DEPUTY DIRECTOR-GENERAL ANGELA ELLARD
Honourable Members of Parliament,
Ladies and Gentlemen,
First of all, I would like to thank Secretary General Chungong as well as the co-chairs of the Steering Committee MEP Lange and Hon. Nadir for the invitation.
It is a pleasure and an honour to speak to you today about the state of WTO negotiations in the run-up to the 12th Ministerial Conference.
Having spent more than 25 years of my career serving the US House of Representatives, much of that as Chief Trade Counsel, I have great appreciation for the work that you do. I am convinced that engagement by Parliamentarians on WTO issues is vital to making our work effective, tangible, and relevant.
You are the key interlocutor between international institutions, such as the WTO, and the general public. It is through Parliaments that agreements negotiated at the WTO become national legislation. It is often through Parliaments that WTO Agreements are implemented and upheld. And it is through Parliaments that domestic concerns are conveyed to the international community.
Through law-making, oversight, budgetary allocation, and citizen representation, you play a unique and powerful role in many areas of the WTO's work, from public health issues to trade remedies to agriculture policy.
At the WTO, we are looking forward to further deepening our relations with Parliaments and MPs across the globe. One avenue is the Annual Parliamentary Conference on the WTO held at the WTO Headquarters here in Geneva, which we hope to revive after it was put on hold because of the pandemic. Another avenue is our Ministerial Conferences.
We very much want to continue our two-way conversation with you, in which you tell us your citizens’ priorities, and we partner with you to spread awareness and understanding of how and why international trade rules matter.
Last November, as part of parliamentary webinars on Trade and Health, our Director-General Ngozi Okonjo-Iweala spoke to you about the WTO's work on trade and health and preparations for our 12th Ministerial Conference (MC12) more broadly. It feels like it was just yesterday, but much has happened since then.
Our Ministerial Conference had to be postponed due to the emergence of the new Omicron variant of COVID. It was a very difficult decision made by our Members just a day before Ministers were to arrive. But it was the only decision that could have been taken in those circumstances.
While that was a frustrating moment, Members maintained their resolve to keep the momentum going. In fact, just a few weeks ago four key Members achieved a significant compromise on intellectual property rights for Covid vaccines — more about that in a moment.
On 23 February, WTO Members agreed to reconvene MC12 during the week of 13 June 2022.
As you know, the next day, on 24 February, a tragic war began in Ukraine, ending so many lives and inflicting immeasurable economic destruction and human suffering. And this war has had a significant impact on the global trading system and the WTO.
Needless to say, Ukraine will bear the heaviest burden of this war. Ukraine estimates that its long-term economic loss will reach $1 trillion. The IMF originally forecasted Ukraine's GDP growth this year to be 3.5%. According to our estimates, this number could decline by as much as a quarter.
However, the severe economic consequences of the war will reverberate far beyond Ukraine's borders. We are facing a global food crisis. Ukraine and Russia together may account for barely 2% of global GDP, and only 2.5% of merchandise exports, but they are key suppliers of food, energy, fertilizers, and certain metals. As a result, economic shocks from the war, such as higher food and energy prices, will upend lives around the world.
Among those in the greatest danger are dozens of poor countries and tens of millions of people in Africa, Asia, and the Middle East that purchase a large share of their wheat, sunflower, maize, and barley from Ukraine and Russia. Europe will be affected too as fields in Ukraine, Europe's breadbasket, risk lying fallow this year. The war is disrupting supply chains that have just begun to recover from pandemic-induced challenges. We must avoid an economic calamity. We must use cooperation on trade to minimize supply chain crunches, avoid export restraints, and cooperate on trade facilitation.
Given the grim outlook, the temptation to turn inward is great. But strengthening economic resilience will require more global cooperation, not less. By contrast, concentrating sourcing and production at home creates new vulnerabilities. This is the lesson we should have learned from the pandemic, and we must apply it now.
We feel the effects of the conflict at the WTO as well. Members regularly make statements in our meetings, some Members have withdrawn MFN tariff treatment, and trade sanctions and counter-sanctions have been introduced. At the same time, we see every day that Members are making an effort to remain pragmatic and allow the WTO to continue its regular substantive work and business operations.
And, as a multilateral institution, we must show by example why multilateralism is so needed, as a necessary instrument that brings us together to address global challenges. In fact, trade is part of the solution to the most pressing problems of the global commons.
To that end, we are actively preparing for our Ministerial Conference in June. We are envisioning a streamlined, business-like conference that will take place fully in our headquarters in Geneva — a conference that, despite its lack of pomp and circumstance, will show the power of multilateralism with significant and important outcomes.
Let me now turn to the substance of the negotiations. There are four main pillars for MC12: the pandemic response; fisheries subsidies; agriculture; and WTO reform.
First, regarding the pandemic response, with 2.8 billion people yet to receive a single dose, the world is set to miss the target of vaccinating 70% of the global population against COVID-19 by mid-2022. And access to vaccines remains inequitable. In countries like the United Arab Emirates, Portugal, Cuba, Chile, and Singapore, more than 90% of the population have received two doses. At the same time, only 14.4% of people in low-income countries have received at least one dose.
Vaccine inequity is not only morally abhorrent, but also economically dangerous, including to countries that thought they were out of the woods in the fight against the pandemic. The longer the virus circulates freely in parts of the world, the more likely it is that dangerous new variants will emerge and spread. It has become trite to say, but it is nonetheless true: no one is safe until everyone is safe.
