with China

USTR had signaled last week that Amb. Tai would be making a major speech today. The speech at the Center for Strategic and International Studies was at 10 a.m. (ET) this morning. See Office of the United States Trade Representative, Remarks As Prepared for Delivery of Ambassador Katherine Tai Outlining the Biden-Harris Administration’s “New Approach to the U.S.-China Trade Relationship,” October 4, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/october/remarks-prepared-delivery-ambassador-katherine-tai-outlining-biden-harris-administrations-new. The Administration also released a fact sheet on the Administration’s policy. See Office of the United States Trade Representative, Fact Sheet: The Biden-Harris Administration’s New Approach to the U.S. – China Trade Relationship, October 4, 2021, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/october/fact-sheet-biden-harris-administrations-new-approach-us-china-trade-relationship. The fact sheet lists four “initial steps” the U.S. is taking. Those steps as described in the fact sheet are reproduced below.

“Today, we are announcing the initial steps we will take to re-align our trade policies towards the PRC around OUR priorities: 

“•    First, we will discuss with China its performance under the Phase One Agreement. China made commitments that do benefit certain American industries, including agriculture that we must enforce.  President Biden will continue to promote our economic interests – and build confidence for American industry.

“•    Second, while pursuing Phase One enforcement, we will restart our domestic tariff exclusions process to mitigate the effects of certain Section 301 tariffs that have not generated any strategic benefits and raised costs on Americans. We will ensure current Section 301 tariffs align appropriately with our economic priorities like boosting American workers’ wages and job opportunities, securing the resilience of critical supply chains, sustaining our technological edge, and protecting our national security interests. 

“•    Third, we continue to have serious concerns with the PRC that were not addressed in the Phase One deal, specifically related to its state-centered and non-market trade practices including Beijing’s non-market policies and practices that distort competition by propping up state-owned enterprises, limiting market access, and other coercive and predatory practices in trade and technology. 

“Even as we work to enforce the terms of Phase One, we will raise our broader concerns with Beijing’s non-market policies and practices like abuse of state-owned enterprises, anti-competitive behavior and subsidies, the theft of American intellectual property directly and in coordination with our allies and partners. We will defend American economic interests using the full range of tools we have and by developing new tools as needed. 

“•    And lastly, we know that we cannot do it alone. We will continue consulting and coordinating with allies and partners who share our strong interest in ensuring that the terms of competition are fair, work collectively to set the rules of the road for trade and technology in the 21st century, and strengthen the global market for our workers and businesses. 

“This work with our allies and partners is already bearing fruit, as evidenced by efforts at the G7, the US-EU Summit, the Quad, the OECD, and the TTC. The Boeing-Airbus deal struck in June of this year is just one example of how this commitment to work with our allies creates more opportunity to sell American products. We will accelerate this progress and look forward to continuing the conversations with our likeminded allies and partners about the impact the PRC’s non-market practices have on them, and how we can work together to find solutions.”

China’s Phase 1 commitments have been met is some areas but widely missed in terms of expanded purchases, particularly on manufactured goods and energy. China’s performance on agricultural goods has been significantly better and close to commitments. There are also large volumes of U.S. exports that are not covered by the Phase I Agreement where China has sharply reduced purchases in 202-2021 despite China’s economic performance. See PIIE, US-China phase one tracker: China’s purchases of US goods, As of August 2021, September 27, 2021, https://www.piie.com/research/piie-charts/us-china-phase-one-tracker-chinas-purchases-us-goods. Thus, it will be interesting to see if outreach to China on the need for ramped up improvements will have any effect in fact.

American businesses have long complained about the tariffs on hundreds of billions of dollars of imports from China that resulted from the 301 investigation on China’s IP and other practices. Businesses viewed USTR’s exclusion process as an ineffective system for seeking exclusions and felt the process ended up penalizing U.S. companies. Congress has applied pressure on the Biden Administration (as it did on the Trump Administration) to restart and improve the exclusion process. Former USTR Lighthizer criticized some of the legislative efforts to weaken Section 301, require a revised exclusion process and renew certain tariff waiver programs that he viewed as significantly advantaging China. See New York Times, Opinion/Guest Essay (Robert Lighthizer), America Shouldn’t Compete Against China With One Arm Tied Behind Its Back, July 27, 2021, https://www.nytimes.com/2021/07/27/opinion/us-china-trade-tariffs.html. While the Biden team identifies actions which could reduce the loss of effectiveness of the 301 tariffs on China, time will tell how well step two of the new approach works in fact.

