MC12: Decisions not impactful, but WTO wins big

Last week, trade ministers of 164 member countries of the World Trade Organization (WTO) agreed on a set of measures that do not amount to much in terms of impact but are significant because all of them signed up to the decisions, thus restoring the confidence, credibility, and relevance of the body.

Developing countries, under certain circumstances, can now allow manufacturers to make and export Covid-19 vaccines without consent from the patent holders. Developing countries, such as India, with the existing capacity to manufacture Covid-19 vaccines, are encouraged to make a binding commitment not to avail of this decision.

The decision comes at a time when vaccine availability in the world is not a major issue and the Covid-19 threat has abated, although it has not gone away.  Also, the decision does not extend to other vaccines, therapeutics, diagnostics or other essential medical goods. Whether the manufacturers in developing countries can manufacture the vaccines without the transfer of requisite know-how by the patent holder is doubtful. Moderna, a leading pharmaceutical manufacturer, waived its intellectual property rights for Covid-19 vaccines but no other entity has been able to manufacture its vaccines.

Henceforth, the WTO members shall not impose export prohibitions or restrictions on foodstuffs purchased for non-commercial humanitarian purposes by the World Food Programme. However, this decision shall not prevent the adoption by any member of measures to ensure its domestic food security, in accordance with the relevant provisions of the WTO agreements. So, any country can still invoke its food security concerns to justify its export bans.

The current practice of not imposing Customs duties on electronic transmission will continue till the next ministerial conference (MC13) to be held towards the end of December 2023. If the MC13 is not held by March 31, 2024, the moratorium will expire on that date unless ministers or the General Council take a decision to extend it. This decision is a modest win for countries that want to tax electronic commerce but a lot depends on how the negotiations proceed on this issue in the days ahead.

No member shall grant or maintain any subsidy to a vessel or operator engaged in illegal, unreported and unregulated (IUU) fishing or fishing related activities in support of IUU fishing. Indeed, these activities should not be allowed at all and, so, there should be no question of extending subsidies to them. Anyway, it is a step forward because any agreement on fisheries subsidies has eluded the WTO members since the negotiations on the issue commenced in 2001.

An important step forward is the intent to reform the WTO rules. Since the WTO was established in 1995, the world has changed significantly and so, there is a need to revisit the rules based on the experience gained. The General Council and its subsidiary bodies will examine the reforms needed, review progress, and consider decisions, as appropriate, to be submitted to the next ministerial conference.

On the dysfunctional dispute settlement mechanism, the trade ministers have committed to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all members by 2024.

Overall, MC12 is a great win for WTO and its Director General Ngozi Okonjo-Iweala. “The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time,” she said.

Email: tncrajagopalan@gmail.com