World trade cooperation will be put to the test in Abu Dhabi

Author/s
DOUG PALMER, CAMILLE GIJS
Politico Pro

Here’s a roundup of the issues at stake at the upcoming ministerial:

Fishing subsidies: The WTO reached a partial agreement at its last ministerial conference in June 2022 to curb subsidies that threaten the future of ocean fish supplies.

This time they are trying for a more comprehensive agreement that would hopefully have a much bigger impact on maintaining one of the world’s most important food stocks.

Of all the issues at stake in Abu Dhabi, officials are most hopeful about getting this negotiation over the line. “If there’s no agreement on fish at MC13, that’d be a tragedy,” one Geneva-based diplomat said.

For Okonjo-Iweala, the negotiation is proof the WTO is still relevant. “260 million people depend on fisheries for their livelihood, and the oceans are being overfished. [The question for ministers in Abu Dhabi is] can we save the oceans, be part of the regenerative blue economy and save jobs?” she told POLITICO in an interview.

Digital trade: One of the biggest achievements of the upcoming ministerial meeting could be maintaining a ban on the collection of tariffs on digital goods and other “electronic transmissions.”

The ban has been in place since 1998, but some member countries such as India, South Africa and Indonesia believe they are missing out on valuable tariff revenue because of streaming services that have largely replaced DVDs and CDs.

Supporters of the ban say the lost revenue is trivial compared to the cost of letting the moratorium expire, which they worry could open the door for tariffs on all sorts of data and transactions that cross borders over the internet.

Business groups also argue failure to renew the moratorium would be a major setback since it would be the first time the WTO has made a decision that makes it harder to trade.

“The majority of members want the extension but there are a few members who find it's a problem because they think it has an impact on revenues,” Okonjo-Iweala said. “Let's see what comes up from the negotiations. We were able to successfully extend the e-commerce moratorium” at the WTO’s 12 Ministerial Conference in June 2022.

Dispute settlement: The United States’ most meaningful move at the WTO in recent years was a negative one in 2019, when the Trump administration effectively killed the group’s powerful Appellate Body, which decided trade disputes between member countries, by blocking the appointment of new judges.

Trump officials charged the panel had gone too far in restricting how the United States could impose duties on goods it believes are unfairly priced or subsidized. Trump’s chief trade negotiator, Robert Lighthizer, called it “a colossal and tragic failure” in a recent book.

But most other members want to see the Appellate Body restored so they can appeal lower panel decisions that they believe are mistaken.

Some progress could be made in Abu Dhabi, but Biden administration officials have been clear they see the end of 2024 — after the U.S. presidential election — as the real deadline for reaching an agreement to reinstate some sort of judicial function.

Food security: In what has become a regular feature of recent WTO ministerials, India wants its anti-hunger program to be permanently protected against a challenge that it violates the country’s cap on trade-distorting farm subsidies.

It won a temporary peace agreement in 2013, but major agricultural exporters, including the United States, are increasingly frustrated by the way India operates its food security program, particularly for heavily-traded commodities such as rice and wheat.

India has threatened to block progress on all other issues at the upcoming ministerial unless an agreement on its public stockholding is reached. That puts tremendous pressure to accommodate India’s demand or risk having a failed ministerial.

Covid-19 treatment patent waivers: WTO members could also face a decision on whether to waive intellectual property protections for Covid-19 therapeutics and diagnostics. That would open the door for developing country manufacturers to make generic versions of Paxlovid and other treatments, as well as test kits and assorted other products.

But with Covid-19 feeling like a problem of the past for some, expectations of a deal are very low.

South Africa, India and other developing countries have pushed for the decision after winning a waiver for Covid-19 vaccines at MC13. The Biden administration has avoided taking a public position on the issue, which is fiercely opposed by the U.S. pharmaceutical industry and the business community more broadly, but supported by groups on the left.

The WTO committee in charge of discussing intellectual property rights recently told the WTO General Council that it had been unable to reach agreement on the issue after more than 18 months of discussion. That could signal the end of the road for efforts to expand the waiver, but pharmaceutical industry officials fear it could still be approved by ministers at MC13 as part of the final horse-trading that occurs to reach some deal.

WTO accessions: One bright spot on the meeting’s agenda is the accession of two new members, Comoros and Timor-Leste, to the WTO. They will be the first new members since Liberia and Afghanistan joined in July 2016.

The combined population of the two countries is less than 2.5 million, so the accessions won’t mean much to world trade. Timor-Leste is the larger of the two, with an estimated population of about 1.3 million in 2021, while Comoros has less than 900,000 people.

Another 22 countries are currently negotiating the WTO, another statistic Okonjo-Iweala cites to refute talk that the group is becoming irrelevant. The number of applicants “speaks for itself in terms of the organization and the way that people and countries see it,” she said.