In the first high-level meeting of the World Trade Organisation (WTO) since 2017, representatives from member countries met in Geneva in June 2022 for the 12th Ministerial Conference, where they signed a landmark series of agreements on food exports, illegal fishing, intellectual property (IP) rights for Covid-19 vaccines and Customs duties on electronic transactions.
Food Exports & Illegal Fishing
One of the most pressing global challenges is food security. Food prices have reached all-time highs, while the costs of agricultural and production inputs have also risen considerably. This has raised concerns about food security, particularly in net-importing emerging markets – some of which have restricted food exports to bolster domestic supply. To address the situation, the WTO lifted export restrictions on foodstuffs purchased by the UN World Food Programme for non-commercial humanitarian purposes, although countries will still be allowed to restrict exports to ensure local food security.
Another important development was an agreement to curb subsidies for illegal, unreported and unregulated fishing, as well as for overfishing and vessels fishing in unregulated high seas. The agreement has been described by supporters as key to reversing collapsing fish stocks around the world, although critics say the measures do not go far enough and question the impact they will ultimately have on global fish stocks.
Covid-19 Vaccine IP Rights
Perhaps no issue has divided the world’s developed economies and emerging markets more prominently than the distribution and production of Covid-19 vaccines. To help address the so-called vaccine divide, the WTO agreed to a partial waiver of IP rights for the jabs, giving emerging markets a chance to produce generic versions for five years.
While many have welcomed this, critics note that the long delay has cost lives, and the waiver might not be able to address the global vaccine glut. As of May 2022, 15.2bn doses of Covid-19 vaccines had been produced, of which 6.2bn were set to be traded. Of these, an estimated 2.1bn excess doses were at risk of being destroyed upon expiration. There was also criticism that the IP waiver did not cover therapeutics and diagnostics that could aid in the fight against the virus. The WTO pledged to revisit this decision in six months.
The last agreement extended a moratorium on applying duties to electronic transmissions – software, emails, text messages, digital music, movies and more – until at least 2023. The WTO agreed not to impose duties on such transmissions in 1998; however, the digital economy has seen exponential growth since then, with global internet protocol traffic in 2022 alone expected to exceed all traffic up to 2016, according to the UN Conference on Trade and Development’s “Digital Economy Report 2021”. The US and China account for most of the world’s data, including half of its hyperscale data centres and 90% of the market capitalisation of the world’s largest digital platforms.
Cross-border transmissions to emerging markets, including data-gathering on citizens, are essentially free for international companies, which many have argued has created a digital divide that emerging markets are eager to bridge. A recent paper estimated that developing countries and the so-called least developed countries lost out on $48bn and $8bn in respective potential duties on 49 digitised products in 2017-20.
The Covid-19 pandemic sparked a wave of regionalisation in trade, ranging from the China+1 business strategy and nearshoring, to a slew of major regional trade deals. Against this backdrop – and in the context of persistent challenges related to food, health and the climate – the new WTO deals have been celebrated by supporters as a win for globalisation, a response to the doubts about its capacity to address international challenges.
In addition, the WTO has agreed to initiate a series of internal institutional reforms to ensure the organisation remains relevant in the future, including reviving the body’s dispute-resolution system within two years.