MC12 delay gives time for entrenched positions' review

On Friday, the World Trade Organisation (WTO) indefinitely postponed its 12th Ministerial Conference (MC12) after the discovery of new Covid-19 variants led several governments to impose travel restrictions that would have prevented many trade ministers from reaching Geneva. The four-day meet was scheduled to start from Tuesday to review the functioning of the multilateral trading system, to find agreements on some critical trade issues and take decisions on the future work of the WTO. 

One of the main topics to be discussed at MC12 was the proposal to waive intellectual property rights for increased production of vaccines, an idea put forward by India and South Africa and supported by many developing countries and the United States but opposed by the industry and European Union. Another important item on the agenda of MC12 was the negotiations for reducing subsidies for fishing. Besides, the trade ministers were to deliberate on various trade distorting measures in agriculture, e-commerce, environment, investment, services, health and development policies of the member countries.

The dispute settlement mechanism at the WTO is rendered dysfunctional by the failure of the United States to endorse the appointment of enough judges at the appellate body. Except the Trade Facilitation Agreement, the WTO members have not concluded any other negotiation since its formation. The Doha Development Agenda has been dropped for all practical purposes. The chasm between the developed and developing countries has widened with the proposals for waiver of intellectual property rights (IPR) for vaccines to tackle the Covid-19 pandemic not making much headway. Many countries have raised trade barriers on flimsy pretexts ignoring the basic tenets of the multilateral trade agreements at the WTO. So, reform of the processes of facilitating negotiations, oversight of the agreements and dispute settlement mechanism at the WTO were also to be discussed at the WTO.
 

These issues will be on the table, whenever the trade ministers meet next. “The postponement does not mean that negotiations should stop.  This new variant reminds us once again of the urgency of the work we are charged with”, said Ngozi Okonjo-Iweala, the Director-General of the WTO.

The WTO says that the global trading system has been a source of flexibility, diversification and strength during the pandemic, helping countries cope by facilitating access to critical medical supplies, food and consumer goods, and by supporting their economic recovery. It expects global economic output to recover by 5.3 per cent in 2021, partly due to robust recovery in merchandise trade, which is set to rise by 8 per cent in 2021. However, trade in services continues to remain subdued.

WTO’s recent World Trade Report 2021 says that today’s hyper-connected global economy, characterized by deep trade links, has made the world more vulnerable to natural and man-made disasters but also more resilient to such shocks when they strike. Second, unwinding trade integration, by re-shoring production and promoting self-sufficiency, can effectively reduce economic resilience.  And third, strengthening economic resilience will require more global cooperation, both regionally and multilaterally.

The postponement of MC12 gives the WTO member countries more time to mull over the areas of divergence in opinions pointed out in the background paper prepared by the WTO secretariat for MC12 and come up with workable proposals to narrow the differences. Hopefully, they will review their entrenched positions and strive for meaningful negotiations.

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