MINISTERIAL CONFERENCES

MC12 follow-up

At the 12th Ministerial Conference (MC12) in June 2022, WTO members secured multilaterally negotiated outcomes on a series of key trade initiatives – the so-called Geneva Package – comprising ten agreements, declarations and decisions. DG Okonjo-Iweala has urged members to start focusing now on the implementation of MC12 outcomes and to keep delivering results for people across the globe.

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MC12 outcomes

The Geneva Package was the culmination of efforts by WTO members to provide concrete trade-related responses to important challenges facing the world today.

Fisheries subsidies

The WTO Agreement on Fisheries Subsidies, adopted at MC12, marks a major step forward for ocean sustainability by prohibiting harmful fisheries subsidies, which are a key factor in the widespread depredation of the world’s fish stocks. For the Agreement to be operational, two-thirds of WTO members have to deposit “instruments of acceptance” at the WTO.

Members also agreed to continue negotiations on outstanding issues, with a view to making recommendations by MC13 for additional provisions that would further enhance the disciplines of the Agreement.

The Agreement prohibits support for illegal, unreported and unregulated (IUU) fishing; it bans support for fishing overfished stocks; and it ends subsidies for fishing on the unregulated high seas. Under the Agreement, members also committed to take special care and exercise due restraint when granting subsidies to vessels not flying their flag and when granting subsidies to fishing or fishing related activities regarding stocks where remaining levels are unknown.

Furthermore, the Agreement contains provisions on notification and transparency, under which every member is required to provide information relevant to the implementation of the Agreement.

Access the full text of the Agreement here.

A “peace clause” applies to developing members and LDCs under which dispute settlement will not apply for two years from the date of entry into force of the Agreement for subsidies contributing to IUU fishing as well as subsidies regarding overfished stocks that are provided for fishing within their exclusive economic zones.

In addition, members are required to exercise due restraint in raising matters involving an LDC member. Developing members with a share of the volume of global fish catch of not more than 0.8%, and LDCs, may provide notifications of fisheries-related information every four years instead of every two years.

Also pursuant to the Agreement, targeted technical assistance and capacity building is to be provided to developing members and LDCs to help them implement the Agreement. In support of this assistance, the Agreement provides for the establishment of a voluntary Fisheries Funding Mechanism.

The Agreement will enter into force upon acceptance of its legal instrument by two-thirds of the membership. Under the Agreement, members further agreed to continue negotiations on outstanding issues, with a view to making recommendations by MC13 for additional provisions that would further enhance the disciplines of the Agreement.

Many technically complex and politically sensitive issues were resolved in the Agreement, and the draft texts previously sent to ministers provide a strong basis for further negotiations. This “second wave” of negotiations is expected to be focused and able to deliver results. The Agreement provides for a maximum period to complete these negotiations of four years from entry into force of the Agreement.

WTO response to the pandemic

Members adopted a Ministerial Declaration on the WTO response to the current and future pandemics. This includes a waiver of certain requirements under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) concerning the use of compulsory licences to produce COVID-19 vaccines.

Members also agreed that, no later than December 2022, they will decide on whether to extend the waiver to cover the production and supply of COVID-19 diagnostics and therapeutics.

Relevant WTO bodies can already analyze lessons learned during the COVID-19 pandemic. That includes concrete issues regarding development, export restrictions, food security, intellectual property, regulatory cooperation, services, tariff classification, technology transfer, trade facilitation and transparency. A stocktaking exercise will take place yearly at the General Council until the end of 2024, based on the reports of those relevant bodies.

With regards the waiver, members can with immediate effect authorize the use of a patent required to produce and supply COVID-19 vaccines without the consent of the right holder. This includes ingredients and processes that are necessary for the manufacture of a COVID-19 vaccine.

Until 2027, members will be able to work to diversify vaccine production capacity and to enhance exporting production to countries in need, so that a future crisis in one region does not leave others cut off. This period will also allow them to have greater clarity regarding related options open to them for pandemic response, including the emergency use measures at their disposal.

Members agreed that a decision should be taken on whether to extend the waiver to cover the production and supply of COVID-19 diagnostics and therapeutics by 17 December 2022.

The waiver decision is compatible with the TRIPS Agreement framework, which already enables governments to limit the effect of patent rights through a range of mechanisms. This includes the right to grant compulsory licences (when the authorities allow parties to make, use, sell or import a product under patent without the permission of the patent owner).

The WTO membership at large will benefit from the increased level of global preparedness to COVID-19 and future pandemics, including through strengthened productive, scientific and technological capacity. Decisions adopted at MC12 will be key to developing solutions to public health crises beyond COVID-19, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, as well as neglected tropical diseases, and for diversifying manufacturing locations.

