WEEKLY NEWS DIGEST IN INTERNATIONAL TRADE - "QazTrade" Trade Policy Development Center" JSC

WEEKLY NEWS DIGEST IN INTERNATIONAL TRADE

Digest Content

  • Trade Policy Review Body — Trade Monitoring Overview of Developments in the International Trading Environment
  • Package of declarations and recommendations adopted to help small businesses trade globally
  • Investment facilitation agreement negotiators wrap up productive year
  • Sweden gives SEK 40 million to help developing countries meet farm trade standards
  • Members discuss work plan at first meeting of Informal Working Group on Trade and Gender
  • Members to continue discussion on proposal for temporary IP waiver in response to COVID-19

Trade Policy Review Body — Trade Monitoring Overview of Developments in the International Trading Environment

Comments of the Deputy Director General Yonov Frederick Agah:

The Report covers new trade and trade-related measures implemented by WTO Members between 16 October 2019 and 15 October 2020. It was prepared against the dramatic backdrop of the COVID-19 pandemic, including the human, social and economic problems that have been left in its wake. As such, it fully reflects the impact the global health crisis has had on trade up until mid-October this year.

The Report outlines several important trends and developments in global trade policy-making and provides an overall assessment of the main trends observed over this period. It also presents a comprehensive account of the state of notifications by WTO Members.

The information included in the Report reflects inputs submitted by Members and Observers, as well as information from other official and public sources. This is significantly higher than the participation rate for the last annual overview, which is very encouraging in the current context.

Although world trade had already been slowing before the pandemic, merchandise exports in nominal USD terms were down 21% in the second quarter of 2020 compared to the previous year while commercial services exports were down 30%. The decline seems to have moderated more recently, as illustrated by the latest WTO forecasts.

The Report shows a slowdown in implementing new regular trade and trade-related measures on goods by WTO Members over the last 12 months. In fact, 89 new trade-restrictive and 88 trade-facilitating measures were introduced by WTO Members and Observers, which are the lowest numbers on record since 2012.

The trade coverage of the regular import-facilitating measures stood at USD 731.3 billion (up from USD 544.7 billion in the previous period) while that of import restrictions came in at USD 440.9 billion (down from USD 746.9 billion). This is a positive development. This drop was likely a result of the sharp decline in overall global trade flows, the diversion of governments’ attention towards fighting the pandemic – through trade policy as well as other areas, and a general commitment to keep trade flowing.

However, import-restrictive measures continue to accumulate over time. At the end of 2019, some 8.7% of world imports (1.6 trillion dollars) were affected by all such measures implemented since 2009 and still in force. Our estimates for 2020 suggest that the stockpile of import restrictions continue to grow and that any roll-back of restrictions is minimal.

Package of declarations and recommendations adopted to help small businesses trade globally

The Informal Working Group on Micro, Small and Medium-sized Enterprises (MSMEs) officially adopted at its meeting on 11 December a package of six recommendations and declarations aimed at addressing challenges smaller businesses face when they trade internationally. The package will be presented to all WTO members at a meeting of Heads of Delegation on 14 December.

Deputy Director-General Yi Xiaozhun addressed the group and congratulated members on their dedication and active engagement and for delivering such a timely package. He stressed that the package is important for the WTO as it shows that members are willing to compromise and work together to accomplish their goals. He said: “We can’t stop here though. The WTO is a multilateral organization and MSMEs are a global issue. My hope is that this group continues to grow and becomes multilateral in the not too distant future.”

The Group aims to identify and address obstacles to MSMEs’ participation in international trade and was launched at the WTO’s Eleventh Ministerial Conference in Buenos Aires in December 2017. The Group is open to the whole WTO membership and aims to become multilateral.

The package includes a set of voluntary and non-binding recommendations covering areas such as transparency and information sharing on MSMEs, trade facilitation, access to finance and cross-border payments, access to market information and inclusion of MSMEs in regulatory developments. It follows on from the Group’s declaration at Buenos Aires in 2017, in which they committed to address obstacles that represent a significant burden for MSMEs interested in participating in international trade.

