Updated February 9, 2021
WTO: Ministerial Delay, COVID-19, and Ongoing Issues
Overview
below). Some WTO activities and negotiations continue
Due to the Coronavirus Disease 2019 (COVID-19)
virtually. An informal ministerial was held virtually in
pandemic, the World Trade Organization (WTO) postponed
January 2021 and members, including the United States,
its 12th Ministerial Conference (MC12) planned for June
expressed an urgent need to move forward with finalizing
2020. The biennial meeting, which usually involves active
the new DG selection and postponed MC12.
U.S. participation, was widely anticipated as an action-
Select Ongoing Negotiations of U.S. Interest
forcing event for the WTO amid serious challenges facing
Fisheries. Members had committed to finish negotiations
the multilateral trading system. Some members had hoped
on fisheries subsidies by MC12, an achievement many view
key results for ongoing negotiations could help bolster the
WTO’s relevance. In addition, a dispute settlement crisis
as critical to upholding the WTO’s legitimacy. The chair
has continued talks virtually and issued revised
continues, with the Appellate Body ceasing to operate in
consolidated negotiated text for members to review and
December 2019, and no consensus on solutions. Broader
debate. The United States had supported equal obligations
reforms of the institution also remain under active
across members to limit subsidies that contribute to
discussion, including some U.S. proposals. While MC12
overcapacity and overfishing, with minimal flexibilities that
and other meetings were suspended, members are
some developing countries have been demanding. The
attempting to continue some WTO operations virtually.
Biden Administration has not yet taken an official position.
Members also face final selection of a new WTO Director-
General (DG). The post has been vacant since fall 2020,
E-commerce. Members extended the moratorium on
after the Trump Administration objected to Nigeria’s Ngozi
customs duties on electronic transmissions until MC12, but
Okonjo-Iweala, the candidate who had received the
it is unclear if the extension will be sustained thereafter,
majority of WTO member support. In early February, the
given some developing countries’ opposition. Separately,
Biden Administration announced support for her candidacy,
the United States and over 80 members are negotiating a
removing a major obstacle to her appointment.
plurilateral initiative on e-commerce. The co-conveners
noted progress in multiple areas such as e-signatures and
The WTO can play a unique role in coordinating global
consumer protection, while data flows issues are still under
trade responses, which could be critical in mitigating the
debate. They shared a consolidated text in December 2020
global economic and trade downturn in the wake of
and aim for substantial progress by MC12. The United
COVID-19. The WTO has committed to work with other
States seeks an ambitious, high standard agreement.
international organizations to minimize disruptions to cross-
border trade and global supply chains—in particular those
Agriculture. Some observers warned that MC12 would be
central to combatting the virus—while safeguarding public
deemed a failure without some deal on agricultural issues.
health concerns. It has sought to inform members of the
Talks have stalled in recent years, but members continue to
impacts of the pandemic on trade and encouraged them to
exchange views on issues, including public stockholding
notify the WTO of any trade-related measures taken in
and special safeguard mechanisms for developing countries.
response to COVID-19. The number of trade restrictions,
Given renewed attention to lack of compliance with WTO
including curbs on exports, increased significantly during
notification requirements (e.g., on domestic support, export
2020, raising debate about the policies’ economic impacts
subsidies), some experts see a transparency agreement as a
and consistency with WTO rules. At the same time, other
feasible outcome for MC12. Members are also discussing
countries have since lifted the temporary restrictions and
exempting World Food Programme purchases for
committed to trade openness.
humanitarian purposes from export restrictions.
Some Members of Congress have expressed support for
COVID-19 and WTO Reactions
ongoing WTO reform efforts, sought clarification on the
In the wake of COVID-19, the WTO DG emphasized,
positions of the Administration, and proposed trade-related
“Maintaining open trade and investment flows will be
legislation in response to COVID-19.
critical to protect jobs, prevent supply chain breakdown,
MC12 Delay and Implications
and ensure that vital products do not become unaffordable
for consumers.” The WTO’s latest forecast
After the declaration of COVID-19 as a pandemic,
estimated a 9%
Kazakhstan, the host for the WTO’s MC12, cancelled the
decline in global trade in 2020—a more optimistic outlook
planned meetings. A new date and venue have yet to be
than earlier assessments. While a recovery is expected in
confirmed given the ongoing pandemic. Following mixed
2021, the extent depends on the duration of the pandemic
and countries’ policy choices.
results from the last ministerial in 2017, the United States
and other WTO members look to MC12 as a turning point
WTO Agreements and Trade in Medical Products
to conclude some negotiations and announce significant
Several WTO agreements are relevant to health-related
progress on multiple initiatives, demonstrating the value of
policy, such as technical barriers to trade, sanitary and
the WTO. The delayed MC12 may serve as a critical forum
phytosanitary measures, services, and intellectual property
for taking stock of various WTO reform proposals (see
https://crsreports.congress.gov
link to page 2 link to page 2 
WTO: Ministerial Delay, COVID-19, and Ongoing Issues
rights (IPR). Others guide implementation of policies,
Delay in production and distribution of COVID-19 vaccines
including the WTO’s core principle of nondiscrimination
has led to calls by some countries to issue compulsory
and rules on subsidies. Specific commitments contributed to
licenses to manufacture generic versions. Compulsory
liberalized trade in medical products: (1) tariff negotiations
licenses are authorized under certain conditions under the
during the Uruguay Round; (2) a plurilateral Agreement on
WTO’s Trade-related Aspects of Intellectual Property
Pharmaceutical Products, updated in 2011; and (3) the
Agreement (TRIPS). A proposal by India and South Africa
expanded Information Technology Agreement in 2015.