Press reports indicate that the U.S. will be raising the host of trade problems not addressed in the Phase I Agreement with China but will not be engaged in a Phase II Agreement negotiation. See Inside U.S. Trade’s World Trade Online, U.S. to renew China talks, restart tariff product exclusions, October 4, 2021, https://insidetrade.com/daily-news/us-renew-china-talks-restart-tariff-product-exclusions (“But the administration is not looking to negotiate a phase-two deal, senior administration officials told reporters on Sunday. ‘We’ll focus on phase-one engagement, we will raise concerns on industrial policies, but we are not seeking a phase-two negotiation,’ one said.”).

That said, the U.S. has been pursuing reforms at the WTO on industrial subsidies and other matters along with some major trading partners (e.g., Japan and the EU on industrial subsidies). While reforms are not likely at the WTO any time soon on industrial subsidies, the U.S. is attempting to apply pressure in a number of fora on China’s policies. Thus, the U.S. is actively pursuing alliances to achieve reforms in China’s policies and distortive practices.

In short, today’s announced trade policy to address China appears to be less confrontational than the actions of the Trump Administration while maintaining for the time being the tariffs that were added following the 301 investigation in 2017-2018. While working to get better compliance with the Phase I Agreement is a positive, many provisions were adopted by China based on prior Administration statements. It will be important to know if these granular provisions once adopted have actually been implemented and whether U.S. trade has benefitted as a result. While the purchase commitments other than agriculture have been widely missed (including some commitments by sectors with heavy state ownership, such as energy), there are specific commitments for 17 goods categories only for 2020 and 2021 and some language about continued growth in the future, it is not clear how aggressive the U.S. will be in pursuing compliance in the last three months of 2021 and moving forward. The same is true in services where the pandemic has undoubtedly contributed to declines in U.S. services exports and the dismal performance compared to commitments. It is also not clear if the U.S. will address the sharp contraction of U.S. exports of products not covered by the Phase I purchase commitments. Such contractions in a period of economic growth by China seem likely driven by Chinese action whether formal or informal to reduce U.S. exports regardless of China’s overall growth.

The serious problems China’s economic model and policies are causing the U.S. and other market economies will be difficult to correct simply through discussions. The Biden’s Administration’s focus on domestic policies and reinvesting in infrastructure, R&D and workers is certainly long overdue (if Congress passes funding), The Biden Administration clearly needs China engaged to address the climate crisis and a number of other global issues. This reality may have contributed to the level of action envisioned on trade relations with China. But today’s announced trade policy towards China seems uninspired and unlikely to make a significant difference in rebalancing trade relations.

Coupled with U.S. reluctance to identify a trade policy agenda that can be used with trading partners to generate new agreements and revise existing agreements, the U.S. approach to China raises the specter of a lost opportunity. Let’s hope that concern proves incorrect.

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

· May 6, 2021 · COVID-19 vaccinations, Waiver of TRIPS Obligations · , , , , , , , , , , , , , · No Comments

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

· March 28, 2021 · Dispute Settlement Body, U.S. objection to Venezuela request to a panel on U.S. sanctions · , , , , , , , · No Comments

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

· March 25, 2021 · COVID-19 vaccinations · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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

· February 3, 2021 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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

· January 24, 2021 · forced labor and child labor · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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.

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

· November 29, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · 2 Comments

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.

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

· October 26, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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.

The effect of COVID-19 on the operation of WTO dispute settlement panels — Australia and others raise at the September 28 Dispute Settlement Body meeting

· October 14, 2020 · COVID-19, WTO Dispute Settlement · , , , , , , , , , , , , , , , , , , , , · No Comments

While most attention on the WTO’s dispute settlement system has focused on the operation of the Appellate Body, the timeliness of disputes is often driven by the actions of the panel. Under Article 12 of the Dispute Settlement Understanding (DSU), panels are to render their reports within six months (3 months in urgent matters) and no longer than nine months after the panel is composed. Few if any panels in recent years have remotely come close to meeting a nine month report deadline.

With the COVID-19 pandemic and the resulting limitations on in person meetings at the WTO and travel restrictions, the panel process has been further complicated. At the recent Dispute Settlement Body (DSB) meeting of September 28, Australia had put on the agenda the issue of “COVID-19 and dispute settlement”. Agenda item 9 of Proposed Agenda for the 28 September 2020 Dispute Settlement Body meeting, WT/DSB/W/670.

