By Sofia Baliño, Senior Manager, Communications & Engagement, IISD

The long-awaited Twelfth Ministerial Conference (MC12) of the World Trade Organization (WTO) got underway on Sunday, 12 June 2022, marking the global trade body’s highest-level meeting in over four years after an unexpected series of delays caused by the COVID-19 pandemic. The coming days are slated to be defining ones for the institution in various ways, as the international community looks to trade ministers to see if they can reach consensus decisions that could help tackle some of the world’s most pressing sustainability challenges, while inspiring new momentum at and around the WTO for its longer-term work.

“At some point in time, we thought this ministerial would not happen and here we are,” said WTO Director-General Ngozi Okonjo-Iweala during the opening ceremony on Sunday afternoon. “Expect a rocky, bumpy road, with a few landmines along the way. But we shall overcome them,” she continued.

The ministerial conference is being held in Geneva, Switzerland, at the WTO’s headquarters. It is being co-hosted by Kazakhstan, given that the country’s government had originally offered to hold the meeting in Nur-Sultan before the pandemic complicated those efforts. Following the opening ceremony, heads of delegation convened throughout Sunday afternoon and evening, with over 100 WTO members and observers giving statements setting out their priorities for the conference and for the Organization’s longer-term future.

The subsequent days of the conference are due to see daily thematic sessions among WTO members, covering fisheries subsidies, agricultural trade and food security, the moratorium on customs duties on electronic transmissions, WTO reform, and the pandemic response. While the event is scheduled to close on 15 June, ministerial conferences have often run over time in years past, and whether this one will follow suit remained an open question at the time of this writing.

This is a time to demonstrate that multilateralism works. A time to demonstrate that the WTO can deliver for the international community, and the people we serve.

— WTO Director-General Ngozi Okonjo-Iweala 

At the opening ceremony, the WTO Director-General noted that success, especially now, would be vital for the institution amid an international landscape that includes the fallout from the devastating COVID-19 pandemic, a rapidly escalating hunger and food security crisis, and the ongoing war in Ukraine.

“This is a time to demonstrate that multilateralism works. A time to demonstrate that the WTO can deliver for the international community, and the people we serve,” said Okonjo-Iweala.

Overcoming a “trust deficit” amid a changed landscape

On Sunday, the WTO chief also nodded towards the challenges that the Organization’s members have been working to overcome over the past several years, especially in the wake of the last Ministerial Conference, held over four years ago in Buenos Aires, Argentina. That event saw members struggle to make headway on the fisheries subsidies negotiations, a planned work programme on agriculture, and other items on the multilateral agenda. The conference also nearly failed to renew a long-standing moratorium on customs duties on electronic transmissions, though a temporary resolution of that matter was achieved in the final stretch of the conference.

The momentum at that event instead came largely from the launch of several “joint statement initiatives,” or JSIs, from groups of WTO members seeking to undertake concerted work on select topics. These include trade and women’s economic empowerment, investment facilitation, electronic commerce, domestic regulation in services, and micro-, small, and medium-sized enterprises (MSMEs). Since Buenos Aires, the JSIs have seen intense activity across the board, including a negotiated outcome on domestic regulation in services that was endorsed by participating members in December 2019. New JSIs have also been launched on trade and environmental sustainability, plastic pollution and environmentally sustainable trade, and fossil fuel subsidy reform.

Many of the problems facing the multilateral negotiations – in WTO jargon, or those talks that involve the full membership, rather than a subset of countries – predated the Buenos Aires event, amid multiple missed deadlines and infrequent successes at ministerial conferences. “A trust deficit took its toll,” Okonjo-Iweala said on Sunday, one which affected the Buenos Aires meeting and permeated future conversations in Geneva. The work underway in recent years has sought to address that trust deficit within the multilateral negotiations.

“Today, with history looming over us, with that multilateral system seemingly fragile, this is the time to invest in it, not to retreat from it. This is the time to summon the much-needed political will to show that the WTO can be part of the solution to the multiple crises of the global commons we face,” Okonjo-Iweala urged ministers.

“The task at hand is clear: there are many issues on the table and we have little time to address them,” said Timur Suleimenov, First Deputy Chief of Staff of the President of Kazakhstan and MC12 Chair, exhorting members to show “flexibility and the political will to get the job done” over the coming days.