The waiver decision is intended for developing countries with no capacity to produce COVID-19 vaccines. Developing country members with existing COVID-19 vaccine manufacturing capacity are encouraged to opt out. The TRIPS Council keeps a record of such binding commitments by members pledging not to benefit from the waiver decision.

Food insecurity

The MC12 outcome package on agriculture comprised a Ministerial Declaration on the emergency response to food insecurity and a Ministerial Decision on exempting World Food Programme (WFP) humanitarian food purchases from export prohibitions or restrictions.

The WTO Secretariat will provide regular updates on trade and market developments while the Committee on Agriculture will launch a dedicated work programme in relation to agricultural reform and the concerns of net food-importing developing countries and least developed countries.

Both outcomes respond to demands from the international community for immediate action by WTO members to address food shortages and soaring food prices and ensure that the most vulnerable can access emergency food aid.

The Declaration underlines the strong commitment by WTO members to take concrete steps to facilitate trade, which plays a vital role in improving global food security, and to improve the functioning and resilience of global food markets. It reaffirms the importance of not imposing export prohibitions or restrictions on agri-food trade in a WTO-inconsistent manner.

The Declaration also provides that the WTO Secretariat will provide regular updates on trade and market developments while the Committee on Agriculture will launch a dedicated work programme to help net food-importing developing countries and least developed countries address food insecurity. The Committee on Agriculture has started taking steps to implement these decisions.

The WFP Decision was welcomed by World Food Programme Executive Director David Beasley: “This humanitarian exemption … will ensure that critical relief reaches the most vulnerable populations when and where needed.” DG Okonjo-Iweala said the Decision will make it easier for the WFP to “do its difficult job of feeding millions” suffering from acute hunger.

Due to remaining differences on some issues, including public stockholding for food security purposes, domestic support, cotton and market access, WTO members could not achieve consensus on a new roadmap for agricultural reform at MC12.

Nonetheless, DG Okonjo-Iweala acknowledged the vital importance of agriculture and noted “members' renewed sense of purpose". "They are determined to keep at it on the basis of existing mandates, with a view to reaching positive outcomes at MC13,” she said.

WTO members are expected to discuss the way forward and to consider how to rejuvenate agricultural negotiations.

E-commerce moratorium

WTO members agreed to maintain their current practice of not imposing customs duties on electronic transmissions and to intensify discussions among members on this topic. The moratorium will remain in effect until MC13 due to be held by the end of 2023 or until 31 March 2024 should MC13 be delayed beyond that date.

WTO reform

WTO members have agreed in the MC12 outcome document to undertake a comprehensive review of all of the WTO's functions in order to ensure the organization is capable of responding more effectively to the challenges facing the multilateral trading system. The review will be carried out through the WTO's General Council and its subsidiary bodies, with the goal of submitting possible reform proposals to MC13.

Ministers also agreed to talks on addressing concerns with respect to the WTO's dispute settlement system with the view to securing a fully functioning system by 2024.

WTO reform means different things to different people. For some, it means clarifying existing rules, or making them more effective, in order to achieve their original intended effect.  To others, it means changing the rules or adopting new ones in order to make the multilateral system more responsive to the evolving nature of trade. 

To an extent, this also means potential changes to the organization itself:  how decisions are made, how the WTO's various councils and committees operate, and how the WTO's dispute settlement system functions. In accordance with the decision by ministers at MC12, the reform discussions will be member-driven and will address the interests of all WTO members. The discussions will be conducted through the General Council and its subsidiary bodies.

That will be determined by the members themselves. Well before MC12, more than 30 proposals were presented by members addressing various issues that fall under the general reform umbrella. These included challenges in initiating, negotiating and concluding trade agreements at the WTO; strengthening the work of the WTO's regular bodies and committees as well as existing notification and transparency requirements; and special and differential treatment provisions for developing countries. Another issue which attracted a lot of attention was reform of the WTO's dispute settlement system and in particular the future of the WTO's moribund Appellate Body.

Members have been asked to reflect on how to take up the reform work, what to do with the proposals already on the table - including whether to re-cast them in light of the current mandate — and how best to move the discussions forward. The chair of the General Council is expected to start consultations with members on this matter in the autumn of 2022.

Ministers agreed at MC12 to review progress and consider decisions to be submitted to the next Ministerial Conference due to take place by the end of 2023. With regards to the specific issue of dispute settlement, ministers agreed to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all members by 2024

Reaffirming trade's role in environmental protection, as embedded in the WTO's founding principles, ministers noted the importance of the multilateral trading system to promote the United Nations Sustainable Development Goals. Ministers also reaffirmed the importance of providing support to developing and least-developed countries and the contribution of the WTO Committee on Trade and Environment as the forum for members to continue discussions on trade and environmental measures.

