In the early hours of 17 June 2022, the Ministerial Conference of the World Trade Organization (WTO) adopted a package of decisions after five days and nights of intense negotiations that appeared to be teetering on the brink of collapse. With the WTO’s credibility on the line, trade ministers were able to compromise and reach consensus at the last minute, reaffirming the WTO’s capacity to deliver multilateral trade rules and provide trade-related responses to some of the most pressing global issues.
Herewith, please find a first overview at a glance of what the “Geneva Package” from the 12th Ministerial Conference of the WTO includes. Decisions were made on: (i) fisheries subsidies; (ii) a partial waiver of patent protections under the Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS Agreement“) in relation to COVID-19 vaccines; (iii) a moratorium on customs duties on electronic transmissions (“e-commerce moratorium”); and (iv) WTO reform. A first-glance description of the decisions on fisheries subsidies and the e-commerce moratorium follows. See our client alert for our descriptions of the decisions on patent protection waiver and WTO reform.
Agreement on Fisheries Subsidies
The Agreement on Fisheries Subsidies is meant to respond to the problem of depleting fish stocks due to overexploitation fueled by government subsidies. Substantively, the agreement establishes disciplines on: (i) subsidies contributing to illegal, unreported and unregulated (IUU) fishing; (ii) subsidies regarding overfished stocks; and (iii) other subsidies. Article 3 prohibits subsidies to any vessels or operators engaged in IUU fishing or fishing-related activities in support of IUU fishing. Article 4 prohibits subsidies for fishing or fishing-related activities regarding an overfished stock, while permitting subsidies to rebuild fish stocks to a biologically sustainable level. Regarding “other subsidies,” Article 5 prohibits subsidies in respect of fishing or fishing-related activities outside of the jurisdiction of a coastal member or a coastal non-member, and outside the competence of a relevant regional fisheries management organization or arrangement (RFMO/A).
The agreed text is a pared back version of the draft text initially put before WTO members. Comprehensive curbs on subsidies contributing to overfishing and overcapacity were dropped from the text of the final agreement. As a trade-off, however, WTO members committed to continue negotiations on these types of subsidies with a view to making recommendations to the 13th Ministerial Conference to be held no later than December 2023. In this respect, Article 13 of the Agreement on Fisheries Subsidies expressly provides that if “comprehensive disciplines are not adopted within four years of the entry into force” of the agreement, it will stand immediately terminated unless otherwise decided by the WTO’s General Council.
Moratorium on Customs Duties on Electronic Transmissions
At the WTO’s second Ministerial Conference in May 1998, WTO members adopted a Declaration on Global Electronic Commerce, agreeing to establish a comprehensive work program to examine all trade-related issues arising from e-commerce, and to continue their practice of not imposing customs duties on electronic transmissions until the next session of the Ministerial Conference. Known as the “moratorium on electronic transmissions,” WTO members, at every Ministerial Conference since then, have agreed to extend the moratorium until the next session of the Ministerial Conference normally held every two years. The moratorium on e-commerce was last renewed in December 2019, until the 12th Ministerial Conference.
Absent a further renewal, the moratorium would have lapsed, paving the way for WTO members to levy customs duties on electronic transmissions — a gray area that could potentially include everything from messaging apps, video calls and data flows. In the final analysis, WTO members adopted a decision to reinvigorate the work under the work program, intensify discussion on the moratorium and maintain the current practice of not imposing customs duties on electronic transmissions until the 13th Ministerial Conference of the WTO to be held by 31 December 2023.
At a time when the WTO’s credibility and relevance was being questioned, the successful conclusion of the 12th Ministerial Conference signals that the WTO retains the capacity to conclude multilateral trade rules by consensus, despite the disparate and competing interests of its 164 members. Nevertheless, there still remains much work to be done, including but not limited to the issue of WTO reform and, in particular, the full restoration of the WTO’s dispute settlement function.
If you have any further questions on this, please see this client alert. If you have any questions regarding the above or need any assistance regarding the next steps forward, please do not hesitate to contact us.