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Questions & Answers: Outcomes of the 12th World Trade Organization Ministerial Conference

Met dank overgenomen van Europese Commissie (EC), gepubliceerd op dinsdag 21 juni 2022.

What is the WTO Ministerial Conference?

The 12th Ministerial Conference of the World Trade Organisation (MC12) gathered Ministers from the 164-member organisation in Geneva from 13 to 16 June, after almost 5 years from the previous meeting. The Conference took place against the backdrop of a particularly difficult global economic and geopolitical environment. The EU was actively engaged with WTO members for months ahead of the Ministerial and played a pivotal role during the talks to help bring about strong outcomes.

What are the main outcomes of the Ministerial?

After several days of at times tense and difficult discussions, the Conference agreed major outcomes which respond to pressing issues, most notably a landmark agreement on fisheries subsidies, WTO reform, pandemic preparedness, food security and e-commerce. Members agreed to convene the next Ministerial Conference (MC13) no earlier than December 2023 and no later than March 2024.

What exactly was agreed on fisheries?

A meaningful multilateral agreement contributing to the protection of the oceans was achieved. The first part of the agreement on harmful fisheries subsidies delivers on the UN Sustainable Development Goal 14.6. It includes a strong prohibition of subsidies contributing to illegal, unregulated and unreported (IUU) fishing with unprecedented transparency provisions. A dedicated trust fund to provide technical assistance and capacity building for developing countries to implement the agreement was also announced. Secondly, it includes an absolute prohibition of subsidies for fishing on the unregulated high seas. This is a landmark prohibition for the most vulnerable areas lacking an established and coordinated fisheries management regime. And thirdly, the provision on overfished stocks will bring sustainability rules for subsidies regarding most vulnerable stocks in the first phase of the agreement. For this agreement regarding subsidies on overcapacity and overfishing to enter into force, negotiations on UN SDG 14.6 need to be concluded. The EU is fully committed to complete the agreement with the elements not yet agreed as soon as possible.

Why is a deal on fisheries subsidies so important?

This is the first time that the WTO has established a multilateral agreement to support sustainability. In a nutshell, it will clamp down on subsidies that lead to over-fishing. Under international law, it will now be illegal to subsidise vessels involved in illegal and unregulated fishing, subsidise fishing in unregulated areas of the high seas.

WTO rules to discipline harmful fisheries subsidies are crucial for the protection of the oceans and fish stocks. The absence of such rules jeopardises the communities that depend upon the oceans.

The objective of the agreement on fisheries substances is to deliver meaningful new multilateral rules targeting harmful subsidies.

  • It would eliminate subsidies to illegal, unregulated and unreported (IUU) fishing that is estimated to be 10%-20% of the world oceans' global catch, worth dozens of billions of euros.
  • It would ensure that subsidies that risk contributing to overfishing or benefitting fishing overfished stocks are subject to a sustainability test.
  • It would subsidies that promote distant water fishing per se and create an absolute prohibition on subsidies to fishing on the high seas outside regulated areas.
  • On top of all of this, it would bring an unprecedented degree of transparency to assist our collective efforts towards sustainable fisheries.

What are the next steps on fisheries subsidies?

For this agreement regarding subsidies on overcapacity and overfishing to enter into force, negotiations on UN Sustainable Development Goal 14.6 need to be concluded. The EU is fully committed to completing the agreement with the elements not yet agreed as soon as possible. The fact that there is a funding mechanism for technical assistance and capacity building to help developing countries implement sustainable fisheries subsidies will provide an additional incentive to move forward.

What was agreed on the WTO reform?

Ministers launched a concrete WTO reform process aiming for results by MC13, including on restoring a functioning dispute settlement system. This was one of the EU's key priorities for MC12.

Why is the reform of the WTO necessary?

The multilateral rules-based trading system has brought stability and predictability to global trading conditions and has been an engine of prosperity for many decades. Since its founding in 1995, the WTO has been at the centre of this system. The WTO must now be equipped to deal with evolving 21st century challenges. It is urgent to reform the WTO in its three functions: rule making, negotiations and dispute settlement.