The subsequent press release on the DSB meeting contained the following description of the discussion of Australia’s issue on COVID-19 and dispute settlement.

“Statement by Australia on COVID-19 and dispute settlement

“On behalf of 14 members (Australia; Brazil; Canada; Ecuador; Guatemala; Hong Kong, China; Mexico; New Zealand; Norway; Peru; Singapore; Switzerland; Ukraine; and the United Kingdom), Australia made a statement expressing concern about delays in dispute settlement proceedings resulting from the COVID-19 pandemic.

“While it is encouraging that DSB meetings have been able to resume at the WTO, ongoing restrictions affecting international travel and immigration place in question the feasibility of physical participation of panelists and capital-based delegates at meetings in Geneva into the future, Australia noted. During 2020, various governments, private sector organizations, and domestic and international adjudicative bodies worldwide have adapted their usual ways of working to continue operating in these difficult conditions; WTO members must ensure the dispute settlement system does the same.

“Australia urged panels to consider, in consultation with parties, flexible, alternative arrangements to ensure dispute proceedings can continue to progress in a timely manner despite the challenge of current restrictions. Australia recalled that Article 12.1 of the WTO’s Dispute Settlement Understanding (DSU) affords panels discretion in the working procedures they adopt in individual disputes, and that panels, after consulting in parties, may determine alternative arrangements that would best serve the satisfactory settlement of the matters. Some panels have already adjusted their procedures to hold substantive meetings virtually through video conferencing technology; Australia welcomed these developments but, to ensure the equitable operation of the dispute settlement system, WTO members must find solutions to enable all current and future matters to move forward in one way or another.

“Several delegations took the floor to comment. Japan said that while virtual meetings are an option, face to face meetings were preferable, and that each panel should consult with parties on how to proceed in order to strike an appropriate balance between prompt settlement of disputes and protection of due process. India said oral hearings were an intrinsic aspect of due process rights guaranteed by the DSU and that panels cannot truncate these rights without the agreement of the parties in a dispute.

“The United States encouraged each panel to consult with the parties on how to proceed, bearing in mind the views of the parties and the relevant provisions of the DSU. China said it was fundamental to provide certainty in dispute settlement in order to avoid any undue delay; it noted some panels have adopted flexible procedures as a response. The EU said that the discretion of panels is not completely unfettered and that they must ensure the prompt settlement of disputes, a principle that was valid for all disputes. Both South Africa and Nigeria (for the African Group) noted the asymmetrical impact of the COVID-19 pandemic on developing country members.”

WTO Dispute Settlement, 28 September 2020, Panel established to review China’s compliance with farm subsidy ruling, https://www.wto.org/english/news_e/news20_e/dsb_28sep20_e.htm.

The fact that Australia and others raised the issue at the DSB is certainly welcome, although the comments of Members at the DSB meeting indicates that there are both an array of problems facing different Members and arguably mixed motives for some in concerns about alternative approaches to in person meetings.

First, panels have regularly used the existence of the pandemic as a justification for a lengthy delay in the likely release of a panel report. See, e.g., India – Additional Duties on Certain Products from the United States, WT/DS585/4 (4 June 2020)(panel composed on 7 January 2020, because of pandemic, report to parties not before the second quarter of 2021); India – Measures Concerning Sugar and Sugarcane, WT/DS579/9; WT/DS580/9; WT/DS581/10 (29 April 2020)(complainants are Guatemala, Australia and Brazil)(panels composed on 28 October 2019, report to the parties not before the second quarter of 2021).

Thus, the issue of delay caused by the pandemic is an important one to address to maintain the timely operation of panels. While many developing countries may have greater challenges in terms of internal infrastructure for alternative means of handling disputes remotely, the claim of due process concerns at least for some Members is suspect particularly if the functioning of administrative and judicial activities in-country are being handled remotely/virtually as is true in many countries. For example, in the United States, arguments at federal courts are handled remotely, including at the highest court in the land. No Member should be allowed to delay panel proceedings on due process grounds where their own administrative and court proceedings are handled remotely during the pandemic. The Secretariat should seek transparency from Members on how their agencies and courts are handling matters during the pandemic.

Certainly, WTO Members should identify challenges they face to being able to engage in remote/virtual hearings if in person events are not possible. Where problems exist, the WTO Secretariat in conjunction with other organizations should look to see what technical assistance can be provided to permit active participation. Similarly, if issues affect the ability of panelists to handle matters remotely, there should be a review of options that may exist to facilitate panelists ability to participate. Again, the Secretariat should seek information from Members on challenges they face in participating in dispute proceedings and should have information on potential panelists on the same types of issues.

