Nations pull WTO back from the brink with vaccine, fishery deals

Highlights:

• Trade packages break WTO's seven-year negotiating drought
• WTO deals include terms to help alleviate looming food crisis

The world's top trade ministers on Friday approved a historic package of accords -- including the reduction of fishery subsidies and a loosening of vaccine-production limits -- after marathon talks that a day ago looked for many delegates to be destined for failure.

The agreements break the Geneva-based trade body's seven-year negotiating drought and avert a damaging impasse for an organization that's struggled to gain its footing after four years of attacks under former President Donald Trump, a pandemic, strained supply chains and Russia's war with Ukraine. 

The alignment of the 164 members of the WTO, whose mission is to promote peace and prosperity through closer economic integration, is all the more impressive considering two of them -- Russia and Ukraine -- are currently fighting a war.

The outcome emerged after a grueling all-night negotiating session at the WTO's headquarters on the shores of Lake Geneva and provides a sufficient basis for WTO Director-General Ngozi Okonjo-Iweala to claim her first negotiating success after just more than a year on the job. The pacts could put new momentum behind the WTO and its ability to govern the $28 trillion global trading system.

The agreements "show the world that WTO members can come together across political faultlines," Okonjo-Iweala told reporters on Friday morning. "There were many moments when I feared we would come out of MC12 empty handed," she said, referring to the 12th ministerial conference. 

Vaccine IP Waiver

Trade officials agreed to water down the WTO's intellectual-property protections for Covid-19 vaccines -- a key agreement that Okonjo-Iweala said was necessary to end the "morally unacceptable" inequity of vaccine access in poorer nations. 

But the negotiation took so long and the global vaccine-manufacturing effort worked so quickly that the WTO's final deal may not have a meaningful impact on the production of Covid-19 shots at time when there is a global glut of jabs. 

As of May 2022 there were 2.1 billion excess doses of Covid-19 vaccines and the production of vaccines has consistently outpaced the number of jabs administered, according to data from the the European Federation of Pharmaceutical Industries and Associations. 

"The premise of an intellectual-property waiver for Covid-19 vaccines was flawed from the outset," said Thomas Cueni, the director-general of the International Federation of Pharmaceutical Manufacturers and Associations. "To this day, there is no evidence that IP has been a barrier to Covid-19 vaccine production or access." 

Fish, E-Commerce

WTO members separately agreed to a scaled-down agreement to curb harmful government fishing subsidies, fulfilling a key 2015 United Nations sustainability target aimed at slowing the rapid depletion of global fish stocks. 

The accord, which sets new limits on subsidies for illegal, unreported and unregulated fishing, aims to improve the jobs, economies and communities that depend on global fish stocks. The deal will expire four years after its entry into force unless WTO members agree to extend the restrictions to activities that contribute to overfishing and overcapacity. 

WTO members also agreed to temporarily renew the WTO's 24-year-old moratorium on e-commerce duties -- which averts the prospect of new tariffs on the digital economy after India and other developing nations threatened to scuttle the agreement. 

There were fears that if the 1998 accord were to lapse, it could open a new regulatory can of worms that may result in higher consumer prices for cross-border Amazon.com purchases, Netflix movies, Apple music, and Sony PlayStation games.  

"There was a lot of understanding amongst each other. There was a lot of sensitivity to each other's concerns and needs," Indian Commerce Minister Piyush Goyal told reporters. "The outcomes of the MC12 are being watched by the world as a signal that the multilateral order is not broken," he said.

Food Security

Trade ministers agreed to language aimed at mitigating the impact of a looming global food crisis and pledged to deliberate India's demands to water down the WTO's subsidy rules for public stockholding programs aimed at feeding poor citizens. 

While WTO rules permit nations to buy food to help feed poor citizens, they restrict programs that do so by exclusively sourcing from local farmers, and prohibiting food exports from these programs. 

India has long been concerned that its program, which buys exclusively from Indian farmers and has exported in the past, could be challenged at the WTO as illegal.

WTO members will now work to resolve India's concerns on the matter by their next ministerial conference. 

Disclaimer: This article first appeared on Bloomberg, and is published by special syndication arrangement.