WTO: 12th Ministerial, COVID-19, and Ongoing Issues

WTO: 12th Ministerial, COVID-19, and Ongoing Issues

Updated June 10, 2022
WTO: 12th Ministerial, COVID-19, and Ongoing Issues
Overview
pillars plus”: fisheries subsidies, agriculture, services, and
Due to the Coronavirus Disease 2019 (COVID-19)
the WTO response to the pandemic, plus WTO reform and
pandemic, the World Trade Organization (WTO) postponed
development issues. WTO members have tempered
its 12th Ministerial Conference (MC12) multiple times from
expectations, however, signaling persistent differences may
June 2020 to June 2022. The biennial meeting, which
prevent major announcements. In addition, some members
usually involves active U.S. participation, has been widely
have been unwilling to negotiate with Russia, given the
anticipated as an action-forcing event for the WTO amid
ongoing war in Ukraine.
serious challenges facing the global trading system. Some
Select Ongoing Negotiations of U.S. Interest
members hope key results for ongoing negotiations could
Fisheries. Members had committed to finish negotiations
help bolster the WTO’s relevance. In addition, a dispute
on fisheries subsidies by MC12, an achievement many view
settlement crisis continues, with the WTO’s Appellate Body
as critical to upholding the WTO’s legitimacy. Major
ceasing to operate in 2019, and no consensus on solutions.
provisions include prohibition of subsidies contributing to
Broader reforms of the institution also remain under
illegal, unreported and unregulated (IUU) fishing, fishing or
discussion, including some U.S. proposals. While MC12
fishing-related activities regarding overfished stock, and
and other meetings had been suspended during part of 2021,
overcapacity and overfishing. Members intensified
members continued some WTO operations virtually and
negotiations in May 2022, but differences remain in
resumed some in-person. WTO Director-General (DG)
particular on the extent of special and differential treatment
Ngozi Okonjo-Iweala, newly-appointed in February 2021,
provisions for developing countries and exceptions for
has faced the challenge of positioning the organization to
certain subsidies. The United States has generally supported
advance multilateral cooperation in the wake of the
equal obligations across members to limit subsidies, with
pandemic and the war in Ukraine. As MC12 approaches,
some exceptions, and also proposed provisions related to
she has urged members to bridge differences and deliver
forced labor on fishing vessels. See CRS In Focus IF11929.
results, while laying the groundwork for “what we need to
do for life after MC12 and moving towards MC13.”
E-commerce. Members extended the moratorium on
customs duties on electronic transmissions until MC12, but
Some view the WTO as playing an important role in
it is unclear if the extension will be sustained thereafter,
coordinating international trade responses to help mitigate
given some developing countries’ strong opposition.
the global economic and trade challenges exacerbated by
Separately, the United States and over 80 members are
the pandemic. The WTO committed to work with other
negotiating a plurilateral initiative on e-commerce. The
international organizations to minimize disruptions to cross-
parties aim to have a final draft in 2022, but would need to
border trade and global supply chains—in particular those
overcome contentious issues, including on cross-border
central to combatting the virus—while safeguarding public
data flows. The United States seeks an ambitious, high-
health concerns. It has sought to inform members of the
standard agreement. See CRS In Focus IF11194.
impacts of the pandemic on trade and encouraged them to
Agriculture. Some observers have warned that MC12
notify the WTO of any trade-related measures taken in
would be deemed a failure without some deal on
response to COVID-19. The number of trade restrictions,
agricultural issues. Talks have stalled in recent years, but
including curbs on exports, increased significantly during
members continue to exchange views on contentious issues,
2020, raising debate about the policies’ economic impacts
including on public stockholding and special safeguard
and consistency with WTO rules. At the same time, other
mechanisms for developing countries. Given renewed
countries have since lifted the temporary restrictions and
attention to lack of compliance with WTO notification
committed to trade openness.
requirements (e.g., on domestic support, export subsidies),
Some Members of Congress have expressed support for
some experts see a transparency agreement as a feasible
WTO reform efforts (H.Res. 382, S.Res. 101), sought
outcome for MC12. Members are also discussing
clarification on the Administration’s positions, and
exempting World Food Programme purchases for
proposed trade legislation in response to COVID-19.
humanitarian purposes from export restrictions. Global food
MC12 Delay and Implications
security concerns have heightened following Russia’s 2022
invasion of Ukraine due to disruptions to grains and other
Following the onset of the COVID-19 pandemic, members
markets. See CRS In Focus IF11906.
cancelled the planned June 2020 MC12 meetings. With the
emergence of new variants and travel restrictions at the end
COVID-19 and WTO Reactions
of 2021, MC12 was further postponed until June 12-15,
In the wake of the COVID-19 outbreak, the WTO DG
2022. With mixed results from the last ministerial in 2017,
emphasized, “Maintaining open trade and investment flows
members look to MC12 as an opportunity for decisions on
will be critical to protect jobs, prevent supply chain
new rules and taking stock of ongoing negotiations,
breakdown, and ensure that vital products do not become
demonstrating the value of the WTO. The DG summarized
unaffordable for consumers.” The WTO estimated a 10.8%
potential deliverables in what she characterized as the “four
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WTO: 12th Ministerial, COVID-19, and Ongoing Issues
rebound in global merchandise trade in 2021, but revised its
initiative calling for cooperation among WTO members. A
2022 estimate downward to 3%, due to the impact of the
key aim of MC12 is a clear WTO response to the pandemic
Russia-Ukraine war and continuing pandemic.
to potentially address issues such as export restrictions,
WTO Agreements and Trade in Medical Products
trade facilitation, regulatory coherence, tariffs, and
transparency. More broadly, such a framework would aim
Several WTO agreements are relevant to health-related
to lay the groundwork for the trading system to become
policy, such as technical barriers to trade, sanitary and
more resilient and better prepared for futures crises.
phytosanitary measures, services, and intellectual property
Another key component of this package would involve IPR
rights (IPR). Others guide implementation of policies,
including the WTO’s
related to COVID-19. Delay in production and uneven
core principle of nondiscrimination
acesss to and distribution of COVID-19 vaccines has led to
and rules on subsidies. Specific commitments contributed to
calls by some countries to issue compulsory licenses to
liberalized trade in medical products: (1) tariff negotiations
manufacture generic versions, or to waive certain IPR rules
during the Uruguay Round; (2) a plurilateral Agreement on
related to vaccines and other products or treatments. In May
Pharmaceutical Products, updated in 2011; and (3) the
2022, following talks facilitated by the WTO DG among
expanded Information Technology Agreement in 2015.
the United States, EU, India, and South Africa to find a path
WTO negotiations and agreements have improved market
forward on this issue, a proposal was issued on a “TRIPS”
access for medical products, but barriers remain. An April
patent waiver for vaccines, but debate over the final terms
2020 report by the WTO estimated $597 billion in annual
is ongoing and contentious. See CRS In Focus IF11858.
trade in critical medical products with limited availability
Ongoing Developments
during the COVID-19 pandemic. For these products, the
Institutional Reforms
average applied most favored nation tariff is 4.8% (Figure
In addition to addressing the ongoing crisis, WTO reform
1). For others, tariffs remain quite high (e.g., the average
remains a key issue for members concerned with its
tariff on hand soap is 17% and for some countries as high as
institutional viability. Proposals for reform of WTO policies
65%). Tariffs on protective medical products range to 27%.
and procedures have garnered intensive debate. In advance
Figure 1. Average Applied Tariff on Medical Goods
of MC12, members have disagreed on what a reform
outcome should entail. At a baseline, members hope to set a
path for future work, emphasizing the need for reform and
that the process be open, transparent, and inclusive, and
address interests of all members. U.S. priorities include:
 Special and differential treatment (SDT). The United
States seeks to have more advanced developing
members forego the use of SDT. To date, Brazil,
Singapore, and South Korea committed to relinquish
SDT; China and India continue to claim it.
 Notification requirements. The United States has
called for improved compliance with transparent
notification of policies and measures, such as subsidies.

