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TWN
Info Service on WTO and Trade Issues (Dec25/23) Geneva, 19 Dec (D. Ravi Kanth) — The much-anticipated year-end General Council (GC) meeting at the World Trade Organization concluded on a sombre note on 18 December, setting the stage for a likely stormy 14th ministerial conference (MC14), to be held in Yaounde, Cameroon, on 26-29 March next year. The marathon three-day meeting ended without progress on several issues that the WTO Director-General, Ms Ngozi Okonjo-Iweala, had sought to conclude in Geneva rather than send to trade ministers at MC14. That plan, however, appears to have evaporated amidst sharp disagreements and little to no convergence, said people familiar with the development. On 18 December, the United States, Switzerland, and Thailand appeared to have blocked a request from Colombia to extend the moratorium on TRIPS non-violation complaints, said people familiar with the development. On a separate issue concerning the accession of Ethiopia and Uzbekistan to the WTO at MC14 – which was supported by many members at the GC meeting – the US apparently made it clear that technical progress, rather than a timeline, would determine the conclusion, said participants familiar with the proceedings. Meanwhile, the US, which was earlier placed on the list of countries facing administrative measures for non- payment of its annual membership dues, has now been removed from the list following its payment for 2024, said participants familiar with the proceedings. In another matter, concerning the permanent special and differential treatment accorded to the US through the Jones Act, China and Korea called for the termination of this exclusive flexibility, said people familiar with the development. TRIPS MORATORIUM In its proposal (WT/GC/W/976) circulated on 4 December, Colombia explained that “in general, disputes in the WTO involve allegations that a country has violated an agreement or broken a commitment.” However, it noted that in some situations, a member can go to the Dispute Settlement Body even when an agreement has not been violated, in what is referred to as “a non-violation complaint.” Such a complaint is allowed if a member can show that “it has been deprived of an expected benefit because of another government’s action, or because of any other situation that exists,” Colombia argued. While non-violation complaints are allowed for trade in goods and services, the TRIPS Agreement was accorded different treatment during the negotiation of the Marrakesh package. Members decided not to allow non-violation complaints under TRIPS (Article 64.2 of the TRIPS Agreement). According to Colombia, “this “moratorium” (i.e., the agreement not to use TRIPS non-violation cases) was to last for the first five years of the WTO (i.e., 1995-99)”, but “it has been extended since then.” The extension, largely premised on protecting public health measures, has been in place since 2000. The last extension came at MC13 in Abu Dhabi, said Colombia. The MC13 decision of 2 March 2024 (WT/L/1194) on “TRIPS Non-Violation and Situation Complaints” states: “We take note of the work done by the Council for Trade-Related Aspects of Intellectual Property Rights pursuant to our Decision of 17 June 2022 on “TRIPS Non-Violation and Situation Complaints” (document WT/L/1137), and direct it to continue its examination of the scope and modalities for complaints of the types provided for under subparagraphs 1(b) and 1( c) of Article XXIII of GATT 1994 and make recommendations to the 14th Ministerial Conference. It is agreed that, in the meantime, Members will not initiate such complaints under the TRIPS Agreement.” However, the US and Switzerland, which are global hubs for much of the research-based patented drug industry, have repeatedly opposed continuing the moratorium, including at TRIPS Council meetings. With the exception of the US and Switzerland, many countries have continually demanded a permanent moratorium on TRIPS non-violation complaints. Against this backdrop, the TRIPS Council decided to leave the agenda item open for further discussion as part of the “Road to Yaounde,” said people familiar with the development. Thailand, which had not apparently raised opposition to continuing the TRIPS moratorium, chose to join the US and Switzerland on inexplicable grounds, said a TRIPS official who asked not to be quoted. In all likelihood, the issue will be linked to the demand for extending the moratorium on customs duties on electronic transmissions, despite the agreement that the e-commerce moratorium will terminate at MC14 as per the Abu Dhabi decision. According to the Abu Dhabi decision, trade ministers said, “We agree to maintain the current practice of not imposing customs duties on electronic transmissions until the 14th Session of the Ministerial Conference or 31 March 2026, whichever is earlier. The moratorium and the Work Programme will expire on that date.” However, the US, Costa Rica, Guatemala, Ecuador, and Paraguay have called for an indefinite moratorium on customs duties on electronic transmissions, while Barbados proposed a two-year extension, said people familiar with the development. WTO ACCESSIONS Although ongoing accession work has progressed substantially toward the admission of Ethiopia and Uzbekistan to the WTO at MC14, the US has raised several technical and other concerns during the dedicated sessions for the two countries, said people familiar with the development. It remains to be seen at MC14 whether Washington will allow the planned adoption of the two accession protocols, said people familiar with the development. JONES ACT Regarding the continuation of the GATT exemption for the US Merchant Marine Act of 1920, or the Jones Act – in place since 1995 – China and Korea appear to have called for its termination on grounds that it allegedly harms the global shipping industry. In the past, the European Union has said the Jones Act is a piece of legislation that “restricts fair competition in the shipbuilding and shipping markets and no longer serves a legitimate purpose in today’s global economy.” Surprisingly, the EU, Norway, and Japan, among others, did not join China and Korea this time at the GC meeting, said people familiar with the development. However, the US seemed rather unfazed by the opposition raised by China and Korea, said a participant who asked not to be identified.+
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