New draft fisheries text in the spotlight

One of the headline issues this week is the push to strike a deal that would, if agreed, set binding disciplines on subsidies to illegal, unreported, and unregulated (IUU) fishing; subsidies regarding overfished stocks; and subsidies contributing to overcapacity and overfishing. In recent weeks, negotiators in Geneva have been undertaking intense work to reach consensus on some of the pending items still bracketed in the draft text released in November 2021, while environmental campaigners have been building public support for such a deal around the world.  

The fisheries negotiations have been underway for over 20 years as one of the items within the overarching Doha Development Agenda launched in late 2001. While that negotiating process, known also as the Doha Round, has largely stalled, some deliverables have been finalized from that agenda, including the WTO’s Trade Facilitation Agreement. The fisheries negotiations have been among the most active from that process in recent years, especially given the adoption of the 2030 Agenda for Sustainable Development and its 17 SDGs, with SDG target 14.6 calling specifically for the successful conclusion of those talks.

With Stockholm+50 drawing renewed attention to the UN Decade of Action for achieving the SDGs and the upcoming UN Ocean Conference seeking to inspire momentum for achieving the targets under SDG 14 (life below water), 2022 is proving to be a major year for international diplomacy on ocean health. That was a dynamic not lost on the audience in Geneva this week. “The UN Ocean Conference is two weeks from now, and the world has sent word that they will demand accountability from the WTO there,” said Okonjo-Iweala during the opening ceremony.

Trade ministers now have a new version of the fisheries agreement draft text to work from, with Colombian Ambassador Santiago Wills circulating the updated document on Friday, 10 June, following the “Fish Decision Week” of meetings held in Geneva. Wills is the chair of the fisheries subsidies negotiations.

The good news is that on some issues that had appeared intractable, the draft Agreement presents a clean solution that came from the negotiating process.

— Ambassador Santiago Wills of Colombia, Chair of fisheries subsidies negotiations

“I must emphasize that this is not an agreed document. In some places the draft text is my best attempt to suggest an outcome that I think is most likely to attract consensus,” said Wills in presenting the latest version. “The good news is that on some issues that had appeared intractable, the draft Agreement presents a clean solution that came from the negotiating process,” he continued.

Speaking to reporters on Sunday at the Geneva Press Club, fisheries experts weighed in on what a completed agreement could mean for food security, marine ecosystems, and livelihoods. A fisheries subsidies deal, several noted, would not just fulfill the ambition of SDG target 14.6. It would also help in fulfilling SDG 2 on ending hunger sustainably and SDG 8 on decent work and economic growth, to name a few examples. Experts also highlighted the work that remains in the coming days to strike a deal, based on the latest draft agreement text from 10 June.

Over the coming days, key issues to watch include the negotiations on Article 5 of the draft text. That “is probably where the real action is,” said Alice Tipping, IISD’s Lead on Fisheries Subsidies and Sustainable Trade. She notes that this article, which holds most of the text’s very few remaining brackets, sets out those subsidies considered “most at risk of contributing to overcapacity or overfishing and those are prohibited, unless a government has measures in place to keep the stocks fished at a sustainable level.”

In the context of that prohibition, members are also ironing out what the special and differential treatment (S&DT) provisions of the deal – namely, exemptions, transition periods, and any other flexibilities for developing and least developed country members – will ultimately look like. Tipping notes, for instance, that members are weighing how long S&DT provisions that are specific to least developed countries (LDCs) will still apply after a member graduates from LDC status, or the length of the transition period for developing countries for providing subsidies for commercial fisheries before those subsidies must be paired with fisheries management measures.

While work still remains, the current draft text shows an unprecedented level of alignment among WTO members in this negotiation, according to Isabel Jarrett, Manager, Reducing Harmful Fisheries Subsidies at The Pew Charitable Trusts. Given that there are roughly ten brackets left in the draft text, down from approximately two dozen last November, “that shows a real progress towards consensus and in order to do that, you need all members working together, in small groups, in bilaterals, to try to resolve issues,” she notes.

