By Peter Ungphakorn
POSTED DECEMBER 21, 2023 | UPDATED JANUARY 24, 2024
The World Trade Organization’s General Council had 25 items on the agenda for its last meeting of 2023, several of them with multiple sub-items. Most are — frankly — boring although essential for the record of WTO operations.
But some points were worth discussing from the meeting, which we can extend to include year-end sessions of the Trade Negotiations Committee and Dispute Settlement Body.
Here are six. They won’t hit the headlines, except perhaps one, but they do tell us something about the state of play on bigger issues, and where the WTO might be heading, particularly with the February 26–29 Abu Dhabi Ministerial Conference now only two months away.
The six are:
- Deadlock persists, even on how to break the deadlocks
- COVID-19 patents: eventually it might be better to admit defeat
- E-commerce: some progress, some foot-dragging
- Document secrecy is a mess
- Don’t hold your breath for a meaningful Ministerial Conference
- Why always India?
1. Deadlock persists, even on how to break the deadlocks
One of the most common suggestions for “WTO reform” is to bypass blockages in negotiations by starting off among only “the willing” and letting others join later if they are ready.
Talks among part of the WTO membership are called “plurilateral” (contrasting with “multilateral”, meaning WTO-wide), or sometimes “joint-statement initiatives (JSIs)”.
The approach, the argument goes, allows WTO rules to be updated more easily to reflect modern developments such as on digital trade and sustainability, even if only part of the membership is on board.
But there’s a problem.
India is resisting even this approach, with support from a couple of other members: South Africa and Namibia. They say plurilateral deals contradict the multilateral nature of the WTO, even though plurilaterals are already part of the structure of WTO agreements, and over 90% (around 150) of the WTO’s 164 members currently participate in plurilateral talks.
Resistance by such small numbers is possible because adding a plurilateral agreement to the WTO rule-book requires consensus among the whole membership, including non-participants.
India can block consensus all by itself. And in the General Council it said it would do so to prevent 117 participants (70% of WTO members) from amending the WTO Agreement so that the plurilateral investment facilitation deal is annexed alongside existing plurilateral agreements. It called the whole process “illegal”.
The new agreement can hardly be called a rich-nation conspiracy against developing countries. Participants include the likes of China, the EU, Bolivia, Chad and Laos — but not the US. They want to annex the agreement at the Ministerial Conference. Even non-participants like Pakistan, Panama and the US are in favour. But unless India and its handful of allies back down, that’s not going to happen.
The investment facilitation agreement itself, which was concluded in July, is not going to hit the headlines, even though it could help economies operate more smoothly, particularly the targeted developing countries.
But with other plurilateral talks potentially lining up to follow it into the WTO rule-book, such as e-commerce and digital trade, plastics pollution, and fossil fuel subsidies, this has become a test case for reforming WTO negotiations.
If India’s small band of resistance stand their ground in the face of overwhelming numbers wanting to proceed, then we could see an almighty row at the Ministerial Conference.
2. COVID-19 patents: eventually it might be better to admit defeat
Nice try, Bangladesh, Bolivia, Egypt, India, Indonesia, Pakistan, South Africa and Venezuela.
They asked the General Council to add tests and treatments to the June 2022 agreement on COVID-19 vaccines. Under that agreement, governments have more freedom to bypass some patent rights for the vaccines if they wish to do so — some obligations are “waived” (see Jayashree Watal’s blog post for the technical details). The proposal is to extend the deal to diagnostics and therapeutics.
Those eight countries knew that their proposal stood no chance of being agreed by consensus. They probably just wanted the opposing countries to look like they don’t care about people’s health.
But nothing in the WTO is so simple. WTO members have been deadlocked for years over whether the waiver should cover tests and treatments.
One group of countries argues that it is necessary for people who are at risk from COVID-19 to be able to access the products, particularly in poor countries.
The other side doesn’t exactly oppose the move. It simply says protecting intellectual property encourages invention and therefore helps produce tests and treatments for everyone. What’s more, this side says, the proponents do not have evidence to show that protecting patents prevents people from accessing tests and treatments.
Oh, but we have provided evidence, the proponents say. Oh no you haven’t, the sceptics reply. If the delegations weren’t deadly serious this would be like a British Christmas pantomime.
There is no longer a deadline for settling this, and no one dares to say “this isn’t going to work”. So on they go.
It wouldn’t be the first such non-result. One WTO intellectual property negotiation (on a multilateral register for some geographical indications) has been heading nowhere for 27 years. Annual updates from the chair say, effectively, “Members told me there was no point in meeting. I agreed. So we didn’t. See you next year.”
3. E-commerce: some progress, some foot-dragging
Wise people around the world are calling for the WTO to join the 21st Century. So you’d think governments would be keen to see it leap ahead on digital trade and the like.
