Belief in the multilateral trade system is eroding, and that spells trouble

By Peter Ungphakorn and Robert Wolfe
POSTED FEBRUARY 26, 2023 | UPDATED FEBRUARY 26, 2023

Time flies. It was only last June that the World Trade Organization (WTO) emerged from a morale-boosting Ministerial Conference, hailed as a success simply because members could at least agree on what to do next, often in the vaguest possible terms, and not on everything.

They did strike a deal on curbing harmful fisheries subsidies but even that was gutted of its most important element: tackling subsidies that contribute to overcapacity and overfishing, the top priority of UN Sustainable Development Goal 14 Target 6.

The June success is already a distant memory.

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Whatever happened to the WTO intellectual property negotiations?

By Peter Ungphakorn
POSTED DECEMBER 4, 2022 | UPDATED DECEMBER 5, 2022

No one noticed when these World Trade Organization negotiations passed their 25th anniversary in early 2022. It was no surprise since WTO members had not even bothered to meet in these talks for a decade, except to appoint a new chair and tidy up other administrative issues.

This is about geographical indications — names associated with specific production areas, such as Champagne wine, Scotch whisky or Caerphilly cheese.

The negotiations are not about protecting the names as such. That was settled in the 1994 intellectual property agreement, although some countries want more.

Rather, these talks are about creating in the WTO a multilateral register for geographical indications for wines and spirits. They are the only officially recognised negotiations on intellectual property in the WTO.

And although they’ve been stuck in limbo since 2012, before that the negotiations did manage to narrow gaps between diametrically opposed positions until they could proceed no further.

The achievement is subtle but significant. The failure of WTO negotiations more broadly prevented members from taking the final steps, although that could not be guaranteed even in a better atmosphere.

Why it’s a mistake to talk about a ‘Swiss-style’ post-Brexit UK-EU deal

By Peter Ungphakorn
POSTED NOVEMBER 21, 2022 | UPDATED DECEMBER 5, 2022

Maybe it was because someone thought it would be a good idea to stick a label on where UK-EU relations might be heading now that the atmosphere between the two is widely reported to have improved. Or perhaps it was just because people were bored while waiting for the football World Cup to start.

Whatever the reason, “Swiss-style ties with Brussels” suddenly became big news over the weekend after the Sunday Times reported (November 20, 2022, paywalled, but some more detail here) that the British government is considering exactly that.

Reactions ranged from “Doubt it. EU hates its relationship with Switzerland & Switzerland hates its relationship with EU” (Mujtaba Rahman, here), to “when someone says ‘Swiss-style’ relationship, rather than hearing ‘a slightly better relationship [than] now’ everyone is like ‘LET ME GET MY NOTES’” (Sam Lowe, here).

The problem here is that “Swiss-style” is being used as shorthand. It’s a label, but one that’s misleading and not really explained. Both of the reactions above are valid, at least to some extent, but they are talking about different things.

WTO agriculture negotiators face challenge of thinking outside the box(es)

By Peter Ungphakorn
POSTED OCTOBER 23, 2022 | UPDATED OCTOBER 24, 2022

See also the report on the retreat (published October 26, 2022):
WTO agriculture retreat said strong on context but weak on give-and-take

Brain-storming. Blue sky thinking. Wiping the slate clean. Thinking outside the box. Pick your cliché. World Trade Organization (WTO) members’ ambassadors and agriculture attachés go on a “retreat” tomorrow (October 24) as they try to discover solutions where none have been found for over a decade.

The common impression is that the WTO agriculture negotiations have achieved nothing since they started almost a quarter of a century ago in 2000.

This is partly because after just over a year (in 2001), the talks were rolled into the newly launched and broader Doha Round of WTO negotiations. And now the Doha Round is widely considered to be dead.

Officially the position is more complicated. Some members say the Doha Round is over. Others say the original mandate continues — they refuse to endorse the end of the round.

In practice some parts of the Doha Round have been concluded, such as the Trade Facilitation and Fisheries Subsidies agreements. Other parts are in limbo or the talks have dried up, at least among the full membership. What has faded away is the idea of the talks as one unified package or “single undertaking”.

(An aside here. What almost no one has noticed is that the Trade Negotiations Committee of the WTO membership — with the director-general ex officio in the chair — still meets. This committee was set up specifically within the Doha Round. If the round has ended so should the Trade Negotiations Committee. That would also mean the director-general has no official position in any council or committee of the WTO membership.)

UPDATES: expanding the WTO intellectual property waiver for COVID-19

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By Peter Ungphakorn
POSTED OCTOBER 4, 2022 | UPDATED AS INDICATED

The waiver on patent protection for COVID-19 vaccines was agreed at the WTO Ministerial Conference on June 17, 2022. The text with brief explanations is here. The waiver is not an obligation. Countries can choose to suspend certain patent rights if they want.

Much of the work after the Ministerial Conference results from a provision for WTO members to decide within six months (by December 17, 2022) whether or not to expand the waiver to include COVID-19 tests and treatments:

“No later than six months from the date of this Decision, Members will decide on its extension to cover the production and supply of COVID-19 diagnostics and therapeutics”

Background: The original (revised) proposal; the debate; the proposed compromise and analysis.

Updates on the latest developments will be added here, with links to new documents and news items. That will include any notifications from countries changing their laws to apply the waiver. So far there are none.

