On 2 October 2020, India and South Africa submitted to the Council for Trade-Related Aspects of Intellectual Property Rights (“TRIPS”) of the World Trade Organization (“WTO”) a proposed waiver from the implementation, application and enforcement of intellectual property (“IP”) rights under the WTO TRIPS Agreement (“COVID Waiver”) insofar as these rights relate to the prevention, containment, and treatment of COVID-19.  In essence, the COVID Waiver would allow WTO Members to forgo some protections of IP rights set out in the TRIPS Agreement in the hope that this waiver could speed up the production of affordable medical products including COVID diagnostic kits, vaccines, medicines, personal protective equipment and ventilators.

The proposed COVID Waiver has divided the WTO Membership.  While a majority of WTO Members have expressed support for the COVID Waiver, some developed countries (such as the EU, Korea, Japan, Australia and Singapore) have expressed reservations as to whether the COVID Waiver is necessary and whether it would actually help achieve the aim that it is intended to serve.


Continue Reading Tensions Between Consensus and Voting in WTO Decision-Making – Part II: The Proposed Waiver on TRIPS and COVID-19

The United States has imposed trade restrictions on imports of solar cells and panels starting in 2012, and since then, the number and nature of these restrictions has grown.  The last several weeks have seen a potential for further increase and/or extension of these measures, further complicating trade in this critical component of alternative energy.

First, on September 2, 2021, a World Trade Organization (“WTO”) panel circulated its report in United States – Safeguard Measure on Imports of Crystalline Silicon Photovoltaic Products (DS562), upholding the Section 201 safeguard tariffs imposed by the United States on crystalline silicon photovoltaic cells (“solar safeguard”).  The solar safeguard is a 2.5GW tariff-rate quota that was imposed by the United States in 2018 on imports of solar cells from most countries.  The tariff was initially set at 30 percent, and was scheduled to be reduced by five percentage points each year in the subsequent three years (lasting for a total of four years).  China challenged the solar safeguard at the WTO, arguing that the U.S. International Trade Commission (“ITC”) failed to comply with the 1994 General Agreement on Tariffs and Trade (“GATT”) and the Agreement on Safeguards when conducting its safeguard investigation.  China argued that the ITC had failed to demonstrate that imports of products increased “as a result of unforeseen developments,” as required by the GATT, while also attacking the ITC’s analysis regarding the link between increased imports and serious injury.  The WTO dispute settlement body has historically been skeptical of safeguard actions, often finding them inconsistent with members’ obligations.  However, in this instance, the panel rejected all of China’s claims, and affirmed the reasoning of the ITC.


Continue Reading U.S. Imports of Solar Products Face Increased Restrictions

There exists a deep-seated practice and tradition of resorting to consensus as the favoured means of decision-making at the World Trade Organization (WTO).  This practice was carried over from the time of its predecessor, the General Agreement on Tariffs and Trade (GATT).  This marked preference for decision-making by consensus over voting has been enshrined in Article IX:1 of the Marrakesh Agreement Establishing the WTO (Marrakesh Agreement) which provides that: “[t]he WTO shall continue the practice of decision-making by consensus followed under GATT 1947”.

However, Article IX:1 of the Marrakesh Agreement also states that: “[e]xcept as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting”.

Thus, while the Marrakesh Agreement formally recognizes consensus as the preferred means of decision-making, it also clearly recognizes the validity of taking decisions by voting as a subsidiary means when consensus is unattainable on any given matter.

As an added twist to decision-making at the WTO, Article IX:1 of the Marrakesh Agreement also establishes that: “[d]ecisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast”.  In other words, majority voting was intended to be the default means of decision-making for the Ministerial Conference (MC) and the General Council (GC).

Nevertheless, in practice, voting at the WTO never takes place.  Instead, WTO Members have strictly adhered to consensus since the WTO’s inception.

In this three-part series, we intend to explore how the WTO Membership’s traditional aversion to voting as a means of decision-making is coming under fire and putting a strain on the proper functioning of the WTO.

