Why What’s Going on Right Now at the WTO Matters

After many postponements, the 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) will take place June 12–15, 2022, in Geneva.

Media coverage has focused almost exclusively on whether governments will agree to waive provisions of the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement. The WTO’s TRIPS rules, which provide maximalist protections to Big Pharma’s patents, trade secrets, copyrights, industrial designs, and other “intellectual property,” are preventing developing countries from being able to expand the manufacturing of COVID-19 vaccines, treatments, and tests. This vaccine apartheid has likely led to the emergence of variants like Omicron, and thus led to the needless deaths of millions of people around the world, according to Nobel Prize-winning economist Joseph Stiglitz and a myriad of others.

The majority of developing countries proposed temporarily waiving these rules during the pandemic to prioritize global public health over private monopoly profit. The European Union, Switzerland, the UK, and the US have remained opposed — with only the US even supporting a temporary waiver on patents on vaccines. At this time, just 13 percent of people in low-income countries have been vaccinated.

The WTO’s rules literally protect the invented “trade” rights of billionaires to become multi-billionaires over the human rights of the poor to have access to life-saving drugs. It is an indisputable testament to the WTO’s fundamental brokenness that these rules remained in force throughout the pandemic. It is also evidence that the global rules system is broken, that the protection of patent holder’s rights prevailed over the protection of global health during a pandemic of such epic proportions.

The WTO Secretariat has done everything in its power to bully countries into accepting a deal, which would count as a “win” for the director-general (DG). However, experts who have spent decades in the trenches fighting for access to medicines believe that the current text, which is a counterproposal to the original waiver idea, will not result in the manufacture of one more vaccine or treatment, and thus must be dramatically overhauled. If opponents remain recalcitrant, it could actually be a step backward, and must be rejected.

As of this writing, it is not yet clear what the outcome will be. There are other proposals under the heading of the “WTO Response to the Pandemic,” which are more about expanding liberalization than saving lives. But developing countries are likely to reject any “response” that does not focus on removing the obstacles placed by the WTO itself to resolve the pandemic.

In addition, the US, the EU, the UK, and others can be expected to use the ministerial to boost criticism of the Russian invasion of Ukraine. It is not clear how this issue will affect the negotiations, but it will no doubt dominate the media coverage.

But much else is at stake at the 12th Ministerial, including remedies for the current food crisis and ongoing food insecurity, fisheries subsidies, democracy, development, and other vitally important issues.

Big Focus on Russia-Induced Food Insecurity, Short Shrift to Ongoing Food Security Crisis

The shortage of staples like wheat and sunflower oil, global supply chain issues, and the resulting increased inflation in food prices globally have greatly impacted debates on agricultural trade at the WTO.

Developed countries are proposing a declaration on trade and food security, including banning export restrictions. However, provisions in this declaration appear to focus on increasing trade in food as the solution, rather than on allowing poor countries to increase their own production.

Developed countries, which generally have the upper hand in markets, portray their pro-trade position as supporting food security. But at the same time, they have blocked agreements at the WTO on developing countries’ primary food security proposals, which involve freeing their domestic markets from damaging and unreasonable WTO control.

Over 100 countries have a long-standing demand to remove WTO obstacles to their ability to support domestic production for domestic consumption through public stockholding (PSH) programs. Current grossly unfair subsidy rules restrict poor countries like India from providing even as little as $300 USD per farmer in subsidies — for food that doesn’t leave the country — while allowing rich countries like the United States to provide $40,000 USD per farmer, even when the food produced is exported, and distorts global markets. Developing countries have repeatedly reiterated their demand that the MC12 respond to the ongoing food crisis that is daily life; ministers had previously mandated that they find a permanent solution to this PSH issue by MC12.

But rich countries, with the DG as their ally, are aiming to punt on this top concern of developing countries — as well as on other long-standing mandates to conclude issues like unfair cotton subsidies. Instead, they want to use the global food price crisis as a pretext for expanding WTO restrictions without addressing fundamental market asymmetries.

The most likely outcome will be continued hunger and deprivation for millions of farmers and poor people worldwide, without substantially changing the underlying factors driving the ongoing, or acute, food crises, according to the UN Special Rapporteur on the Right to Food.

