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By DOUG PALMER
— With the World Trade Organization’s 12th Ministerial Conference set to begin in just three weeks, negotiators in Geneva are still trying to put the finishing touches on a deal to reduce harmful fishing subsidies before ministers arrive.
— The chair of the WTO TRIPS Council said on Friday he saw signs of a possible compromise in negotiations over whether to waive intellectual property rights protections for Covid-19 vaccines, therapeutics and diagnostics.
— U.S. business groups have identified a long list of trade irritants that they want U.S. Trade Representative Katherine Tai to address when she travels to New Delhi later this month to relaunch the U.S.-India Trade Policy Forum.
It’s Monday, Nov. 8. Welcome to Weekly Trade. Don’t forget to water your evergreens if the autumn has been dry in your area to prevent “winter burn,” according to my 1974 Popular Science Homeowner’s Almanac. It also suggests changing your furnace filters, if you haven’t done it recently. So many good tips. Send us your news: [email protected], [email protected] and [email protected].
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THE ROAD TO MC12: Colombia’s Ambassador to the WTO, Santiago Wills, plans to present a new draft text today in the long-running fishing subsidy negotiations and also will issue a statement to reporters on where things stand in the talks.
Researchers estimate China provided $5.9 billion worth of harmful fishing subsidies in 2018, or roughly a quarter of the global total. That was followed by Japan at $2.1 billion, the European Union at $2 billion and the United States at $1.1 billion.
Wills, who chairs the fishing subsidy negotiations, recently said he continues to have “a strong sense of optimism” that a deal can be reached, despite deep differences between members over many of the proposed pact’s provisions.
Others are more skeptical. “As usual, India seems to be the impediment,” said Clete Willems, a former Trump White House trade official who now is a partner at the Akin Gump law firm.
WTO members launched the fishing subsidy talks 20 years ago at their Fourth Ministerial Conference in Doha, Qatar. World leaders incorporated the negotiations into the U.N. Sustainable Developments Goals in 2015, calling for a deal by the end of the 2020 that included the WTO’s usual “special and differential treatment” for developing countries. However, negotiators failed to reach a deal last year in the midst of the pandemic.
India provided a relatively modest $174 million in harmful fishing subsidies in 2018 but has pushed for a provision that would exempt low-income countries from making any cuts. “They want to have an exception for 25 years, which is not acceptable,” Bernd Lange, chair of the European Parliament’s International Trade Committee, told reporters last week.
The bare ‘essentials’: WTO members should agree, at a bare minimum, on three “essential” items at the group’s upcoming 12th Ministerial Conference beginning on Nov. 30 in Geneva, former WTO Deputy Director General Alan Wolff said in a recent speech.
Those include a fishing subsidy deal; a trade and health “statement” outlining how countries should deal with the pandemic and “a clear pledge” to deal with climate and other trade-related environmental issues, such as plastics pollution, Wolff said at a Harvard University event.
On the third point, both the U.S. and China last week joined plurilateral talks on trade and environmental sustainability. The 56 participants in the talks are working on a draft statement that they hope to adopt just before MC12 begins.
Wolff also said he expected countries to launch a WTO reform effort aimed at fixing the dispute settlement system, restoring the negotiating function and improving the WTO’s trade policy monitoring and reporting operations.
The worst outcome would be if WTO members can not agree on anything that could be put in a ministerial declaration, Wolff said. That happened in Seattle in 1999, Cancun in 2003, Hong Kong in 2005 and Buenos Aires in 2011. “If MC12 falls into that category, I think that that’d be really long term damage” to the WTO, he said.
VACCINE IP WAIVER DEADLOCK CONTINUES: Intense talks over the past few weeks have produced hints of a possible compromise in negotiations over whether to waive intellectual property rights on vaccines and potentially other goods to help fight the Covid-19 pandemic, Norwegian Ambassador Dagfinn Sørli said on Friday, according to a Geneva trade official.
While there is still no major breakthrough in the talks, Sørli told an informal meeting of the WTO TRIPS Council that he detected a shared view — expressed initially by the European Union — that vaccine manufacturers that are able and ready to produce COVID-19 vaccines should be put in a position to start producing without worrying about a patent.
A number of delegations agreed that this could be achieved either through existing TRIPS flexibilities or a TRIPS waiver, but views diverged over whether different burdens were associated with either approach, the Geneva trade official said. At a separate meeting on Wednesday, a number of members reported that they were actively engaged in frank and candid bilateral discussions to find a solution, even though there was nothing concrete to report yet.
Lange said during a visit to Washington last week that the European Parliament was “not totally against the waiver,” but the real challenge was increasing the number of vaccine production facilities around the world. He also said South Africa and India’s proposal for a waiver on vaccines, therapeutics and diagnostics was “unacceptable” because it covered too many products.
The Walker process: Lange also expressed hope that efforts by New Zealand Ambassador David Walker to produce a “trade and health” agreement covering areas like tariffs on medical goods and export restrictions could be reached. However, that is expected to be more of a political document, rather than a package of binding commitments.
U.S. government silence: While the Biden administration broke with the pharmaceutical industry to support an IP waiver for Covid-19 vaccines, it has said little publicly about the trade and health package that Walker is trying to put together.
