The World Around Us
June 24, 2022
WTO exceeds expectations

Such is the fractured nature of multilateralism that when multilateral bodies meet, expectations are low for concrete outcomes to emerge. Therefore, heading into the 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) which took place from June 12-17, 2022 in Geneva Switzerland, expectations were mixed, but generally on the low spectrum.

To the credit of trade ministers and negotiators, they were able to work through geopolitical distractions and huge divergences in positions to arrive at successful outcomes in a number of areas. These include fisheries subsidies, electronic commerce, WTO reform, food security, World Food Programme (WFP) purchases and responses to the novel coronavirus (COVID-19) pandemic.

With respect to fisheries subsidies, there are many harmful fishing practices taking place in our seas and oceans. Many of these practices are enabled by massive amounts of subsidies which large, industrialised fishing nations provide to their vessels.

Global fisheries subsidies were estimated at $35.4 billion in 2018, the vast majority of which allow vessels to overfish or to engage in illegal, unreported or unregulated (IUU) fishing.

The WTO was tasked by the United Nations (UN) General Assembly to deliver an agreement to prohibit harmful fisheries subsidies. After negotiating for 21 years, an agreement was finally reached at MC12 to end subsidies to IUU fishing, to the fishing of overfished stocks and fishing in the unregulated high seas. The real-life impact of this is that fisherfolk in many developing countries, including small scale fishers, may see their livelihoods preserved. On an even grander scale, the hope is that the health of the seas and oceans could be improved.

On electronic commerce, this is an area where there is a great divide between the digitally secure and the insecure. Challenges with respect to the poor quality of the digital infrastructure, access to the internet and access to digital platforms still exist in many countries, mostly in the developing world. Therefore, it was important for WTO members to agree on a renewal of the work programme on electronic commerce with a developmental component to allow for countries to engage in discussions, especially on how developing and least-developed countries can bridge the digital divide. Also of importance was for members to maintain the practice of not imposing customs duties on electronic transmissions without which, severe disruptions could unfold in the digital trade landscape.

In the area of WTO reform, after 27 years of existence, the organization needs to improve its functions. It also needs to restore the collapsed appellate body mechanism which guarantees the right of appeal after cases are adjudicated by panels. Members were able to agree to launch a reform process along these lines which could go a far way in shoring up the integrity of the rules based multilateral trading system.

Regarding food security, there were two key outcomes. The first was a political declaration where members promised to ensure that any emergency food security measures would be minimally trade distortive, “temporary, targeted and transparent” and notified to the WTO. This might seem like much of nothing, but in the context of elevated risks to global food security, it is important for countries, especially net food exporting countries, to exercise restraint when invoking their own food security measures. This is beneficial for the system as a whole.

The second key outcome on food security related to a decision to shield purchases made by the WFP from export restrictions. This is important given the central role played by the WFP in providing food aid to countries in the aftermath of natural disasters or during food crises such as droughts and famine.

WTO members were also able to agree on a two-packaged outcome on a response to the COVID-19 pandemic. The first, a political declaration, recognizes the role of diversification of production and ensuring that emergency trade restrictions are proportionate, transparent and temporary. Importantly, members also noted the severe effect of border restrictions on tourism dependent countries and encouraged dialogue to mitigate this. The second package saw members agreeing to waive intellectual property rights for up to five years for the production of COVID-19 vaccines.

The successful staging of MC12 demonstrates the virtues of global dialogue to address global problems. Hopefully, it does not turn out to be an anomaly, but rather, signals a return to global dialogue and diplomacy for the global public good.

Joel K Richards is a Vincentian national living and working in Europe in the field of international trade and development.
Email: [email protected]