for a temporary waiver of IPR for all coronavirus-related
medical products, vaccines, and treatments has yet to
WTO negotiations and agreements have improved market
achieve consensus among WTO members, being opposed
access for medical products, but barriers remain. An April
by members with research oriented pharmaceutical
2020 report by the WTO estimated $597 billion in annual
industries, including the United States. While individual
trade in critical medical products with limited availability
countries may resort to issuing compulsory licenses,
during the COVID-19 pandemic. For these products, the
successful reproduction of novel and complex generic
average applied most favored nation tariff is 4.8% (Figure
vaccines may be difficult.
1). For others, tariffs remain quite high (e.g., the average
tariff on hand soap is 17% and for some countries as high as
Ongoing Developments
65%). Tariffs on protective medical products range to 27%.
In addition to addressing the current crisis, WTO reform
Figure 1. Average Applied Tariff on Medical Goods
remains a key issue for the United States and other
members concerned with its institutional viability.
Appellate Body (AB) Reforms
On December 10, 2019, the AB lost its quorum to hear new
cases, following the U.S. blocking of new AB members and
the term expiration of the last members, effectively limiting
enforcement of first level DS panel decisions. Successive
U.S. administrations and some Members of Ciongress have
taken issue with AB decisions and practices. This stems
from a view that the AB exceeds its mandate by creating
new obligations not specifically negotiated, ignoring
mandatory deadlines for disposition of cases, making
impermissible findings of fact, treating prior AB decisions
as precedent, and opining on unrelated issues in decisions,
Source: WTO, Trade in Medical Goods in the Context of Tackling
among other issues. In the meantime, 22 WTO members,
COVID-19, April 3, 2020.
including the EU and China, initiated an interim appellate
mechanism to hear appeals among themselves.
Countries have also reacted to the crisis with new trade
Institutional Reforms
measures. According to Global Trade Alert, as of late 2020,
Proposals for reform of other WTO policies and procedures
more than 100 export restrictions on medical goods and
have garnered intensive debate. Some solutions have gained
medicines remained in force. At the same time, more than
support, while others remain controversial among members.
100 countries implemented reforms to ease imports of such
Key Trump Administration priorities included:
goods. Broadly, WTO agreements are flexible in permitting
emergency measures related to national security or health,
Reform of special and differential treatment (SDT).
but require that they be targeted, temporary, and
The United States seeks to have more advanced
transparent, and not “unnecessarily restrict trade.” In May
developing or emerging members forego the use of
2020, the G-20 Trade Ministers committed to these same
SDT. Brazil, Singapore, and South Korea committed to
values in a ministerial statement. Seven countries, led by
relinquish SDT; China and India continue to claim it.
New Zealand and Singapore committed to “maintaining
Notification requirements. The United States has
open and connected supply chains.” 42 WTO members also
proposed that members who do not provide required
pledged to remove emergency measures expeditiously. The
transparent notification of key decisions, such as
WTO has emphasized use of WTO-consistent tools to
subsidies, be subject to punitive measures (e.g.,
address critical shortages, such as unilaterally eliminating
deeming violators “inactive members”).
tariffs, expediting customs procedures, and subsidizing
Nonmarket economies. Since 2018, the United States,
production. It has cautioned against the long-term costs and
EU, and Japan have engaged in intermittent talks to
ripple effects of export curbs, as most major countries are
push for expanded disciplines on subsidies and
both exporters and importers of medical supplies.
practices of nonmarket economies. In 2020, the three
proposed to prohibit more types of industrial subsidies
Many analysts view more coordination in trade policy as
under WTO rules and otherwise constrict subsidies use.
critical. Some countries are considering principles for a
COVID-19 trade response and advocate for a plurilateral
The Biden Administration has yet to weigh in on WTO
agreement on medical goods. In December 2020, the
reform issues. For more, see CRS Report R45417, World
Ottawa Group of 13 WTO members introduced a “trade and
Trade Organization: Overview and Future Direction.
health” initiative calling for cooperation among WTO
members and a range of actions relating to exports, trade
Cathleen D. Cimino-Isaacs, Analyst in International Trade
facilitation, technical regulations, tariffs, and transparency.
and Finance
Rachel F. Fefer, Analyst in International Trade and
Finance
https://crsreports.congress.gov
WTO: Ministerial Delay, COVID-19, and Ongoing Issues
IF11513
Ian F. Fergusson, Specialist in International Trade and
Finance
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