“That is an area where I would like to see more US leadership, where I do think they can be more forthcoming and actually get behind some of these ideas and sort of elaborate on some of their own,” Willems said. “And I’m not sure when that’s coming or if it’s coming.”
U.S. industry ideas: Pharmaceutical Research and Manufacturers of America have been less reticent, laying out their suggestions in a recent policy brief urging WTO members to refrain from export restrictions, eliminate tariffs on health-related products, reduce customs barriers to trade in health-related goods and strengthen regulatory cooperation.
Tai touched on only one of those issues, customs barriers, in recent speech in Geneva, when she said the U.S. was working on “a draft ministerial decision aimed at strengthening resiliency and preparedness through trade facilitation.”
BUSINESS GROUPS RAISE NUMEROUS INDIA TRADE CONCERNS: Tai’s trip to New Delhi next week to relaunch the U.S.-India Trade Policy Forum after a lapse of four years is focusing attention in the business community on a long list of trade irritants between the world’s two largest democracies.
Those concerns “affect products and services that Americans design, manufacture, grow, supply, and record, including many raised in previous TPFs that remain unresolved,” the Alliance for Trade Enforcement business coalition said in a letter to Tai.
“Tangible progress on these issues can also create a pathway to restore India’s benefits under the Generalized System of Preferences program,” the groups said, referring to the Trump administration’s decision last year to kick India out of the U.S. trade benefits program.
The eight-page letter highlights Indian policies in five broad areas: intellectual property; medical devices and pharmaceuticals; digital trade barriers; tariffs on farm goods, tech products and manufactured goods; and regulatory and technical barriers to trade in areas such as chemicals, technology, personal care products, toys, medical devices, apparel and footwear.
APEC LEADERS MEET THIS WEEK: Disrupted supply chains will be on the minds of leaders from the United States, China and 19 other economies that account for half of global trade when they meet virtually on Friday and Saturday for the annual Asia-Pacific Economic Cooperation summit hosted this year by New Zealand.
“There was never a more important time for economies to work together to share, rebuild and recover,” senior New Zealand trade official Vangelis Vitalis said in a statement. He chaired the APEC committee work throughout the year that sets the stage for a foreign and trade ministers meeting today and Tuesday and the summit meeting that begins on Friday.
At an earlier meeting in June, APEC trade ministers agreed on a number of measures to ease trade in vaccine-related materials. They also said they would prioritize the removal of barriers to services trade that could impede the delivery of important medical goods.
RAIMONDO IN CHICAGO TODAY: Commerce Secretary Gina Raimondo will travel to Chicago, Ill., today to celebrate the lifting of travel restrictions for fully-vaccinated international travelers with United Airlines. She will also deliver a keynote address at the Economic Club of Chicago.
Asia later this month: Raimondo will travel to Japan, Singapore and Malaysia from Nov. 15 to 18 to meet with government leaders and private sector partners, the Commerce Department said Sunday. Expected topics of discussion include supply chain resilience, digital economy and technology, common standards and supporting regional infrastructure projects. She also is scheduled to give remarks at a Bloomberg Forum in Singapore.
ALUMINUM GROUP NOT QUITE HAPPY WITH 232 DEAL: The Aluminum Association is not completely sold on the deal the Biden administration struck to remove Section 232 national security tariffs on aluminum imports from the EU. Both the AA and its European counterpart had recommended a three-year phase out of the tariffs, rather than dropping the duties and replacing them with a tariff-rate quota that also distorts trade.
In a meeting last week with Tai, AA leaders asked the administration to push the European Commission to reimplement recently suspended tariffs on unfairly dumped Chinese flat-rolled aluminum. “We cannot continue to invest in U.S. manufacturing and grow American aluminum jobs without open but rules-based trade with other market-oriented economies,” AA Vice President Ryan Olsen said in a statement.
IMPORTERS PLAY UP CHINA TARIFF INFLATION PRESSURES: Importers are seizing on recent comments from Treasury Secretary Janet Yellen to encourage the Biden administration to lower tariffs on Chinese goods to help ease inflation concerns.
“As our nation continues to face concerns over rising prices and supply chain obstacles, it is time for Ambassador Tai and other members of the Biden administration to recognize that leaving the previous administration’s failed trade policies in place will only make the problem worse,” Jonathan Gold, a spokesperson for the Americans for Free Trade business coalition, said in a statement.
DON’T MISS POLITICO’S SUSTAINABILITY SUMMIT: Join POLITICO’s Sustainability Summit on Tuesday, Nov. 16 and hear leading voices from Washington, state houses, city halls, civil society and corporate America discuss the most viable policy and political solutions that balance economic, environmental and social interests. REGISTER HERE.
— Xi says China is open to talks on industrial subsidies, state-owned firms, Bloomberg reports.
— China’s exports remained strong in October, The Associated Press reports.
— U.S., India face tough trade talks ahead, The Print reports.
— EU spells out positions for WTO ministerial conference, POLITICO reports.
— SEC approves audit rules aimed at China, POLITICO reports.
— U.S. lawmakers, Chinese diplomats size each other up at climate talks, POLITICO reports.
— Brazilian farmers who protect the Amazon rainforest would like to be paid, The Wall Street Journal reports.
— U.K. says ready to quit post-Brexit deal without Northern Ireland fix, Bloomberg reports.
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