Investment facilitation agreement negotiators wrap up productive year

Ambassador-designate of Chile Mathias Francke, coordinator of the negotiations, said this fourth round concluded “a productive year despite the challenging circumstances” due to the COVID-19 pandemic. He stressed the importance of preparing the ground for a successful new series of meetings in the coming months and up to MC12. The coordinator will conduct bilateral consultations in the second week of January with participants wishing to exchange views on the way forward.

This last round of meetings continued the negotiations based on the informal consolidated text, covering a wide range of aspects. Participants engaged in a constructive discussion on issues such as the most-favoured nation (MFN) treatment and on proposals for the creation of a single portal, the setting up of domestic supplier databases and the designation of investment facilitators. Proposals by various delegations on special and differential treatment (Section V), institutional arrangements and final provisions (Section VII) and the preamble also prompted an open and constructive debate. 

Participants were updated on the submission of five formal proposals since the last round of negotiations on 9-10 November — one by Canada on authorization fees in the financial sector, one by Chinese Taipei on the insulation of the future investment framework from international investment agreements (the so-called “firewall” provision) and three revised texts by Brazil with regards to the single portal, the domestic supplier database and the designation of investment facilitators.

The coordinator also outlined the main outcomes of the intersessional meetings on 23 and 27 November where discussions were held on such elements of the future agreement as responsible business conduct and anti-corruption measures. Discussions also covered the drafting of issues where there seems to be a good degree of convergence among delegations, including multiple applications, appeal or review, domestic regulatory coherence and cross-border cooperation.

Participating members thanked the coordinator for his leadership in steering discussions and subsequent negotiations despite the very difficult circumstances amidst the COVID-19 pandemic. The workplan proposed by the coordinator to keep streamlining the consolidated text and incorporating members’ proposals was well received by participants who committed to working and discussing among themselves, or in small groups, in order to find common ground for concrete wording. 

Sweden gives SEK 40 million to help developing countries meet farm trade standards

The government of Sweden is pledging SEK 40 million (approximately CHF 4.2 million) over the period 2020-2023 to help developing and least-developed countries (LDCs) participate more actively in agricultural trade. This grant to the Standards and Trade Development Facility (STDF) aims to support developing countries in complying with international food safety, animal and plant health standards. The objective is to increase their access to global and regional markets and contribute to sustainable economic growth, food security and poverty reduction, in line with the STDF’s Strategy (2020-2024).

The STDF is a global coordination platform that connects diverse public and private sector organizations across agriculture, health, trade and development to share experiences, identify opportunities for collaboration and promote a more coherent approach to sanitary and phytosanitary (SPS) capacity development.

The STDF provides support and funding for the development and implementation of collaborative and innovative SPS projects that promote compliance with international standards and other SPS requirements. The STDF was established by the Food and Agriculture Organization (FAO) of the United Nations, the World Organisation for Animal Health (OIE), the World Bank Group, the World Health Organization (WHO) and the WTO, which houses and manages the STDF partnership.

Overall, Sweden has donated just over CHF 56 million to the various WTO trust funds over nearly 20 years.

Members discuss work plan at first meeting of Informal Working Group on Trade and Gender

Members exchanged ideas on how to further advance their understanding of the links between trade and gender and how to approach trade issues with a «gender lens» at the first meeting of the Informal Working Group on Trade and Gender on 10 December. Members also welcomed the release of the report by the International Gender Champions Trade Impact Group outlining 32 best practices in trade and gender policy.

Members highlighted the transparent and inclusive nature of the Informal Working Group, which was established last September with the intention of allowing more members to join. They agreed to focus their work around four key elements: experience sharing; considering the concept and scope for a “gender lens”; reviewing analytical work undertaken; and contributing to the Aid for Trade work programme as contained in the Interim Report establishing the Informal Working Group.