Also at MC12, groups of WTO members participating in environmental initiatives provided updates on their plans of action on plastics pollution, trade and environmental sustainability, and fossil fuel subsidies reform.

Ministers recognized the links between women's economic empowerment and economic growth, noting the work of the WTO and other organizations.

The three co-chairs of the Informal Working Group on Trade and Gender - Botswana, El Salvador and Iceland - issued a separate statement highlighting the achievements of WTO members  participating in this initiative and reaffirming their commitment to advancing gender equality in trade.

Other decisions

Ministers adopted a Sanitary and Phytosanitary (SPS) Declaration on responding to challenges that may impact international trade in food, animals and plants. The Declaration commits WTO members to launching a work programme to identify new challenges in the implementation of the WTO's SPS Agreement, with the aim of enhancing how the Agreement is applied.

The Sanitary and Phytosanitary Declaration for the 12th Ministerial Conference: Responding to Modern SPS Challenges acknowledges the profound evolution of the global agricultural landscape since the SPS Agreement was adopted in 1995. It also recognizes the role of the SPS Committee in responding to new issues affecting international trade in food, plants and animals.

Ministers agreed on the need to further enhance implementation of the SPS Agreement. The Declaration also underlines that proper implementation of the SPS Agreement supports rural livelihoods, facilitates trade and supports sustainable agricultural growth.

Global populations have expanded, as well as the movement of agricultural products to address changing population structures and distributions. Innovation in tools and technologies has greatly increased but at the same time climate change and increasing environmental challenges are adding stress to food production.

Sustainable agricultural practices and production systems have been improved, contributing to addressing climate change and biodiversity conservation. However, the spread of pests, diseases and disease-carrying organisms has increased the threat of antimicrobial resistance to human and animal health. There has also been an emerging trend in infectious diseases, especially zoonoses (infectious diseases that jump from animal to humans).

The Declaration instructs the SPS Committee to launch a work programme, open to all members and observers, to look at how the application of the SPS Agreement is being affected by the emerging challenges mentioned above.

The SPS Committee will have to pay close attention to how to facilitate global food security and more sustainable food systems, how to support basing SPS measures on scientific evidence and principles, and how to enhance safe international trade in food, animals and plants. It will also need to look at how to encourage cooperation with observer organizations and the international standard setting bodies, and how to increase the role and participation of developing and least developed country members.

Ministers mandated the SPS Committee to report on action undertaken under the work programme — with appropriate recommendations — to the 13th Ministerial Conference (MC13), tentatively scheduled to be held between December 2023 and March 2024.

Ministers adopted a decision reaffirming the commitment of members to the WTO's Work Programme on Small Economies, which seeks to address the particular challenges facing these economies.

Ministers decided to extend until MC13 the moratorium on so-called TRIPS  “non-violation and situation” complaints, which deals with situations where a government may complain it has been deprived of an expected benefit because of another government’s action, even if no agreement has been violated. Discussions on the topic are to continue, with recommendations to be made to MC13.

This relates to whether members should have the right to bring a dispute to the WTO if they consider that action by another member has deprived them of an expected benefit under the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), even if no specific TRIPS obligation has been violated.

Under Article 64.2 of the TRIPS Agreement, a “moratorium” was established prohibiting non-violation complaints on IP rights for the first five years after the establishment of the WTO in 1995, after which members were to make recommendations to the Ministerial Conference. The moratorium has been repeatedly extended since 1999.

The issue has been raised dozens of times at the TRIPS Council. But members have not been able to agree on the scope and modalities if non-violation and situation complaints were to apply to the TRIPS Agreement.

Developed members oppose further extending the moratorium. They consider that NVSCs are essential for maintaining the proper balance of rights and obligations within the TRIPS Agreement while helping to ensure that members do not circumvent or avoid their obligations. Most other delegations prefer a complete ban on NVSCs under the TRIPS Agreement. In their view, there is no place for their application in the area of intellectual property because it could create legal insecurity and curtail flexibilities granted in the TRIPS Agreement.

In the absence of an agreement, the only consensus possible has been recommending to successive Ministerial Conferences an extension of the moratorium for two additional years.

To date, only a dozen WTO dispute settlement proceedings involving NVSCs have been initiated. None of those complaints have been successful.

More information on the TRIPS non-violation issue is available here.

Geneva Package — in brief

A brief explanation of the decisions adopted by members at MC12.

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