BL Explainer

What’s the deal struck at the 12th WTO Ministerial?

Amiti Sen | Updated on: Jun 19, 2022

istock/a-poselenov | Photo Credit: a-poselenov

Trade Ministers from the 164-member WTO managed to arrive at a consensus on a modest trade package at MC-12 in Geneva, covering a number of important areas although commitments in some did not run deep. The major areas of the Geneva package include: a temporary TRIPS waiver on vaccines to tackle the Covid-19 pandemic; a decision on disciplining fisheries subsidies; a consensus on exempting World Food Programme purchases from export restrictions; and an extension of moratorium on customs duties on e-transmission.

Why is it being called historic? The agreement has been hailed by the WTO as historic as It is a trade deal that has been arrived at seven years after the last trade package was approved at the Nairobi Ministerial Conference in 2015. Also, the deal almost appeared to be collapsing on the last day of the extended ministerial and was saved through intense all-night deliberations.

How significant is the TRIPS waiver and what are the critics concerned about?

For five years, the waiver would allow all countries the flexibility to issue authorisations for the manufacture of patented COVID vaccines without the right holder’s consent even if they don’t have a compulsory licence regime in place. However, this has not been extended to therapeutics and diagnostic tools that India and South Africa were insisting on for going beyond preventive care. Another big concern is that the waiver is only applied to patents and not to other kinds of IP rights such as trade secrets and copyrights and may thus not help local manufacturers to access the required knowhow to manufacture a vaccine.

What are the main features of the agreement on fisheries subsidies and the areas of compromise?

The fisheries agreement has put curbs on subsidies that contribute to illegal, unregulated and unreported (IUU) fishing. The final document has paragraphs removed that related to curbs on subsidies contributing to overcapacity and over-fishing within the Exclusive Economic Zones (EEZs). This means that WTO members, both developed and developing, will not have to bring down subsides given to fishers fishing within 200 nautical miles of the shore. This will be further reviewed in four years.

What does World Food Programme exemption mean?

Singapore had floated the proposal of exempting purchases made by the WFP from any export restriction in 2018 to ensure global food security. This was agreed upon at MC12 with a simple caveat — it shall not be construed to prevent the adoption by any member of measures to ensure its domestic food security.

What has India gained through the deal?

India’s gains have been limited as there has been little movement in the key area of finding a permanent solution for public stock-holding. Although India had negotiated a peace clause earlier, which protects it against action from member-countries in case its food procurement (MSP) subsidies breach the existing cap of 10 per cent of total produce, its stipulated conditions are difficult to meet.

India did manage to protect fishers operating within the EEZ from subsidy cut commitments. However, this exemption is not in the form of special and differential treatment for developing countries but has been extended to all. This steals the advantage that was initially envisaged by India for its own fishers.

On TRIPS, the limited waiver on vaccines is only a small gain for India which already has a compulsory licence regime in place. Moreover, therapeutics and diagnostic tools have been excluded. Waiver on trade secrets and copyrights were also not extended.

India agreed to exempt WFP purchases from export restrictions but its demand of allowing G2G exports for humanitarian purpose from public stocks was blocked.

What has the West gained?

The Western countries managed to get the moratorium on customs duties on e-commerce extended till up to March 31 2024, which will greatly benefit their industry. The agreement on patent waiver has given them the comfort of claiming that they have acted on the long-pending proposal without actually ceding much ground in crucial areas such as therapeutics and diagnostic tools as well as trade secrets.

They have also got an agreement on exempting WFP purchases from export restrictions by just giving an assurance that this would not prevent adoption of measures to ensure domestic food security.

Published on June 19, 2022
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