Fish Subsidies Pressure Increasing

It is widely acknowledged that global fish stocks are collapsing due to overcapacity and overfishing by some countries. Through the Sustainable Development Goals (SDGs), world leaders mandated that WTO members agree to reduce subsidies and to do so in a way that recognizes Special and Differential Treatment (SDT), as many poor countries depend on small-scale fishers for sustenance and for livelihoods. SDT is an integral part of WTO architecture that acknowledges that those causing the greatest harm should take more responsibility.

Unfortunately, the current MC12 draft text fails to target those most responsible for historic overfishing, including large fleets that fish in distant waters.

At the same time, the text would harshly discipline small-scale fishers, including those in low-income or resource-poor countries by putting far too many restrictions on the use of SDT flexibilities. Rich countries that are responsible for the collapse in fish stocks are demanding that poor members would have to monitor and report on their fisheries management in ways that go beyond their capacity, in order to avail themselves of flexibilities. This is a typical maneuver in WTO negotiations that allows rich countries to pretend they are providing development flexibilities while actually preventing their utilization.

The proposal would also expand the WTO’s jurisdiction over fisheries management measures when the organization has no expertise in this arena. Negotiations have failed to consult small-scale fishers’ organizations, and have sidelined developing countries’ concerns.

This is why 84 global and national organizations of fisherfolk and development advocates recently sent a letter, stating:

We are calling on Ministers to make sure that any outcome on fisheries subsidies negotiations targets those who have the greatest historical responsibility for overfishing and stock depletion, excludes all small-scale fishers from any subsidy prohibitions, prevents the WTO from ruling on the validity of conservation and management measures of members, and upholds the sovereign rights of countries under UNCLOS [the UN Convention on the Law of the Sea].

WTO Crisis and “Reform” — in the Wrong Direction

The WTO has been in crisis for some time. Its dispute settlement function, once considered its crown jewel, has been paralyzed since the United States began blocking the appointment of new judges to its appellate body some years ago. But the institution has continued to govern world trade, even without the ability to enforce its own rules.

The graver crisis is that WTO rules have contributed to growing trends in inequality, food insecurity, and the climate crisis. Most countries that have experienced strong economic growth in the 27 years since the WTO’s inception have done so through integrating trade chains with China, not by integrating trade with the EU or the US, or by adhering to the WTO rule book.

Many citizens in developed and developing countries alike have grown tired of the model of corporate globalization embodied in the WTO, and are instead demanding more investments in national production and regulations for workers and the public’s interests. Supply chain shocks have made global over-dependence on hyper-globalization even more untenable.

Since the inception of the WTO, developing countries realized that the rules were too onerous and not fit for their level of development. They advocated for changes, and 21 years ago, all members agreed to negotiate a development agenda. For more than two decades, rich countries have blocked its resolution and now refuse to even show up for meetings.

But corporate boosters never let a crisis go to waste. They are proposing to launch new talks under the guise of “WTO reform” that would actually achieve the opposite. Their primary goal is abandoning multilateralism. They want to legitimize a new method of WTO negotiations on issues of interest to big business, without having to negotiate around pro-development concerns.

The most dangerous aspect of the “reform” agenda includes abolishing the fundamental multilateral mandate of the WTO, and instead legitimizing “plurilaterals” in which hyper-neoliberal governments can set new standards.

But so-called reform also includes creating new mechanisms to expand the direct influence of corporations at the WTO; permanently abandoning the mandated, long-unresolved issues of the development agenda; attacking developing countries’ ability to access flexibilities enshrined in the WTO, without which they never would have agreed to its existence; and expanding the WTO’s monitoring function in a way that would further constrain developing countries in using their development-centered policy space.

Like toxic blight that would not survive in the light of day, these talks are being convened in the shadows, under WTO-illegal “Green Room” processes from which the vast majority of WTO members have been excluded. But proponents spin wild claims that these may somehow renew the relevance of the WTO.

The “WTO reform” agenda will be portrayed as refocusing the WTO on emerging priorities like gender, environmental sustainability, and even labor rights. But developing country experts have warned that these are not the agenda’s goals, nor will they be its impact.

Trade unions and environmental groups in developed countries seeking those goals must start also campaigning for a resolution to development demands, or they will share the blame. For example, the new campaign for a “Peace Clause” regarding climate policies, must also demand green technology transfer so developing countries can also achieve climate-friendly industrialization.