Each part will in turn discuss the following three instances where significant pressure is currently building up on consensus as the exclusive means of decision-making at the WTO: (i) the appointment of Appellate Body (AB) members; (ii) the proposed decision to waive certain provisions of the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) with regard to combatting COVID-19; and (iii) the outcomes of negotiations on e-commerce, investment facilitation, micro, small and medium-sized enterprises (MSMEs) and the domestic regulation of services conducted as “joint statement initiatives” (JSIs).

This first instalment of our three-part series will focus on the appointment of AB members.


Continue Reading Tensions Between Consensus and Voting in WTO Decision-Making – Part I: Appointing Appellate Body Members

Recent events at the World Trade Organization (WTO) illustrate how decision-making activities of its Dispute Settlement Body (DSB) can easily be derailed, notably by political frictions spilling over into its meetings.  However, the rarity of instances in which the DSB found itself paralysed underlines the extent to which the WTO has developed coping mechanisms which should enable it to keep such frictions at bay and thus minimize disruptions to its continued functioning.

The penultimate DSB meeting, scheduled for March 26, 2021 was suspended due to the lack of consensus required for the adoption of its agenda.  Rules applicable to DSB meetings require that its proposed agenda be adopted by consensus before a meeting can take place.  The proposed agenda circulated ahead of the March 26, 2021 DSB meeting included a request by Venezuela for the establishment of a dispute settlement panel in respect of U.S. measures.

The United States objected to the inclusion of what it perceived to be an illegitimate panel request, on the grounds that representatives of the Nicolás Maduro regime do not speak on behalf of the Venezuelan people, and that this was a misuse of the WTO aimed at challenging U.S. sanctions that sought to restore human rights and democracy to Venezuela.  As a result of the U.S. objection, the agenda could not be adopted and the DSB meeting could not take place.  All remaining items for consideration at that DSB meeting could not move forward as long as that DSB meeting remained suspended.  These included a request for the establishment of a dispute settlement panel by Australia regarding measures adopted by China in relation to barley from Australia.


Continue Reading A Bumpy Road Ahead? How International Standoffs Periodically Hold the WTO Dispute Settlement System Hostage

On February 18, 2021, the European Commission (the Commission) published its Communication on an Open, Sustainable and Assertive Trade Policy which we previously analyzed in our blog post. Below, we look into the Communication’s Annex on Reforming the WTO: Towards a Sustainable and Effective Multilateral Trading System.

The Commission in its Trade Policy Review listed reforming the World Trade Organization (WTO) as a clear European Union (EU) priority. The Commission notes in the Annex that “Not only is trade vital for our economy; promoting rules-based international cooperation is the very essence of the European project. The EU must therefore play a leading role in creating momentum for meaningful WTO reform.”  Achieving this goal clearly will require engagement with other WTO members. In particular, the Commission calls on the United States’ support to unblock the current Appellate Body impasse and to cooperate closely on reforming all aspects of the WTO.  The Commission will also organize consultations with China and India to better align their WTO commitments with the size of their respective economies.


Continue Reading The EU’s Approach to Reforming the WTO Towards a Sustainable and Effective Multilateral Trading System

The future direction of the World Trade Organization (“WTO”) hinges not only on the consensus agreement of the Members in appointing the WTO’s next Director-General, but also on the ability of that Director-General to forge a path forward to resolve the myriad issues currently facing the organization.

In August of this year, Roberto Azevêdo stepped down from his position as WTO Director-General, leaving his post open and eight candidates from around the globe in the running.  After months of campaigning, this pool was narrowed to two candidates: Nigeria’s Ngozi Okonjo-Iweala and Korea’s Trade Minister Yoo Myung-hee. On 28 October 2020, the WTO Committee Chairs of the selection process announced that Ms. Okonjo-Iweala was the candidate with the widest support. However, Ms. Okonjo-Iweala must be formally appointed by consensus by the General Council; a prospect that remains tenuous in light of the opposition of the United States. The United States was the only WTO Member to say that it would not support Ms. Okonjo-Iweala, but instead has reiterated that Minister Yoo “must” lead the WTO.  See USTR Statement on the WTO Director-General Selection Process.


Continue Reading A New Year and a Potential New Era for the WTO