WTO General Council Stumbles on TRIPS, E-Commerce Duties

World Trade Organization (WTO) members remain divided on the extension of intellectual property flexibility for COVID-19 diagnostics and therapeutics under paragraph eight of the MC12 TRIPS Agreement, reached on June 17 last year, and substantive progress on the moratorium on e-commerce duties continues to elude delegates.

During the WTO's General Council meeting that concluded on May 9, several developing countries emphasized the need to finalize the decision on paragraph eight.

WTO Director-General Ngozi Okonjo-Iweala did not mention paragraph eight in her remarks to the General Council. Instead, she focused on development issues and the need for a decision on dispute settlement reform. Her silence on paragraph eight has raised concerns among TRIPS negotiators.

India, South Africa, and Indonesia, among others, called for an urgent decision on paragraph eight during the General Council meeting due to the rising number of COVID-19 cases in their countries. However, opponents of the extension, such as Switzerland, the United Kingdom, the European Union, Japan, and Mexico, maintained their positions, arguing that there is no evidence that an extension is warranted at this time.

The United States has yet to take a side, as it awaits the completion of a US International Trade Commission investigation into the need for the waiver. The report is not expected until the second week of October. With the World Health Organization having declared the COVID-19 pandemic over, attention is now on what the WHO will do in ongoing discussions on the patent treaty.

E Commerce Duties Moratorium

Members discussed the e-commerce moratorium, which currently prevents the imposition of customs duties on electronic transmissions. The moratorium has been in place since the WTO's second ministerial meeting in Geneva in 1998.

Trade ministers at last year's MC12 meeting agreed to intensify discussions on the moratorium, instructing the General Council to hold periodic reviews based on reports submitted by relevant WTO bodies. The moratorium is set to continue until MC13, but may expire on March 31, 2024, if the meeting is delayed and no decision to extend is made.

Facilitator Usha Chandnee Dwarka-Canabady of Mauritius reported that two dedicated discussions on legal and regulatory frameworks and the moratorium were held on March 22 and April 20. Members agreed on the importance of engaging further on this issue, noting that the WTO could contribute as a forum for discussions, experience sharing, and provision of technical assistance and capacity building.

During the April discussions focused on the moratorium, three written submissions were circulated by Indonesia, Singapore, and the Organization of Eastern Caribbean States. However, the facilitator stated that delegations repeated well-known positions on the moratorium.

Pakistan called for the termination of the moratorium, arguing that members need to weigh the costs faced by developing and least-developed countries (LDCs) under the moratorium. China, an active participant in the Joint Statement Initiative on digital trade, emphasized the importance of working constructively and focusing on promoting the development of e-commerce. China also called for more intensive discussions on the development dimension to help all members, especially developing members, benefit from e-commerce.