A number of the participants suggested topics that could be discussed in the Informal Working Group to follow up on the objective to remove barriers to women’s participation in trade in line with the Buenos Aires Declaration on Trade and Women’s Empowerment which now counts 127 proponents. Suggested themes include gender-related national policies, Aid for Trade, digital trade, data collection, capacity building, COVID-19, and facilitating access to trade for women entrepreneurs. Members also considered proposals on how to apply the concept of a gender lens to trade policies and to the WTO, with several seeking more presentations from experts in the coming meetings of the Informal Working Group. Members outlined that this issue was a central point in the Informal Working Group’s agenda.

Members also considered a suggestion for the group to organize a session at the Aid for Trade stocktaking event in March 2021 and heard a report from the WTO Trade and Gender Focal Point on the various research work being undertaken. Members also urged the WTO to work with other organisations with expertise on trade and gender and to continue its research partnerships. Members further emphasized the importance of organizing these ideas into a schedule and work plan in preparation for concrete elements to be presented for consideration by the 12th Ministerial Conference scheduled for next year.

The International Trade Centre presented a report titled «Delivering on the Buenos Aires Declaration on Trade and Women’s Economic Empowerment» which compiles best practices and recommendations on trade and gender ranging from data collection methods to impact assessments of trade agreements, government procurement and financial inclusion tools for women entrepreneurs. These themes were discussed in six workshops organized in 2018 and 2019 under the umbrella of the Buenos Aires Declaration. The report was produced in collaboration with the Trade Impact Group and supported by Australia. Members recommended that the Trade Impact Group and the Informal Working Group work in synergy.

Lastly, members’ views were sought on the leadership structure for the Informal Working Group, which they aim to finalize at the next meeting in early 2021.

Members to continue discussion on proposal for temporary IP waiver in response to COVID-19

At the meeting of the Council on Trade-Related Aspects of Intellectual Property Rights (TRIPS) on 10 December, WTO members agreed to continue discussion on a proposal by India and South Africa for a temporary waiver of certain TRIPS obligations in response to COVID-19. A status report will be submitted to the General Council meeting on 16-17 December indicating the current lack of consensus on this issue and highlighting the common goal shared by members of providing access to high-quality, safe, efficacious and affordable vaccines and medicines for all.

The proposal (IP/C/W/669) was initially submitted by South Africa and India on 2 October and has since been co-sponsored by the delegations of Kenya, Eswatini, Pakistan, Mozambique and Bolivia. The document calls for a waiver for all WTO members of certain provisions of the TRIPS Agreement in relation to the “prevention, containment or treatment” of COVID-19. According to the proponents, the objective is to avoid barriers to the timely access to affordable medical products including vaccines and medicines or to scaling-up of research, development, manufacturing and supply of essential medical products.

The waiver would cover obligations in four sections of the TRIPS Agreement — Section 1 on copyright and related rights, Section 4 on industrial designs, Section 5 on patents and Section 7 on the protection of undisclosed information. It would last for a specific number of years, to be agreed by the General Council, and until widespread vaccination is in place globally and the majority of the world’s population is immune. Members would review the waiver annually until termination. 

Inclusive and comprehensive discussions on the waiver proposal were first held at the TRIPS Council on 15-16 October and subsequently at informal meetings on 20 November and 3 December. In those meetings, members exchanged views, sought clarifications and provided information on a number of questions relative to the functioning and impact of the requested waiver but did not reach a consensus.

In the meantime, the chair encouraged delegations to continue to engage with each other and to seek common ground with regards the waiver request, including in relation to scope and substance in order to achieve the common objective shared by all WTO members.

The next formal meeting of the TRIPS Council is scheduled for 10-11 March 2021. In order to allow for further consideration of the waiver request in the more immediate future, the chair proposed to consider meeting in January and early February to advance discussions.

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