While the basic premises that panels should consult with parties is clearly the correct path to follow (contrary to the current practice of many panels and that reviewed in detail about the Appellate Body), there is the question of what happens when there is a difference among the parties as to how to proceed. The good offices of the Director-General can be used to possibly bridge the differences. Delay should only be permitted when the concerns of the party objecting to proceeding cannot be reasonably overcome.

It will be interesting to see if Members press for a prompt resolution to the concerns raised at the last DSB meeting, or if they simply let the problems continue to fester and delay the proper operation of panels.

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

· October 11, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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

· September 27, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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.

· September 13, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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

· August 30, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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

· August 29, 2020 · Appellate Body reform, WTO Dispute Settlement · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

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.

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

· August 16, 2020 · COVID-19 · , , , , , , , , , , , , , , , , , , , , , , · No Comments

Much of the world recorded sharp contractions in GDP during the second quarter as countries restricted travel, issued mandatory stay at home orders and took other steps to try to control the spread of the COVID-19 pandemic. Many countries have been easing restrictions in the last several months that were imposed typically in March. The hoped for revival of the global economy is being slowed by the continued high incidence of new COVID-19 cases, the resurgence of cases (albeit so far at low levels) following reopening actions in many of the countries who had gotten control of the virus. In a number of countries, schools are reopening presenting additional challenges for governments in trying to control the spread of the COVID-19 virus. News reports continue to be promising that one or more vaccines may be approved by the end of 2020 or early 2021, and the Russian Federation has gone into production of a vaccine which reportedly has not undergone a phase three trial.

One question of potential importance in mid-August is has the world gotten to the peak of the number of new cases during the last two weeks or will the number of new cases resume an upward trajectory in the coming weeks?

The world has seen a rapid growth of new cases during the March – July period. As recently as the two week period of May 11-May 24, the total new cases globally in the two week period was 1.28 million. The next two weeks (May 25-June 7) showed new cases of 1.57 million. June 8-June 21 recorded 1.93 million new cases; June 22 – July 5 added 2.46 million. July 6-July 19 added 3.02 million new cases. July 20-August 2 added 3.57 million new cases. The data for the last two weeks, August 3-16 added 3.62 million new cases. So the rate of growth is slowing. While the number of new cases in the most recent two weeks was nearly three times as many as recorded in mid-May, in the last two weeks, the growth was only 1.4%.

The United States for the first time since early June has seen the number of new cases fall from the prior two weeks, although the new cases in August 3-16 were still the second largest (740,721) after only India (838,959) and remain two and a half times as high as the May 25-June 7 period (297, 391) and were 81.5% higher than the original peak figure (409,102) in the latter part of April. Complicating the picture going forward for the United States are the early problems with school reopenings in certain states with most school districts working to open in person, remotely or in some combination in the coming weeks. The U.S. also has a very high incidence of affirmative tests in large parts of the country which is problematic particularly as testing (while large in number) continues to have problems in timeliness of results. Despite the need for even larger numbers of tests (that are timely), the number of tests has been declining in the U.S. despite the continued high level of new cases on a daily basis. In addition, the U.S. continues to suffer from mixed messages from government officials on actions needed to control the virus, and from a general fatigue by large parts of the public with the efforts to minimize the spread. This past week’s Sturgis motorcycle rally, where some 250,000 bikers from around the country were expected to attend, is an example of a huge social gathering where limited safety precautions have been seen at least at some events with unknown consequences for the spread of the virus not just in South Dakota (Sturgis is a small town in South Dakota) but across the United States.

Brazil was also slightly lower in the last two weeks (609,219) than the preceding two-week period (633,017) but remains a major source of new cases. South Africa showed a significant decline from 152,411 new cases in the July 20-August 2 period to 80,363 new cases in the last two weeks.

India has taken over the top spot for most new cases in the last two weeks, 838,959, more than 160,000 higher than the prior two weeks (673,108).

There have been upticks in the number of new cases in a number of developed countries reflecting presumably the effects of reopening the economy — Germany, France, Spain, Poland, Australia, New Zealand, Japan. The spike of cases (though still small compared to prior volumes) has led for some tightening up on the economic restrictions in particular cities or more broadly.

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. While India and Brazil had by far the largest number of new cases from developing countries, they were followed by Colombia (150,508), Peru (103,620), Argentina (91,135), Mexico (83,521), South Africa (80,363) and then dozens of other countries with smaller numbers of new cases.