There are two streams of our pandemic-related work. Under the first stream, we worked over many difficult weeks with a small group of key ministers (India, South Africa, the US, and the EU) to find a meaningful and acceptable compromise regarding intellectual property and Covid vaccines. There is still work to be done as we work urgently to cement this achievement. The WTO decides by consensus, so the compromise has to be accepted by the entire WTO membership to be binding.
The second stream of our pandemic work concerns the trade-related aspects of the pandemic response, such as trade facilitation, export restrictions, and regulatory cooperation. Members are working in various configurations to narrow down the differences.
Throughout the pandemic, many Members have stressed the need for a balanced, meaningful, and comprehensive WTO response to the pandemic, comprising both the trade-related and IP aspects. We are working very hard to achieve these results, and I am optimistic. You as legislators have an important role to play.
Let me now turn to fisheries subsidies negotiations. Concluding these negotiations is imperative from an environmental, economic, and humanitarian perspective. We are witnessing a sharp and alarming decrease in global fish stocks, from one third of stocks at risk when the negotiations began over twenty years ago to 50 percent now. Subsidies that encourage illegal fishing or lead to overfishing are a major cause of this problem. This is why we absolutely must finalize these negotiations. As the World Wildlife Fund has aptly put it, “Empty words now mean an empty ocean in the future.”
We were very close to an agreement back in November, although disagreements remain on some important issues, including about the nature and extent of flexibilities for developing Members. In recent months, Members have intensified their efforts to bring these negotiations to a close through small-group and informal meetings. Our goal is to bridge the gaps as much as possible before presenting it to the Ministers at MC12. The deal is within reach. We need to keep pushing to get the necessary political will to get it done. Here too, legislators are vital to reaching an agreement.
Negotiations on agriculture remain difficult. Members continue discussions on the basis of a draft text circulated in November last year by the Agriculture Committee Chair. Some Members consider the text to be a realistic basis for future negotiations and have insisted on the need to avoid backtracking. Other Members have highlighted what they perceive as insufficiencies and lack of balance, and have demanded that the text be significantly amended.
Public stockholding and domestic support remain key sticking points. Some Members would like to adopt a permanent solution to the issue of public stockholding for food security purposes at MC12. Others believe that further technical work is required and would like to see results in all the negotiating areas. We need to find a solution which strikes a careful balance between the two positions.
With respect to domestic support, Members agree that trade distorting assistance must be further disciplined. But they disagree on how exactly to achieve this objective.
Other topics, such as transparency, market access, export restrictions, and export competition, are also being discussed in an effort to reach an overall balanced outcome on agriculture.
WTO Reform and Dispute Settlement
Let me turn next to the important question of the WTO reform. While we are every day reminded of the value of the WTO to the global economy, we are also well aware that there is considerable scope to improve all three of its core functions: negotiation, monitoring, and dispute settlement.
A big part of strengthening the negotiating function is delivering results in the multilateral negotiations on the response to the pandemic and fisheries subsidies, which I have just mentioned. But many Members also want to broaden the basket of instruments for advancing rulemaking under the WTO umbrella. For example, we continue to see a range of plurilateral initiatives among like-minded Members, which these Members seek to integrate in various ways within the WTO system.
In addition, we must work through our WTO institutions to improve transparency and our function of monitoring trade developments and new laws, policies, and practices undertaken by our Members, which is of great importance in this era of trade turbulence.
It is unlikely that specific substantive outcomes on WTO reform will be agreed at MC12. But Members should be able to clearly signal political support to arrive at recommendations in this area for work post MC12.
This includes dispute settlement reform which, I know, is tremendously important for many of you. Indeed, the value of rules depends, among other things, on how effectively those rules can be enforced. That's why a well-functioning dispute settlement system is of vital importance to WTO Members and their stakeholders. And it's very clear that to function effectively, the dispute settlement system needs support and buy-in from all Members.
At this time, the Appellate Body is not functioning because of a lack of quorum. Different and even opposing perceptions about what the WTO's Appellate Body was meant to do, how it was meant to operate, and whether it should even exist represent a large part of what is behind the current impasse. With this portion of the dispute settlement system frozen, 24 decisions by dispute settlement panels have not been finalized and are in limbo. And although cases continue to be brought before panels, and Members are looking for alternative ways to resolve disputes, in the long term, the lack of finality — however the Members end up defining it — is not sustainable.
MC12 is an opportunity for Members to reaffirm their commitment to a binding dispute settlement system and to agree on the need for a post MC12 action plan.
In addition to the multilateral negotiations I've just described, there is an exciting new agenda being carried forward in the plurilateral joint statement initiatives.
- The services domestic regulation talks already delivered an agreement last December. We estimate that it will result in $150 billion in annual savings to services providers.
- The e-commerce negotiations are on track, and participants are aiming to secure convergence on the majority of issues by the end of the year.
- Investment facilitation negotiations are moving ahead.
- Three environmental initiatives — on plastics, fossil fuel subsidies, and climate and circular economy — were launched last December.
- And there are also initiatives seeking to make trade more inclusive by bringing more women and micro, small, and medium sized enterprises into regional and global value chains.
Ladies and Gentlemen,
The events of the past month are a poignant reminder of the importance of the rules‑based international order and multilateralism. A WTO that works and delivers is an essential component.
But a rules-based multilateral order doesn't happen by accident.
We have to build it.
Constantly renew it.
And I am confident that our Members are up to this job.
We need your help to make the world safer and more prosperous through trade. I ask you to further engage with your respective governments and legislators from other countries to help us deliver.
Thank you, I look forward to our discussion.