G20 and WTO stumble under the impact of the COVID-19 pandemic as WTO temporary dispute settlement kicks off
March 31, 2020: Last Friday’s G20 Special COVID-19 communique repeated the do 'whatever it takes' mantra from other institutions, but was empty of specific commitments needed to address the pandemic. In part it said: ”Consistent with the needs of our citizens, we will work to ensure the flow of vital medical supplies, critical agricultural products, and other goods and services across borders, and work to resolve disruptions to the global supply chains, to support the health and well-being of all people."
Alan Gyngell from the Australian National University was scathing about the failure of decisive action, caused in part by the ongoing trade war between the US and China. Although the US and China have removed punitive tariffs from products required for each country to cope with the pandemic, the hostile rhetoric has escalated. Gyngell predicts that this G20 failure to act will undermine its future credibility.
The World Trade Organisation has been even more low profile in the face of the economic impact of the pandemic. Its Director General, Roberto Azevedo, has created a special webpage on the crisis, and set up a Task Force. He predicts that the economic crash will be greater than the 2008-09 Great Recession, but promises that trade will be the key to a quick and sustainable recovery. Azevedo failed to acknowledge any problems with the lack of national capacity and dependence on international supply chains which the WTO’s neoliberal strategy has created over the last 25 years. Like the G20, the WTO is so far failing to respond meaningfully to the pandemic.
Alternative temporary WTO Disputes process debated but may commence soon
Over the past two years the United States has blocked the appointment of new judges to the WTO’s Appellate Body, allegedly to attempt to force reform of the WTO’s dispute settlement process, but in reality to undermine the entire WTO disputes system. On December 10, 2019, the terms of two of the three remaining Appellate Body members expired and the Appellate Body could no longer hear appeals. This now prevents WTO members achieving a final resolution to a current trade dispute.
In January 2020, the European Union’s 28 countries, plus 15 other WTO member countries including Australia and China, declared their intent to establish a voluntary alternative interim appeal arrangement. This is based on Article 25 of the WTO Dispute Settlement Understanding that allows the WTO to provide appeals panels for specific disputes between groups of members. On March 27, 2020 they announced they would notify the arrangement to the WTO and that they expected it to commence operations soon.
This may provide a temporary solution but it remains to be seen whether its legality under WTO rules will face challenges and, if it survives, how many of the 164 WTO members will agree to use it, given the current hostility of the USA.
The COVID-19 pandemic has forced the WTO to postpone its June Ministerial Meeting which would have celebrated its 25th anniversary.