Deaths/100,000 population

The United States has the largest number of deaths of any country to date and in the last two weeks. If one looks at deaths/100,000 population, in the lats two weeks, the countries with the highest number of deaths per 100,000 population were the following: Peru (20.91), Colombia (8.90), Bolivia (8.16), Mexico (7.11), Panama (6.99), Brazil (6.48), South Africa (6.02), United States (4.57). 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 1.06 deaths/100,000 population.

If looking at the entire period since the end of December 2019 through August 16, the average number of deaths for all countries per 100,000 of population has been 10.09 deaths. The seven countries (of 71 which account for 98% of total deaths) with the highest death rates/100,000 for the full period are: Belgium (86.73), Peru (80.20), United Kingdom (62.06), Spain (60.97), Italy (58.54), Sweden (which did not impose any restrictions)(56.53), the United States (51.50). With the exception of 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).

Conclusion

The world in the first seven and a half months of 2020 has not managed 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, that has not been true for the Americas (other than Canada), for parts of Asia and for parts of Africa where the pandemic has turned its attention or where the pandemic has not been brought under control.

That said, the last two weeks suggest the global total of new cases in a two week period may have just peaked in August. There are major challenges ahead as reopening of economies gets tested against possible resurgence of cases, schools reopen in many countries, and greater indoor months approach. So there are potentially unwelcome scenarios that could see the huge number of new cases resume an upward trend. But with effort, the world may see the backside of the growth curve.

With the sharpest global economic contraction since World War II, with slumping global trade, with even the wealthier countries struggling to maintain the needed stimulus to reduce the severity of the economic contraction and with potentially hundreds of millions of people around the world losing their jobs, and food insecurity rising with increasing poverty, the world needs to see the pandemic receding and needs breakthroughs in both vaccines and therapeutics, although realistically, 2021 is more likely than the rest of 2020 for the medicaL breakthroughs.

The WTO webpage has a page dedicated to COVID-19, and the WTO Secretariat has generated a host of information notes reviewing the range of challenges that the pandemic is presenting to nations. The most recent looks at the increased costs of trade that flow from the travel and other restrictions. My post from yesterday, looked at the rising food insecurity for dozens of countries facing rising extreme poverty because of the economic contraction being experienced around the world. Stated differently, the trade, economic, health and humanitarian challenges flowing from the COVID-19 pandemic are extraordinary. Stemming the number of new cases is an important step to reduce the pressures on governments, companies and citizens.

Food security and COVID-19 — how World Trade Organization Members could fill a pressing need

· August 15, 2020 · COVID-19, food security · , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , · No Comments

In 2020 as the world has been dealing with the health and economic consequences of the COVID-19 pandemic, the World Trade Organization has focused attention on keeping markets open by urging Members to provide notifications of trade restrictive and trade liberalizing measures taken not just on medical goods but also on agricultural products. The G20 countries and various groups of WTO Members have made commitments to impose restrictions only under limited circumstances and only temporarily, consistent with WTO obligations. Some Members have urged countries to agree not to impose export restraints on agricultural goods to limit worsening challenges during the COVID-19 pandemic. On agricultural export restrictions, a number of countries have applied some restrictions despite information that global food supplies are sufficient which should make restrictions unnecessary. The attention paid to the issue by the WTO and its Members have limited the number of countries engaged in agricultural export restraints which is a positive development.

With the steps many countries have taken to limit the spread of the COVID-19, there has been enormous economic pain incurred by most countires, with tens of millions of people in countries temporarily unemployed, schools closed, food distribution disrupted with the closure of restaurants which constitute a large part of food shipped from processing plants and farms.

The UN, World Bank and others have projected huge increases in the number of people pushed into extreme poverty because of the effects flowing from the pandemic. Extreme poverty brings with it food security issues as people suffering extreme poverty don’t have the means to procure basic food needs.

The United Nation’s World Food Programme (WFP) has long been involved in helping address food security needs around the world. In the COVID-19 pandemic, the WFP is mobilizing to provide assistance to some 138 million people in 83 countries. With most countries occupied with dealing with the needs of their own populations, countries and private citizens have been slow to respond to the humanitarian challenges facing so many around the world. The WFP has appealed for US$4.9 billion to let them perform their stepped up function during COVID-19 through the end of 2020. As of August 6, they had received only 9 percent of what they need, $US440 million.