Advocates of a more sustainable, fair, and democratic global economy should look toward the “Turnaround: New Multilateral Trade Rules for People-Centered Shared Prosperity and Sustainable Development” platform endorsed by over 200 national, regional, and global networks around the world. The document exposes the corporate-driven nature of the WTO and offers pathways for the fundamental transformation of the global trade system into one that would facilitate food security, jobs, access to medicines, and true sustainable development.

The WTO Could Become Even More Corporate-Driven

The WTO has always been driven by corporate interests; of all international agencies, it is the one that most marginalizes the voices of civil society representing communities affected by its decisions.

The MC12 represents the most dangerous play yet for expanded corporate influence over global economic rulemaking since the WTO’s founding nearly three decades ago. If rich country trade ministries, heavily influenced by big business lobbies, are successful in their efforts to launch “WTO reform,” it could legitimize new pathways for plurilateral agreements. These are already being undertaken through so-called Joint Statement Initiatives, or JSIs, which are incompatible with the multilateral rules of the WTO.

Pro-corporate governments launched the JSIs (among “coalitions of the willing”) after their agendas failed to secure agreement by the membership at the last WTO ministerial, in Buenos Aires in 2017. The three most important plurilaterals share a common underpinning of increased corporate control over the most important aspects of domestic economies and the global economy.

The plurilateral JSI on digital trade (pitched as “e-commerce for development”) would rig the rules of the global digital economy in favor of Big Tech (which came up with the idea of such an agreement). The Holy Grail for Big Tech is the guaranteed right to control the collection and manipulation of the world’s most valuable resource — data — for profit. It is racing to cement this control through binding international agreements before the world knows how valuable the data that they want to control is, with proposals aimed at securing rights to transfer and store data wherever in the world Big Tech wants. Communities and countries would be unable to access and use that data for the public good, or for digital industrialization strategies that may be the only way to ensure that shared prosperity results from technological progress.

The JSI on domestic regulation of services was announced in early December 2021. It would restrict how governments can regulate foreign services corporations operating in their countries. “The proposed rules will restrict how governments can perform their public responsibilities, seek to remove discretionary considerations, open national law-making to influence by foreign corporations and other governments, and impose costly and onerous compliance requirements with no guaranteed assistance, while limiting fees that governments can charge,” according to an analysis by University of Auckland professor of Law Jane Kelsey.

The JSI on investment facilitation would provide similar benefits to foreign firms wanting to invest in a given country as the domestic regulation agreement would give to services corporations, according to the Third World Network. It would also open a pathway for investing corporations to interfere in domestic policy-making processes, which is anathema to democracy.

While the plurilaterals on digital trade and investment facilitation are not yet concluded, countries are beginning to signal to the WTO that they will start implementing the JSI on domestic regulation. Most legislators, regulators, mayors, and community activists would be scandalized by the implications of these rules — giving foreign corporations rights akin to citizenship, to participate in deciding under which regulations they will operate — which is why they are happening at the WTO, the least transparent of the most powerful global institutions, under even more secrecy than usual.

Blame Game, Lopsided Concessions

Whatever the outcome, developed countries are already preparing a “blame game,” in which they present their efforts as reasonable compromises and developing countries as obstructionist. Rich countries that have blocked the TRIPS waiver will portray the current counterproposal text as a huge concession that means that developing countries should also “contribute” through permanent, extensive, harmful deals on agriculture, fisheries, and WTO reform. “Greenroom” meetings are already underway, with only select members invited, but with all members being pressured to accept the final outcome.

The MC12 will be a very high-stakes ministerial. For years, developed countries have delayed, obfuscated, and refused to even discuss developing countries’ mandated, key demands to reduce the WTO’s damaging control over their economies.

Nevertheless, rich countries and their allies in the secretariat are mounting an all-out pressure campaign to bully developing country negotiators to accept whatever is on the table and to acquiesce to expanding WTO dominance of the global economy. Any outcomes will be portrayed as “saving the WTO,” and will boost the DG’s reputation, but will likely only make the WTO even more pro-corporate and less flexible for development, and less fit to address the crises of inequality and climate change going forward.

The interests of all countries in a more sustainable and human-oriented, rather than corporate-rigged, global economy are at stake next week in Geneva. It will be a Herculean task for developing countries to resist the pressure, but civil society groups — from access-to-medicines experts, fisherfolk advocates, and trade unions, to development and public interest organizations — will be there to support their resistance and to call for a global economy that works for people and the planet.

The author is the Director of International Programs at the Center for Economic and Policy Research. The article was first published by the Institute for New Economic Thinking.