What’s actually happening is confusing.
One set of talks is plurilateral — remember, that’s only among the willing.
First came progress. Then a set-back. The US said it was withdrawing its “proposals and attributions on data flows, data localization, and source code” while it consults internally on its approach to these “sensitive areas”. Work in other areas continues.
At the end of the year participants said they had “reached substantial conclusion” on rules for (a) digital trade facilitation; (b) open digital environment; and (c) business and consumer trust.
They said they would continue to work on: customs duties on electronic transmissions, development, electronic payments, information and communications technology products that use cryptography, telecommunications services, and issues that cut across all of these, aiming to conclude in 2024.
But even if they succeed, as with investment facilitation, they might not get any new rules attached to the WTO Agreement.
The loss of tax earnings in developing countries is miniscule — averaging 0.01% to 0.33% of total revenue
Another set of talks is an age-old “work programme”, which is sort of starting to move again, but so far just to the stage where there are four short proposals that would ask the February Ministerial Conference to instruct delegations to keep talking. Three were available at the December 2023 meeting. A fourth was added in January 2024.
The four only differ on one issue: the present agreement to keep cross-border electronic transmissions duty free (the “moratorium” on collecting duty).
Two proposals want to continue with it: from the African-Caribbean-Pacific group (62 WTO developing countries) and from another group of 24 developed and developing countries.
Two want to scrap the duty-free agreement. One is from South Africa, which says it’s concerned about the moratorium and doesn’t call for it to be extended. The other is from India (circulated on January 23, 2024), which doesn’t mention it at all. Both would therefore end it by default.
The debate has become a ritual. Before every Ministerial Conference, the standoffs continue until the last minute. Those wanting to scrap the deal say this time they really will not give in because they need the policy space to raise revenue from digital trade. And then they reluctantly allow the moratorium to continue.
Let’s see whether February 2024 will be different.
We can also wonder how many delegates noticed that a recent report, from several big-shot international economic and trade organisations, calculated that the loss of tax earnings in developing countries is miniscule — averaging 0.01% to 0.33% of total revenue.
4. Document secrecy is a mess
Now for something truly sensational.
Here are three top secret documents. They are reports from the chair in the year-end General Council, updating the membership on WTO reform (“reform by doing”), the e-commerce work programme (see above) and the follow-up on decisions taken at the last Ministerial Conference.
“We are so grateful that vital secrets such as these are protected,” said one person after seeing the leaked documents.
If you clicked on those links you’d have seen that the reports say almost nothing. Even the one on e-commerce only tells us what is already public knowledge.
Some secret documents do say more. This one contains status reports read out to the December 12, 2023 Trade Negotiations Committee, by the director-general (on a range of subjects), the General Council chair (on preparations for the Ministerial Conference), and chairs of the negotiations on agriculture, fisheries subsidies and development.
Despite the secrecy, both the General Council and the Trade Negotiations Committee were formal, on-the-record meetings. All those secret reports will be recorded in the minutes (here and here) and eventually available publicly. Why these reports were ever secret is a mystery.
Reports to formal meetings by chairs of regular and negotiations meetings, the chair of the Trade Negotiations Committee (TNC), and the Director General (who chairs the TNC too) — these are among the targets of a group of 39 members, including the EU and US, who want to loosen the rules on when documents should be secret (or “restricted”) and when they should be public. The proposal’s full text is here.
“We see no compelling reason why these must be kept restricted as they are formal statements explaining the state of our work,” the group says in a comment that refers to other documents as well, such as meeting agendas (most are secret, forever) and WTO Secretariat reports.
One of the reasons for the call for more openness is so that stakeholders are well-informed and understand the WTO better.
WTO Director-General Ngozi Okonjo-Iweala has set up two advisory groups from business and civil society. If they are to advise her, they have to know what’s happening in negotiations and other WTO work.
And for that, in present circumstances, she would have to leak to them information that is not generally available to the public. That information would not be available to other business and non-governmental organisations who are not represented on her advisory groups.
In the General Council only three other delegations reacted to the proposal. China agreed, sort of, particularly on publishing meeting agendas, but wanted to discuss this further and to assess the risks.
Antigua and Barbuda was concerned about applying increased openness to the WTO website even though the proposal says the website would be subject to the same rules as documents.
India didn’t disagree, but didn’t agree either, simply saying it had some questions but that discussion should wait until after the Ministerial Conference.
The last time WTO members debated rules on releasing information to the public, they took four years to reach an agreement, from 1998 to 2002, and many of the resulting practices are still arbitrary.
For example, the agendas of the General Council and Dispute Settlement Body are public but none of the other committees are so open. And chairs’ reports are sometimes public, sometimes not. Even in one subject, fisheries subsidies, the practice has changed back and forth in the past two years.