What are the next steps on WTO reform?

The positive outcome of MC12 allows us to urgently work with our partners with a view to reaching substantive progress on reform by MC13. We aim to improve the WTO's role as a forum where negotiations can take place in a constructive and trust-based manner, and as a monitoring and deliberative body. In particular, we will work to restore fully functioning dispute settlement. The EU will once again be at the forefront of this essential work.

What was agreed on in response to the COVID-19 pandemic?

Ministers agreed on a Declaration on the WTO response to the pandemic and preparedness for future pandemics. This affirms their commitment to transparency, timely and comprehensive information sharing, and restraint in imposing export restrictions. Responding to the exceptional circumstances of the COVID pandemic, Ministers agreed on a number of clarifications and a waiver of certain obligations under the TRIPS Agreement. These will allow for the swift manufacturing and export of COVID-19 vaccines without the consent of the patent owner. At the same time, the agreed solution maintains a functioning intellectual property framework with incentives for investment, research and transfer of technology.

How exactly does the agreed pandemic response combine openness and intellectual property?

Open trade is crucial to fighting not just the current pandemic but also the pandemics of the future. Such openness includes transparency, limiting export restrictions, and promoting other measures that help trade flow easier and faster. Fair access and equitable global distribution of vaccines is crucial in the fight against the COVID-19 pandemic, especially in regions such as Africa that depend on imports of pharmaceutical products. At the same time, a functioning intellectual property framework is indispensable for fostering innovation and investment in research on COVID-19 and its variants, as well as other diseases. The solution on intellectual property contributes to strengthening and diversifying pharmaceutical production in regions such as Africa. It also defends the value that intellectual property rights provide.

What are the next steps regarding the pandemic response?

Members recognised the need to review the lessons learnt during the COVID-19 pandemic in all areas of interest, including transparency, export restrictions, services, trade facilitation, and intellectual property. Relevant WTO bodies will carry out the analysis of these lessons learnt, and they will report to the General Council on a yearly basis until the end of 2024.

What was agreed on food security?

Ministers adopted a Declaration on Food Security, which reaffirms the importance of avoiding export restrictions on food. Members also committed to facilitating trade and improving the long-term resilience of agricultural markets.

Furthermore, in a landmark achievement, Ministers decided to exempt the humanitarian purchases by the World Food Programme from export restrictions.

Regrettably, Members were not able to overcome their differences on a work programme for agriculture, in particular that certain members could not agree on further negotiations for a permanent solution regarding Public Stockholding programmes. This could have led to a balanced outcome on a crucial issue for food security.

Why does the Declaration matter?

The agreement on the food security package shows that the WTO is able to respond to the current exceptional circumstances in a timely and effective manner. This is particularly relevant now that many vulnerable Members are feeling the dramatic impact of reduced supply and high prices on world markets resulting from Russia's war against Ukraine and its blockage of Ukraine's grain exports.

What are the next steps on food security?

EU will continue constructive engagement with other WTO Members on food security issues as part of negotiations and work after MC12. The EU also remains committed to reaching a realistic, focused and balanced outcome on agriculture in the run up to MC13.

What was agreed on e-commerce?

The moratorium on customs duties on electronic transmissions (the ‘e-commerce moratorium') was extended, a critical win for the digital economy. WTO Members agreed to maintain the current practice of not imposing customs duties on electronic transmissions until MC13. The Members also agreed to reinvigorate their work under the Work Programme on Electronic Commerce, including the development-related issues under it, ahead of the next Ministerial.

What are the benefits of a moratorium on e-commerce?

Numerous studies have demonstrated the economic benefits of the e-commerce moratorium, which guarantees that electronic transmissions remain duty-free. It has been particularly beneficial for developing and least developed counties, and for large and small enterprises alike. With the rapid global digital transition, accelerated by the COVID-19 pandemic, the e-commerce moratorium has played a key role in providing legal certainty and predictability for both domestic digital economic activity and global production networks and supply chains.

What are the next steps on e-commerce?

The EU will work together with other WTO Members to ensure that electronic transmissions remain free of customs duties for the benefit of our businesses and consumers.

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