The WFP during the pandemic has been involved in facilitating services by many NGOs and international organizations. For example, “Over 16,500 health and humanitarian personnel from 288 organizations have now been transported to destinations throughout Africa, Asia, the Middle East and the Commonwealth of Independent States countries by WFP’s air passenger service since its launch on 1 May. 53 destinations are now being served, with approximately 2,500 passengers using WFP’s service per week.” WFP, COVID-19, Level 3 Emergency, External Situation Report #12 (6 August 2020)(emphasis in original). The latest situation report is embedded below and reviews the wide array of services provided as well a review of some of the countries with acute needs. It also provides a link to contribute to the WFP.

WFP-0000118265

The External Situation Report indicates that there are 27 countries (based on an FAO-WFP hotspot analysis) which “are at risk of significant food security deterioration in the next six months”. (page 2). Countries at risk are Guatemala, Honduras, El Salvador, Nicaragua, Haiti, Peru, Ecuador, Colombia, Venezuela, Burkina Faso, Mali, the Niger, Sierra Leone, Liberia, Nigeria, Cameroon, Central African Republic, Democratic Republic of the Congo, Lebanon, Sudan, South Sudan, Mozambique, Zimbabwe, Somalia, Yemen, Ethiopia, Iraq, Syrian Arab Republic, Afghanistan and Bangladesh (total is 31, though Peru, Ecuador, Colombia appear to be at a lower level of risk based on coloration used on page 2). FAO – WFP early warning analsyis of acute food insecurity hotspots, https://docs.wfp.org/api/documents/WFP-0000117706/download/.

Where is the food aid?

For many countries, agricultural production has remained reasonably strong but large volumes of agricultural products have been destroyed based on lack of domestic markets, typically flowing from the collapse of the restaurant trade and the challenges in redirecting product, packaging and labeling into retail channels. See, e.g., New York Times, April 11, 2020, Dumped Milk, Smashed Eggs, Plowed Vegetables: Food Waste of the Pandemic, https://www.nytimes.com/2020/04/11/business/coronavirus-destroying-food.html.

At the same time, there have been huge increases in internal-country demand for help from food banks in some countries. See, e.g., for the United States: Feeding America, The first months of the food bank response to COVID, by the numbers, https://www.feedingamerica.org/hunger-blog/first-months-food-bank-response-covid-numbers.

It would seem that coordinated action by major agricultural goods producers in the WTO with the WFP and other groups should be able to provide large quantities of agricultural goods to those in need globally in the remaining months of 2020, goods which might otherwise simply be destroyed.

Similarly, while all countries are financially stretched during the pandemic, helping WFP obtain the needed financial resources to provide a coordinated pledging event should be of interest to WTO Members and many of the multilateral organizations working on COVID responses, as well as the business community and the general public.

While the WTO has grappled with limiting/eliminating export subsidies for agricultural goods, the WTO has always recognized the need to maintain the flow of humanitarian need particularly in agricultural goods. Consider these paragraphs from the 2015 Nairobi Ministerial Conference Decision on Export Competition (WT/MIN(15)45, WT/L/980 (21 Dec. 2015) at 6-7):

“International Food Aid

“22. Members reaffirm their commitment to maintain an adequate level of international food aid, to take account of the interests of food aid recipients and to ensure that the disciplines contained hereafter do not unintentionally impede the delivery of food aid provided to deal with emergency situations. To meet the objective of preventing or minimizing commercial displacement, Members shall ensure that international food aid
is provided in full conformity with the disciplines specified in paragraphs 23 to 32, thereby contributing to the objective of preventing commercial displacement.

“23. Members shall ensure that all international food aid is:

“a. needs-driven;

“b. in fully grant form;

“c. not tied directly or indirectly to commercial exports of agricultural products or other goods and services;

“d. not linked to the market development objectives of donor Members;
and that

“e. agricultural products provided as international food aid shall not be re-exported in any form, except where the agricultural products were not permitted entry into the recipient country, the agricultural products were determined inappropriate or no longer needed for the purpose for which they were received in the recipient country, or re-exportation is necessary for logistical reasons to expedite the provision of food aid for another country in an emergency situation. Any reexportation in accordance with this subparagraph shall be conducted in a manner that does not unduly impact established, functioning commercial markets of agricultural commodities in the countries to which the food aid is re-exported.

“24. The provision of food aid shall take into account local market conditions of the same or substitute products. Members shall refrain from providing in-kind international food aid in situations where this would be reasonably foreseen to cause an adverse effect on local13 or regional production of the same or substitute products. In addition, Members shall ensure that international food aid does not unduly impact established, functioning commercial markets of agricultural commodities.