Key events

• December 20, 2022 — The General Council agrees on postponing the deadline with no date set, but to be reconsidered in the Spring
• December 19, 2022 — The General Council postpones a decision on postponing the deadline
• December 17, 2022 — deadline for expansion decision missed, so far no country has moved to use the vaccine patent waiver agreed in June
• December 16, 2022 — formal meeting: chair’s draft binned, replaced by short paragraph postponing the deadline
• December 7, 2022 — chair’s draft factual report circulated
• December 6, 2022 — informal meeting discusses proponents’ draft and postponing deadline
• December 5–6, 2022 — US announces it will need time to consult stakeholders
• November 2, 2022 — informal meeting, with members’ positions on expanding the waiver to tests and treatments crystallised into three groups
• July 6, 2022 — first meeting after the vaccine patent waiver decision, followed by stock-taking and informal meetings

(TRIPS = trade-related aspects of intellectual property rights, the official description of intellectual property issues that are discussed in the WTO — they should be “trade-related” issues)

Türkiye and EU: appeal-by-arbitration cases leave questions about WTO law

Originally published as
“Alternative to the alternative: Turkey and EU use arbitration for WTO appeals”
and previously as one section in
“Arbitration — the stop-gap when WTO appeals are unavailable”

By Peter Ungphakorn
POSTED AUGUST 30, 2022 | UPDATED SEPTEMBER 26, 2022

Türkiye told World Trade Organization members on August 29, 2022 that it would comply with dispute rulings that said it was violating WTO agreements by giving preferences to locally-produced pharmaceutical products, even though the rulings have not been formally adopted.

So far, the case is unique among WTO legal disputes. It is the first use of appeal-by-arbitration as a route to a second legal opinion on a ruling, while the WTO Appellate Body cannot function.

And because at the time arbitration was the only route open to Türkiye to appeal the case, neither the first-stage “panel” ruling, nor the findings in the appeal, have been formally adopted by the WTO’s membership.

This raises questions about the status of the rulings in WTO law. When a ruling has been formally adopted, governments (and others involved in trade) can assess with a degree of confidence whether similar policies or measures comply with WTO agreements.

When the membership has not adopted a ruling, that confidence is weakened, although some legal experts suggest the difference is small. The US treats non-adoption as significant without explaining why.

Have we just seen the funeral of the WTO ‘single undertaking’?

See also
WTO members achieve breakthrough, but the tough part is what happens next | The successful WTO Conference saw one big failure: agriculture | Our scorecards

By Robert Wolfe
POSTED JUNE 21, 2022 | UPDATED JUNE 21, 2022

Observers of multiple World Trade Organization (WTO) ministerial conferences felt gloomy early during the June 12–17 meeting, when Director-General Ngozi Okonjo-Iweala warned against mingling the issues.

She was reported to have urged ministers to make trade-offs within the same issue rather than across the package of issues.

In an interview with the Financial Times’ Alan Beattie (paywalled) she confirmed her approach.

“Sometimes, all this leveraging and cross connections between outcomes I think in the past has led to the failure to achieve anything, because then everything just doesn’t work and collapses. I was really determined from the get-go that wasn’t going to happen and I was trying to discourage members from linking one thing to another,” she said.

I was trying to discourage members from linking one thing to another

— Ngozi Okonjo-Iweala,
Financial times

Those of us who analyse the WTO have a mental model of how members could reach agreement. When the process seems too slow, or it fails, analysts think: if the Secretariat or members could do it differently, then the obstacles could be overcome. This reasoning is counterfactual, meaning something that has not happened but might happen under different conditions.

Touch and go at the WTO. Is the director-general’s optimism justified?

By Peter Ungphakorn and Robert Wolfe
POSTED JUNE 9, 2022 | UPDATED JUNE 12, 2022

How many times can a curtain go up and down? This is our second curtain-raiser for the World Trade Organization’s 12th Ministerial Conference, now rescheduled for June 12–15, 2022.

As we wrote when the meeting was postponed in late 2021, the WTO risks disappearing into a chasm of petty procedural wrangling over what to talk about, and how to move forward.

After delays in 2020 and 2021 due to the pandemic, and more recently the threat to multilateralism posed by Russia, the fact of it happening at all will be taken as a success. But have WTO members been able to move closer to significant agreement on anything?

This time our curtain-raiser proposes some benchmarks for assessment. There’s even a scorecard at the end for anyone following along at home.

Milestone or inchpebble? The first UK ‘trade deal’ with a US state, Indiana

By Peter Ungphakorn
POSTED MAY 29, 2022 | UPDATED MAY 31, 2022

“They said a US trade deal couldn’t be done. It can. We are doing it.”

That declaration by UK Minister of State for Trade Policy Penny Mordaunt is the headline on a piece she wrote on a partisan website to celebrate signing an agreement with the US state, Indiana.

But is it a “US trade deal”?

• It is not with the “US”, but Indiana — a state with 2% of the US population (at 6 million slightly more than Yorkshire or Scotland), less than 2% of the US economy (GDP), and less than 1% of its area (ranked 38th of the 50 US states)
• The actual “trade” content is minimal, when compared with what governments usually sign in trade agreements
• “Deal” is misleading since this is not the conclusion of anything. It’s a memorandum of understanding (MoU) — or joint statement of intent — on future cooperation and on what future talks will cover. The way it’s presented stretches the meaning of “agreement” a lot.

The phrase “trade deal” is itself a problem.

Alternative to the alternative: Turkey and EU use arbitration for WTO appeals

This has now been republished as
“Türkiye and EU: appeal-by-arbitration cases leave questions about WTO law — Similar to the 50-member ‘Multi-party Interim Appeal Arrangement (MPIA)’, one ruling has been formally adopted, the other not”