High Stakes For African Countries At The 12th WTO Ministerial Conference
Is the global trade system broken? Some would argue that it isn’t, and some insist that it is long overdue for an overhaul. Many among the latter are African governments that point to the disproportionately high impact that global crises have on their fragile economies through trade disruptions.
COVID-19 and the freshly minted Russian invasion of Ukraine are recent examples of crises that have rocked African economies, with few options at their disposal.
As the globe’s largest trade body, all eyes are turned towards The World Trade Organization, whose stated purpose is to “deal with the global rules of trade between nations with the main function to ensure that trade flows as smoothly, predictably and freely as possible”.
The WTO’s topmost organ, the Ministerial Conference, is set to convene at its 12th Session (MC12) from the 12th-15th of June 2022 to consider a series of matters that require critical decisions under the various multilateral trade agreements.
The 11th WTO Ministerial Conference (MC11), which took place in Buenos Aires in December 2017, failed to reach a consensus on key issues such as a curb on subsidies for illegal, unreported and unregulated (IUU) fishing – a goal many UN member states have agreed to achieve by 2020 in line with the SDGs.
The draft Buenos Aires Ministerial Declaration proposed by the Chair of MC11 was not adopted by the conference, given the lack of consensus on key provisions, particularly the reference to continuing work on the Doha Development Agenda and initiating work on new issues.
Against this backdrop and given the ongoing crises rocking the world, it is needless to say that MC12 takes place amidst a tough ecosystem. One would argue that there has never been a more conducive environment for the Global South, particularly African countries, to push for the reforms that they have for so long advocated for in the global trade ecosystem.
Having a pro-reform and outspoken Director General in the person of Dr Ngozi-Okonjo iweala, may also give African delegations the political courage they need to boldly push for the region's critical asks at MC12. A close look points towards 3 main pain areas that the ministers will push for.
Reform the WTO
Calls for WTO reforms date back to many decades, with key concerns revolving around strengthening the work of regular bodies and committees, notification and transparency disciplines of agreements as well as differential treatment provisions for developing and least developed countries.
However, the factor that is of much more concern for the global trade body is the impasse on - and possible collapse of - WTO's dispute settlement system if the appointment of new Appellate Body members continues to be hampered by developed Nations that deem the body to have overreached on its mandate.
A key complaint from African delegations is that reforms previously proposed by developed states seem not to address the issues that are critical to African countries in the WTO, such as the need to correct distortions in agricultural trade, address public stockholding programmes that African countries want to implement, and improve existing agreements that would allow Africa more policy space to industrialize.
As for the private sector, an extensive survey conducted on African CEOs by the Pan-African Private Sector Trade and Investment Committee found that 86.1% of respondents believed that the global trading system was unfair or at best neutral towards Africa.
African delegations at WTO are likely to push for a stronger stance on the reform agenda, which is likely to be echoed by the Director-General, Dr Ngozi Okonjo-Iweala, who has been quoted calling for a bolder stance on reforms in order to make global trade work for developing and least-developed economies. That said, the continent’s representatives will be well served to form coalitions on all sides of the development spectrum in order to galvanize momentum before and during the conference.
Tackle the big hairy issues
MC12 has been postponed a record-breaking 2 times, mainly due to the COVID19-related restrictions that have been in place since the start of 2020. The trade shocks occasioned by the pandemic brought to the surface the need to view trade more holistically and build on lessons and best practices to make the global trade system more resilient and ensure that it is better prepared for the next global health shocks
The session is also taking place against the backdrop of the Russian invasion of Ukraine, which quickly sparked a global food crisis whose first and more severe victims are African populations that heavily relied on Russian and Ukrainian food exports. It is expected that developing countries, particularly African delegations will push for the adoption of three draft texts that emerged from an informal consultation process that started in May 2022.
The three texts include a draft ministerial decision on agricultural trade reforms, a draft ministerial declaration on trade and food security, and a draft ministerial declaration which would exempt from export bans food bought by the UN's World Food Programme (WFP) for humanitarian purposes.
It can also be expected that trade ministers will implement a MC11 decision to continue negotiations on fishery subsidies with a view to adopting an agreement. They will certainly consider a decision to Continue the work programme on e-commerce and the moratorium of not imposing customs duties on electronic transactions until the next Ministerial Conference. This latter issue is of particular interest given the growing popularity of such customs duties to African governments.
Give us COVID vaccine Intellectual Property
Economic nationalism can be said to have reached pandemic proportions if the refusal by global economies to share COVID19 vaccine stockpiles and related Intellectual Property is anything to go by. Referred to as “vaccine apartheid”, this particular issue will be a key test for the WTO’s ability to build consensus on matters that not only touch on trade but human rights and dignity as well.
Dr Okonjo-Iweala has expressed optimism that an international agreement on waiving intellectual property rights for COVID-19 vaccines is within reach ahead of a global trade meeting next week. It however is expected that the African continent will hold no punches in pushing for this waiver.
A fight for relevance
At a time when global trade is being hit from all sides by raging pandemics, wars and nationalistic movements, the World Trade Organization is hard-pressed to prove that it can still deliver a multilateral trade system that creates an equal playing field for all - not just the mighty - to prosper through trade.
African Trade ministers will be counting on this organization to succeed on this mission, and failure is not an option. After all, for them, trade is not a matter of chatter in global conference rooms, but now a matter of life and death for many citizens on the continent.
Gilbert Manirakiza is the CEO, Newmark Group Ltd.