“25. Where Members provide exclusively cash-based food aid, they are encouraged to continue to do so. Other Members are encouraged to provide cash-based or in-kind international food aid in emergency situations, protracted crises (as defined by the FAO14), or non-emergency development/capacity building food assistance environments where recipient countries or recognized international humanitarian/food entities, such as the United Nations, have requested food assistance.

“26. Members are also encouraged to seek to increasingly procure international food aid from local or regional sources to the extent possible, provided that the availability and prices of basic foodstuffs in these markets are not unduly compromised.

“27. Members shall monetize international food aid only where there is a demonstrable need for monetization for the purpose of transport and delivery of the food assistance, or the monetization of international food aid is used to redress short and/or long term food deficit requirements or insufficient agricultural production situations which give rise to chronic hunger and malnutrition in least-developed and net food-importing developing countries.15

“28. Local or regional market analysis shall be completed before monetization occurs for all monetized international food aid, including consideration of the recipient country’s nutritional needs, local United Nations Agencies’ market data and normal import and consumption levels of the commodity to be monetized, and consistent with Food Assistance Convention reporting. Independent third party commercial or non-profit
entities will be employed to monetize in-kind international food aid to ensure open market competition for the sale of in-kind international food aid.

“29. In employing these independent third party commercial or non-profit entities for the purposes of the preceding paragraph, Members shall ensure that such entities minimize or eliminate disruptions to the local or regional markets, which may include impacts on production, when international food aid is monetized. They shall ensure that the sale of commodities for food assistance purposes is conducted in a transparent, competitive and open process and through a public tender.16

“30. Members commit to allowing maximum flexibility to provide for all types of international food aid in order to maintain needed levels while making efforts to move toward more untied cash-based international food aid in accordance with the Food Assistance Convention.

“31. Members recognize the role of government in decision-making on international food aid in their jurisdictions. Members recognize that the government of a recipient country of international food aid can opt out of the usage of monetized international food aid.

“32. Members agree to review the provisions on international food aid contained in the preceding paragraphs within the regular Committee on Agriculture monitoring of the implementation of the Marrakesh Ministerial Decision of April 1994 on Measures Concerning the Possible Negative Effects of the Reform Programme on Least-developed and net food-importing developing countries.

“13 The term ‘local’ may be understood to mean at the national or subnational level.

“14 FAO defines protracted crises as follows: ‘Protracted crises refer to situations in which a significant portion of a population is facing a heightened risk of death, disease, and breakdown of their livelihoods.’

“15 Belize, the Plurinational State of Bolivia, Ecuador, Fiji, Guatemala, Guyana, Nicaragua, Papua New Guinea and Suriname shall also have access to this provision.

“16 In the instance where it is not feasible to complete a sale through a public tender, a negotiated sale can be used.”

It is believed that the current WTO provisions on food aid should not pose hurdles to countries providing in kind aid where there are needed food products that can be exported during the pandemic. If that is not the case, then the WTO Members should agree to a temporary waiver of relevant restrictions to permit food aid during the pandemic.

There has been much discussion within the G20, WTO, WHO and other groups that collective action on the medical front is critical to see that medical goods, vaccines, are therapeutics are available equitably and at affordable prices. What one hasn’t seen is the same focus on ensuring that the world’ populations have access to food equitably and at affordable prices. During the pandemic, WTO Members have the opportunity to work together to see that food is not wasted and that food aid is supplemented to the extent possible to alleviate the unique challenges to food security presented by the COVID-19 pandemic.

APEC Trade Ministers’ Virtual Meeting on July 25 — Declaration on Facilitating the Movement of Essential Goods during COVID-19

· July 28, 2020 · APEC, COVID-19 · , , , , , , , , , , , , , , , , , , , , , , · No Comments

The Asia-Pacific Economic Cooperation (APEC) has twenty-one members whose territories borders the Pacific Ocean. The twenty-one members include Australia; Brunei Darussalem; Canada; Chile; China; Hong Kong, China; Indonesia; Japan; Malaysia; Mexico; New Zealand; Papua New Guinea; Peru; the Philippines; Republic of Korea; Russia; Singapore; Chinese Taipei; Thailand; United States; and Viet Nam. According to a 2019 USTR note on U.S.-APEC Trade Facts, APEC countries account for 38% of the world’s population, 60% of the world’s GDP and 47% of world trade. See https://ustr.gov/trade-agreements/other-initiatives/asia-pacific-economic-cooperation-apec/us-apec-trade-facts#:~:text=APEC%20has%2021%20members%2C%20referred,percent%20of%20the%20world’s%20trade.