The latest U.S. proposal issued in May 2022 did not
Source: WTO, Trade in Medical Goods in the Context of Tackling
include potential punitive measures for noncompliance.
COVID-19, April 3, 2020.
 Nonmarket economies. In 2022, U.S.-EU-Japan talks
were renewed to enhance WTO disciplines on
Countries reacted to the crisis with new trade measures.
subsidies and to better address practices of nonmarket
According to Global Trade Alert, by mid-2021 more than
economies where the state plays a major role.
200 export restrictions on medical goods and medicines
were implementated. At the same time, more than 100
Dispute Settlement Reforms
countries implemented reforms to ease imports of such
In December 2019, the Appellate Body (AB) lost its
goods. WTO agreements are generally flexible in
quorum to hear new cases, following the U.S. blocking of
permitting emergency measures related to national security
appointments of AB members, effectively limiting the
or health, but require that they be targeted, temporary, and
enforcement of first level DS panel decisions. Successive
transparent, and not “unnecessarily restrict trade.” In May
U.S. administrations and some Members of Congress have
2020, the G-20 Trade Ministers committed to these same
taken issue with AB decisions and practices, amid the view
values in a ministerial statement. Some countries, led by
that the AB exceeds its mandate by creating new
New Zealand and Singapore committed to “maintaining
obligations not specifically negotiated, ignoring deadlines
open and connected supply chains.” 42 WTO members also
for disposition of cases, making impermissible findings of
pledged to remove emergency measures expeditiously. The
fact, and opining on unrelated issues in decisions, among
WTO emphasized use of WTO-consistent tools to address
other issues. The United States has yet to agree to or
critical shortages and cautioned against the long-term costs
propose specific reforms to address its concerns. The EU,
and ripple effects of export curbs, as most major countries
with over 20 WTO members, initiated an interim appellate
are both exporters and importers of medical supplies.
mechanism to hear appeals among themselves.
Some countries have issued principles for a COVID-19
Cathleen D. Cimino-Isaacs, Specialist in International
trade response and advocated for a plurilateral agreement
Trade and Finance
on medical goods. In December 2020, the “Ottawa Group”
of 13 WTO members introduced a “trade and health”
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WTO: 12th Ministerial, COVID-19, and Ongoing Issues

IF11513
Rachel F. Fefer, Analyst in International Trade and
Finance

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