Draft texts circulated on pandemic response, agriculture, food security

Other negotiating areas where ministers will attempt to reach consensus decisions this week include the WTO’s response to the COVID-19 pandemic, particularly on whether to adopt a waiver to some of the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). This waiver, if adopted, would aim to make it easier to enable better access to and distribution of “health products and technologies,” such as vaccines, and otherwise curb some of the pandemic’s continued impacts.

The waiver negotiations have revived longstanding debates over whether the WTO’s existing intellectual property rules provide sufficient flexibilities for members to respond to public health situations. The negotiations have also prompted the question over whether the emphasis of the WTO’s pandemic response efforts should be primarily on intellectual property matters, on the operation of supply chains and the flow of merchandise trade across borders, on facilitating services trade, or all of the above.

A draft decision on the WTO’s pandemic response was circulated on 10 June, with language covering regulatory cooperation, trade facilitation, building “productive, scientific, and technological capacity across the world” for better tackling current and future health crises, trade in services, the impact of the pandemic on tourism, and various other topics. Paragraph 14 of the draft decision includes a placeholder bracket for the result of the negotiations for the “TRIPS waiver,” which remained ongoing at the time of this writing, as members mull over the waiver’s scope and ultimately whether it is the right tool for the task of pandemic response.

There are also three draft decisions on the table relating to agriculture, food security, and whether or not to impose export prohibitions or restrictions on foodstuffs purchased from non-commercial humanitarian purposes by the World Food Programme (WFP). One of these is a draft ministerial decision on agriculture, which is meant to guide and provide momentum for future negotiations in this area, especially on topics such as domestic support, public stockholding for food security purposes, market access, the special safeguard mechanism, export restrictions, export competition, cotton, and transparency. These are all famously thorny topics with long histories, both as part of the Doha Development Agenda and in the context of the WTO’s Agreement on Agriculture, whose Article 20 requires members to continue the reform process towards the long-term objective of substantial progressive reductions in support and protection.

Yet while negotiators have struggled to make headway on negotiated outcomes in these areas, the underlying concerns around agricultural trade and food security have drawn increased attention in recent months amid warnings of food price spikes, shortages of crucial food staples and fertilizers, and the imposition of emergency measures by governments in response to immediate food security needs. These warnings have grown in frequency and urgency in light of the parallel pressures of the COVID-19 pandemic, climate-related events, and the war in Ukraine.

The two other draft ministerial decisions refer more specifically to these concerns, with one dedicated to food security and promising “concrete steps to facilitate trade and improve the functioning and long-term resilience of global markets for food and agriculture,” while keeping in mind “the specific needs and circumstances of developing country members, especially those of least-developed and net-food-importing developing countries.” Among other pledges, the draft decision includes the intention of WTO members to circumscribe the use of emergency measures so that these are short-term, have minimal impacts on trade, are focused on addressing only the need at hand, and are made publicly known at the WTO and are put into place in accordance with global trade rules.

The other draft ministerial decision would commit WTO members to “not impose export prohibitions or restrictions on foodstuffs purchased from non-commercial humanitarian purposes by the World Food Programme,” while including the caveat that this would not preclude members from taking steps for safeguarding their own country’s food security needs.

WTO reform and the road ahead

Another crucial item to watch at MC12 will be conversations about the process towards “WTO reform,” a term that has grown in use over the years as various groups of WTO members have outlined topics that they would like to see added to the negotiating agenda, such as rules on industrial subsidies, and aspects of the Organization’s current functioning that they would like to see improved.

Also under consideration over the coming days will be the content and nature of the MC12 ministerial declaration, and whether a ministerial declaration will be agreed alongside any decisions adopted at the conference – or if the ministerial conference chair will instead need to release a statement or summary under his own responsibility, which normally occurs in cases where consensus on a declaration is not possible.

“It has been close to a decade since ministers agreed to a ministerial declaration,” said MC12 Chair Suleimenov on Sunday, noting the value of having that political guidance, by consensus, for the WTO’s future work.

Ultimately, the trade community and the wider world of international policymakers and influencers will be looking to MC12 to see whether the outcomes and conversations that take place in Geneva this week set the stage for a promising new chapter in the WTO’s history, and for sustainable development at large.