It’s a mess. But past experience suggests feet are going to be dragged on this for years.
5. Don’t hold your breath for a meaningful Ministerial Conference
On the big issues, the prospects for the February Ministerial Conference are bleak.
Agriculture, which was effectively pulled from the 2022 Ministerial Conference, shows no signs of doing any better in 2024, with some positions hardening. The COVID-19 patent waiver will stay deadlocked.
The negotiations on the missing part of the 2022 Fisheries Subsidies Agreement might just see a breakthrough. Just. But the signs are not good. Much depends on a last-gasp attempt January 15 to February 9 before the Ministerial Conference.
“WTO reform” has seen some progress, particularly “reform by doing”, which deliberately avoids decisions by ministers or the General Council, often the best way to get things done.
Other issues are up in the air, like reforming the “deliberative function” and the possibility of confidence-building talks on subsidies and industrial policies.
On one issue, the person convening informal consultations sounds bullish: reforming dispute settlement. Guatemala diplomat Marco Molina reported that the “finish line is within reach”, with a 50-page third version of a text now before members.
The details of his report and members’ reactions to it reveal that the draft says nothing about appeals or any version of referring rulings to a second opinion (such as arbitration). Since for many members the most important problem is the US blocking appeals, the absence of anything on this throws into question how close to a consensus finish line the talks really are.
The WTO membership and its Secretariat will do their best to spin the positives of various “outcome” documents for the Abu Dhabi conference, but the betting is that many if not all of the big issues will stay unresolved.
6. Why always India?
Close followers of the WTO will have noticed that India regularly pops up seeming to oppose anything in sight. Even its proposals are usually hardline, with little chance of consensus agreement.
India will argue that it is defending its own interests and those of developing countries against the machinations of the rich, but even among poorer nations it can find itself isolated, such as on plurilateral talks (including this rant prepared and only partially delivered to the General Council), the e-commerce moratorium and perhaps derestricting documents.
Increasingly a major trading nation, and now, for example, the world’s largest rice exporter and a major agricultural subsidiser, India may soon find its claim to be a champion of the poor to be wearing thin.
The recent history of Indian intransigence includes many of the issues in the previous talking points, plus a tantrum and the refusal to discuss a Cairns Group proposal in agriculture, a hard line on domestic support in procured food security stocks, the original proposal for the COVID-19 waiver that stood no chance of being accepted, and a call to reopen the 2022 Fisheries Subsidies Agreement.
Often India’s hard line leads to an unbreakable deadlock. Occasionally India does yield, such as when, mysteriously, it accepted a watered-down version of the COVID-19 waiver. Or when the Indian minister was happy to tell journalists at the end of the 2022 Ministerial Conference that no decision on “public stockholding” was good because it meant India would not have to change what it was doing.
Old hands remind us that India has been blocking almost everything since before the Uruguay Round talks were launched in 1986. But India was eventually part of the agreement at the end of the Uruguay Round that set up the WTO. India then held up until the last minute the start of the next talks, the Doha Round.
Whether the reputation is fair or not, India is seen among a substantial number of delegations as being obstructionist and rarely constructive in the WTO. By contrast, other countries that do block big issues — the US on appeals in legal disputes, for example — do manage to find ways to be collaborative on other topics.
Remember Mario Balotelli? He’s the Italian footballer whose bad-boy reputation and media scrutiny led him in 2011 to display an under-shirt with the ironic message “Why always me?” as he celebrated scoring a goal.
Perhaps the Indian delegation could do with some of those shirts.
See also: Comment: on India’s claim that a plurilateral WTO deal is ‘illegal’
Updates:
January 24, 2024 — adding India’s e-commerce proposal, which would end the moratorium on duties on electronic transmissions by default
January 13, 2024 — adding links to “Comment: on India’s claim that a plurilateral WTO deal is ‘illegal’”
January 3, 2024 — Numbers added to the six headings. In 2 (COVID-19 waiver), the description of the waiver has been corrected (thanks to Jayashree Watal). In 5 (the Ministerial Conference outcome): the reference to Molina’s report has “members’ reactions to it” added. In 6 on India: linking to its prepared statement on investment facilitation and plurilaterals; plus one small edit
Image credits:
● Main image | General Council, WTO/Franck Abdulrahman Ghanram; Mario Balotelli, X/Twitter
● Pantomime | Wellcome Library, London, CC BY 4.0 (A political cartoon. “St. Stephens pantomime, the church in danger” Lithograph 01/01/1887 By: Tom Merry, St Stephen’s Review Published: 1 January 1887.)
● If I tell you I’ll have to kill you | Photo by Marcelo Chagas, Pexels licence
● Mario Balotelli | X/Twitter
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