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IFANS Focus Overview of the Twelfth WTO Ministerial Conference (MC12) and Implications for the Multilateral Trading System LEE Hyo-young Upload Date 2022-09-13 Hits 260
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Ⅰ. The Twelfth WTO Ministerial Conference (MC12): Overview and Assessments
Ⅱ. Implications and Prospects for the Multilateral Trading System



The World Trade Organization’s  Twelfth Ministerial Conference (MC12) was finally held from 12 to 17 June 2022, after being postponed twice due to the COVID-19 pandemic. In the run-up to MC 12, analysts and trade experts were skeptical of any success being achieved at the conference. However, contrary to such expectations, MC12 has surprisingly delivered a package of decisions. The Conference delivered some significant outcomes to prove that the WTO remains relevant - WTO members forged the historic agreement on fisheries subsidies after more than 20 years of discussions and decided to endorse a TRIPS waiver for COVID-19 vaccines.

While some argue that MC12 outcomes represent the restoration of the multilateral trading system’s functions, other views contend that MC12 has simply kept the multilateral trading system afloat. Despite all the controversy over the results of the ministerial conference, WTO’s efforts at addressing relevant issues in a timely manner and attempting to provide important milestones to cope with the fast-changing international trade environment deserve credit and recognition.


Ⅰ. The Twelfth WTO Ministerial Conference (MC12): Overview and Assessments


1. Key Achievements

MC12 produced an outcome document as well as a package of three ministerial declarations and six ministerial decisions. It bears noting that the outcome document reiterated members’ willingness to strengthen the multilateral trading system with WTO at its core. And the fact that the conference explored multilateral solutions to pressing global issues such as food security, global health, critical resources, and environmental challenges provided an important milestone. 

The most significant achievement regarding food security was that members reaffirmed the importance of not imposing export prohibitions or restrictions on food and agricultural products to ensure trade flows, and resolved that emergency measures introduced to address food security concerns should minimize trade distortions by imposing only temporary, targeted, transparent, and proportionate measures that also comply with the notification requirements in  WTO rules.  

Moreover, members agreed to waive certain intellectual property (IP) protection rights as codified in the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for COVID-19 vaccines. Round-the-clock negotiations among delegations produced a decision on how WTO would respond to emergencies, including a waiver involving compulsory licensing for the widespread distribution of COVID-19 vaccines. Members also agreed to refrain from imposing export controls on COVID-19 vaccines, diagnostic kits, treatments, and other essential medical goods. 

Among the number of deliverables, the conclusion of the multilateral Agreement on Fisheries Subsidies is hailed as the most significant achievement of MC12. By agreeing on this 21-year-old issue, WTO provided hope that its rule-setting function can be restored. Notably, the Fisheries Subsidy Agreement is the first WTO deal to place environmental sustainability at its core. But with regards to the issue of WTO reform, a clear agenda and timeline have yet to be concluded, based on the commitment to restore the WTO's dispute settlement body (DSB)’s full function by 2024. 


2. Significance of MC12 and Implications

The twelfth WTO ministerial conference takes on greater significance as it provided a forum for WTO members to prove that trade rules can respond to today’s most pressing global challenges, such as environment and health issues. Members were able to strike some significant agreements like the Agreement on Fisheries Subsidies, which sets new rules to curb harmful subsidies and protect global fish stocks, and reached an agreement on an intellectual property waiver for COVID-19 vaccines to address the global health crisis. The Agreement on Fisheries Subsidies, in particular, has opened up new avenues for the multilateral trading system to be more responsive to environmental issues and has shown the ability and commitment of WTO members to discuss environment and sustainability issues within the multilateral framework. Moreover, the agreement on  a TRIPS waiver for COVID-19 vaccines illustrates how WTO members are increasingly recognizing the importance of prioritizing public health issues over corporate interests through the rigid application of WTO rules. In addition, an agreement to exercise due restraint when imposing  export restrictions on food supplies shows that the existing multilateral trading system is striving to maintain relevance of the WTO by addressing food security issues within its framework. 

From a historical perspective, the achievements of MC12 could be considered as a limited success that merely contributes to the multilateral trading system’s nominal existence, as members have focused on short-term responses to emerging global issues without addressing the key fundamental items on the Doha Development Agenda (DDA). Nevertheless, it is significant enough in that members ultimately recognized the urgency of multilateral solutions to pressing global issues and agreed to iron out their differences despite the intensifying and prolonged U.S.-China tensions which slowed  the progress of cooperation among members on several agenda at MC12.

As part of negotiation techniques to secure the ‘Geneva Package’, an opt-out mechanism enabled the exclusion of specific countries for achieving agreements on divisive issues. In the end, MC12 could secure the package of agreements while reflecting the interests of major members by using this mechanism. Such a negotiation technique is also drawing attention as a useful way to reaffirm the responsibility of emerging developing countries as WTO members, and to reach agreements on sensitive issues especially those that arise from  the tensions between the U.S. and China. It is also worth noting that the opt-out mechanism provides for flexibility by allowing temporary opt-out options for those members which are not ready or hesitant to accept new rules at the time of conclusion, while other members can continue to steer multilateral negotiations for setting new rules and norms. 


Ⅱ. Implications and Prospects for the Multilateral Trading System

The international community needs multilateral solutions to solve global challenges such as climate change, depletion of fishery resources, and the ongoing global health crisis. The outcome of MC12 shows that multilateralism plays a critical role in solving the ‘global commons’ problem.

Although the ineffectiveness of the WTO’s multilateral negotiation process which requires consensus among 164 members has been subject to  criticism over the past years, MC12 outcomes reaffirmed that it is worth struggling to generate a consensus from all members as it provides legitimacy to the agreed norms and rules and guarantees each member’s responsible implementation of the agreements.

Meanwhile, it is hard to say that the WTO’s legislative function has been fully restored as s result of MC12, as members were able to obtain only  partial agreements on key agendas over which developed and developed countries were sharply divided. However, it seems that members explored various ways to preserve the merits of the consensus mechanism, since it serves the basic principles of multilateral negotiations. Among the various measures are special provisions permitting preferential market access for developing countries and longer transition periods to implement WTO agreements, and a sunset clause in the agreement on fisheries subsidies. 

Although it would be a stretch to say that MC12 fully restored the WTO’s existing dispute settlement and legislative functions, the outcomes can be evaluated as a departure from complacency about the WTO’s nominal existence, as the WTO’s substantive functions have indeed been partially restored. 

We can further expect that the WTO, in the vanguard of the multilateral trading system, will endeavor to resolve global issues arising from the  global commons problem, by deepening linkages between these issues when necessary and dealing with emerging sustainability issues within the existing framework. Moreover, it is anticipated that the full restoration of the WTO’s dispute settlement function will be possible only in areas that focus on advancing developing countries’ interests, implying that the agendas of developed countries’ interest may have to be discussed through regional trade agreements outside the WTO framework.


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