The 12th WTO Ministerial Conference outcomes

Introduction

Between the 12th and 16th of June 2022 the World Trade Organization held its twelfth Ministerial Conference at the WTO’s headquarters in Geneva, Switzerland. It has been almost five years since the eleventh Ministerial Conference due to delays associated with the COVID-19 pandemic. Expectations were low but the stakes were high. At a time when globalisation and trade are under threat due to increased geopolitical tensions, a rise of protectionist trade policies and stressed global supply-chains, the conference was a test of the WTO’s future relevance.

Despite lack of consensus leading to a day’s extension to the meeting, an important package was agreed. We set out the main outcomes below, together with our own assessment.

Food safety and agriculture

COVID-19, trade disruptions, rising inflationary pressures and excess market volatility have catalysed the issue of food security across the world. Members at the conference agreed that any emergency food security measures should be reported to the WTO and that they would need to cause minimal distortion to trade by being “temporary, targeted and transparent”. WTO members also agreed not to prohibit or restrict any exports purchased by the World Food Programme for non-commercial humanitarian purposes; however, this will not supersede existing exceptions in trade agreements for measures taken on domestic food security grounds.

Waiver of certain patent rights relating to COVID-19

Members also agreed to limit the scope of patent rights relating to COVID-19 vaccines to allow developing countries to produce their own vaccines. It will allow them to waive intellectual property protections on the vaccines without the patent holder’s permission. The waiver will last until 2027. The decision on extending this waiver to COVID-19 therapeutics and diagnostics has been delayed for six months.

A footnote in the text of the decision has been interpreted as meaning that China, a developing country in WTO terms, will not seek to use this waiver as they already have their own patents and strong production capacity. This concession by China was a pre-condition for US support for the waiver and was negotiated between the two countries.

Fisheries subsidies

In 2001 the United Nations General Assembly requested that the WTO co-ordinate negotiations between its members to deliver on an agreement which would prohibit fishing subsidies being provided to those engaged in overfishing practices. After 21 years an agreement – albeit a diluted version – has been reached which prevents members from providing subsidies to those who engage in illegal, unreported and unregulated (IUU) fishing or the fishing of overfished species. No nation will be permitted to provide subsidies for fishing in the high seas except where regulated by a fisheries management organization. The deal includes notification requirements for each nation to demonstrate compliance with the new rules, and establishes a voluntary funding mechanism for the developing countries

The negotiations did, however, lead to some carve-outs. Developing country members are to be granted a two-year exemption for subsidies which are granted within their exclusive economic zones (up to 200 nautical miles from the coast).

Importantly, this is the second multilateral agreement between all members in the WTO’s 27-year existence and is also the first agreement that puts environmental sustainability at the core

E-commerce

Businesses had been voicing strong concerns that the conference would lead to the end of the moratorium on tariffs on electronic transmissions adopted in 1998. Discussions on this issue did not lead to a permanent deal, disappointingly; instead, WTO members agreed to renew the moratorium in its current state until the next Ministerial Council, currently expected to take place from 31 March 2024. IN parallel, the WTO’s General Council will be required to hold periodic reviews based on the scope, definition and impact of the moratorium on global trade.

WTO reform

The WTO’s director-general, Ngozi Okonjo-Iweala, stated that “the widespread recognition that the WTO's core functions need to be updated and improved.” Members agreed, reaffirming the fundamental principles of the WTO and committing to an “open and inclusive process” to reform all of its functions – from deliberation to negotiation to monitoring. Members also committed to having a well-functioning dispute resolution system accessible to all members no later than 2024, not least due to the dormancy of the appellate body since 2020 due to the US refusal to agree to appoint new judges.

Comments

Undoubtedly, this twelfth Ministerial Conference helped to return some credibility to the WTO. Following tense negotiations multiple deals were agreed relating to important issues such as food security, fisheries and vaccinations. It would have been a missed opportunity for governments not to use trade collaboration to tackle the pandemic, the food crisis or the depletion of fish stocks. Failure to extend the moratorium on the imposition of customs duties on electronic transmissions would have been a setback for the continued expansion of the digital economy and the growing number of small and medium businesses and consumers in both advanced and developing economies that rely on it

The WTO’s director-general, Ngozi Okonjo-Iweala, is credited with breathing energy back into the multilateral organisation. In her concluding remarks she said that:

“the package of agreements you have reached will make a difference to the lives of people around the world. The outcomes demonstrate that the WTO is, in fact, capable of responding to the emergencies of our time. They show the world that WTO members can come together, across geopolitical fault lines, to address problems of the global commons, and to reinforce and reinvigorate this institution. They give us cause to hope that strategic cooperation will be able to exist alongside growing strategic competition.”

However, many will argue that these deals did not go far enough to address the actual issues looming over international trade, such as supply-chain bottlenecks and the rise of protectionism in spite of globalisation. Despite this renewed optimism, the WTO’s relevance and its ability to lean on national governments, particularly the US and China, will be subject to the test of time between now and the next Ministerial Conference.