In May 2019, APEC Ministers Responsible for Trade (“MRTs”) issued a statement on COVID-19 recognizing both the centrality for all members in halting the spread of the pandemic and the need for members to also focus on remedying the economic challenges flowing from the pandemic. Like the G20 and other groups, APEC MRTs recognized the importance of keeping markets open, of limiting emergency restrictive measures and ensuring such measures are “targeted, proportionate, transparent, temporary and should not create unnecessary barriers to trade, and are consistent with WTO rules.” APEC MRTs encouraged cooperation and the sharing of information and more. See Statement on COVID-19 by APEC Ministers Responsible for Trade, 5 May 2020, WT/GC/213. The May 2019 statement is embedded below.

213

At the July 25, 2020 virtual meeting of MRTs, the ministers issued a joint statement and included as Annex A the Declaration on Facilitating the Movement of Essential Goods. See MRTs joint statement, https://www.apec.org/Meeting-Papers/Sectoral-Ministerial-Meetings/Trade/2020_MRT; Annex A,https://www.apec.org/Meeting-Papers/Sectoral-Ministerial-Meetings/Trade/2020_MRT/Annex-A. Both are embedded below.

Ministers-Responsible-for-Trade-Virtual-Meeting-Joint-Statement-2020

Declaration-on-Facilitating-the-Movement-of-Essential-Goods-by-the-APEC-Ministers-Responsible-for-Trade-MRT

The joint statement reiterates the May 2019 key points and incorporates the Declaration on Facilitating the Movement of Essential Goods “which is a clear indication of the region’s continued support for WTO work.” The MRTs “recognize the need for discussions to reduce non-tariff barriers which restrict trade in essential goods.” There are other supportive statements about the importance of WTO work. “We encourage continued constructive engagement on WTO issues, including in the lead-up to the 12th WTO Ministerial Conference.” At the same time, the MRTs are looking to the development of a “post-2020 Vision” which they are hopeful leaders can launch at the end of 2020. Presumably, such a vision will include trade- related components which may include reforms at the WTO or simply be regional cooperation on certain important topics (supply chain issues on adequacy of supplies, e-commerce, movement of people as region recovers from COVID-19, etc.).

The Declaration on Facilitating the Movement of Essential Goods has ten specific actions that are declared.

The first two deal with export restrictions and prohibitions. The first is that each APEC member will ensure that any emergency trade measures introduced to address COVID-19 are consistent with WTO rules. The second commits APEC members to notify all such measures in accordance with WTO obligations.

The third declared action addresses non-tariff barriers. Specifically APEC members “are encouraged to work together to identify and resolve any unnecessary barriers to trade in essential goods.”

The next five declared actions pertain to trade facilitation — to expedite and facilitate the flow and transit of essential goods; to enhance coordination, efficiency and transparency of border clearance of essential goods; expediting the release of essential goods upon arrival; facilitating the entry, transit and departure of air cargo dealing with essential medical goods; abiding by the International Health Regulations of 2005.

The ninth declared action deals with tariffs and while not committing APEC members to liberalize tariffs for essential medical supplies, notes that some economies have taken such liberalizing actions and notes that the business community supports such action.

The last statement deals with reviewing progress on the APEC initiatives annually until COVID-19 is no longer a public health emergency.

Conclusion

Many countries and customs territories around the world have expressed objectives which are generally not significantly different than those put forward by APEC members.

With the large share of global trade accounted for by APEC members and with similar-type commitments by the G20 (which includes major members of the EU and has the EU participating), one would think it should be possible to obtain WTO commitments along similar lines to the APEC Declaration. The Declaration would need to have added some of the developing country and least developed country needs that have been already presented to the WTO so that the concerns of all are addressed.

While the WTO is doing an excellent job of providing information about the pandemic and trade measures taken by Members (at least those notified), the WTO Members have yet to get behind a set of principles that all Members can sign off on. Perhaps the APEC MRT joint statement and Declaration on Facilitating the Movement of Essential Goods provides a good starting point for the full WTO membership. While some WTO Members have not wanted to address COVID-19 issues during the pandemic, obviously collective action during the pandemic would be most effective. The post-pandemic needs also should be addressed but can await individual and group developments of views.