Battered WTO on the verge of 'dead end' heading into final day of talks

A global bid to deliver a package of World Trade Organization agreements on issues ranging from food security to tariff-free digital commerce headed into an extended session with hopes fading that a final push for compromise will yield 11th-hour breakthroughs.
 

On the final full day of the WTO’s 12th ministerial conference in Geneva, officials from the world’s largest economies were only a few words away from an agreement to waive intellectual-property rights for Covid-19 vaccines. But India remained a key holdout in negotiations expected to end by mid-afternoon on Thursday. 

The future success of a trade body that has not concluded any multilateral agreements in almost a decade hinges on members making sufficient compromises in the coming hours in order to overcome a veto by any of its 164 members. 

“There are three roads out of here,” International Chamber of Commerce Secretary-General John Denton said in video statement. “The first is compromise, which will provide relevance for the WTO. The second is muddling together something that looks acceptable. The third is the dead end.”

“It looks like the 100 ministers present in Geneva are condemning the WTO to a dead end,” he said. “We’re going to work like hell to find ways through that.”

Green Room Meeting
 

WTO Director-General Ngozi Okonjo-Iweala sought to close the remaining gaps in the negotiations and produced a series of draft texts that aimed to resolve disagreements that have persisted in the WTO’s negotiations for years.

On Wednesday evening, Okonjo-Iweala convened a closed-door meeting with more than a dozen trade officials to determine their willingness to approve the following:

• a framework to expand global access to vaccines and help mitigate the global food crisis
• a process to reform how the WTO functions
• a renewal of the WTO’s ban on e-commerce duties
• an agreement to curb harmful fishery subsidies, and
• a work program to improve the WTO’s agriculture rules

The European Union, which has been an active contributor to all areas of the the WTO’s ministerial negotiations, said it was broadly supportive of the proposed texts, including the IP waiver, according to an account of the deliberations from a person close to the WTO. 

Meanwhile, the Chinese delegation said that with a little more work it may be in a position to support the WTO’s proposal to waive IP rules -- indicating that negotiators may be close to resolving a key disagreement with the US over its ability to benefit from the proposal.

But prospects appeared more bleak for a deal to curb harmful government fishing subsidies, a rollover of the WTO’s e-commerce moratorium and a package to help alleviate the looming food crisis, according to the readout.

The US delegation urged members to press forward and indicated that US Trade Representative Katherine Tai plans to depart Geneva on Thursday morning at 9 a.m., after which point any agreements may prove elusive.

Vaccine Waiver
 

India reiterated Commerce Minister Piyush Goyal’s view that any WTO vaccine agreement must also waive IP rights for Covid-19 diagnostic tests and therapeutic drugs, according to the readout.

On Tuesday, Goyal told ministers “there is no way we are going to yield” on its demand and for the first time acknowledged that “not a single plant to make manufacturing of vaccines will come with this” agreement.

India blamed powerful nations for dragging out the negotiations for so long that it finally lost its relevance as pharmaceutical manufacturers were ultimately able to produce an oversupply of vaccines.

“What we are getting is completely half-baked and it will not allow us to make any vaccines,” Goyal said in a statement posted on his ministry’s website. “Vaccines have already lost relevance,” he said. “It’s just too late; there is no demand for vaccines anymore.”

E-Commerce Moratorium
 

If governments fail to roll over the WTO’s digital duty ban, it could open a new regulatory can of worms that could increase consumer prices for cross-border Amazon.com purchases, Netflix movies, Apple music, and Sony PlayStation games.

India, which previously proposed ending the ban, said it won’t concede its ability to impose digital tariffs and wanted policy space to help develop its own domestic e-commerce industry, according to the readout. Likewise, South Africa said a rollover of the WTO e-commerce ban was not yet ripe for adoption.

Most other delegates at the meeting -- including the EU, US, UK, China, Brazil -- favored renewing the WTO’s e-commerce moratorium as a means to reduce poverty, support small businesses and help women entrepreneurs. India separately rebuffed a Chinese proposal to allow nations to voluntarily opt out of the waiver.

“If they can’t do this then the WTO, as they convene it, will be officially broken,” Denton said.