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Trade

No end to COVID-19 pandemic absent international cooperation

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Officials unload boxes containing vials of AstraZeneca's COVISHIELD, a coronavirus disease (COVID-19) vaccine manufactured by Serum Institute of India, outside a vaccination storage centre in Ahmedabad, India, 12 January 2021 (Photo: Reuters/Amit Dave).

Author: Jeremy Youde, University of Minnesota Duluth

India is in the grips of a massive COVID-19 outbreak, with the total number of cases now numbering more than 24 million sick and more than 250,000 deaths (though the number of COVID-19 deaths is likely significantly higher). The country is setting records for the number of new cases nearly every day. Arundhati Roy, the world-renowned Indian author and activist, has called the situation a ‘crime against humanity’.

The rapid surge of cases in this second wave of COVID-19 has quickly overwhelmed India’s health care system. Medical oxygen, a vital tool for treating patients whose blood oxygen levels are too low, is in such short supply that some hospitals are asking patients to bring their own oxygen with them. Hospitals have even sued the government to force it to devise a plan to supply oxygen. Patients who can’t get a hospital bed are being forced to lie outside because there is no space inside.

Compounding the situation is the sheer lack of vaccines to stop further spread of the virus. In late April, Mumbai, home to roughly 20 million people, had to stop all vaccination campaigns for three days because it had no more vaccines. Though India is the world’s biggest producer of vaccines and has been engaged in an active vaccine diplomacy program, the country is now importing doses of Russia’s Sputnik and the AstraZeneca vaccine, along with the locally-produced Covaxin vaccine, to resume its vaccination program The country was able to resume vaccinations thanks to donations of Russia’s Sputnik vaccine and locally-produced supplies of the AstraZeneca and Covaxin vaccines.

Despite widespread acknowledgement that viruses do not respect borders, India’s devastating experience with COVID-19 calls into question the degree to which the international community is willing to translate idea into practice. Programs like the COVID-19 Vaccine Global Access (COVAX) are supposed to ensure a more equitable distribution of COVID-19 vaccines, but the reality seems instead to reinforce the inequalities around vaccine distribution.

While shipments of the AstraZeneca vaccine from the United States will be helpful, there is more that it could do to ameliorate the shortages in India—and the inequitable access to COVID vaccines more generally. A program like COVAX or donations from the United States can only do so much to resolve structural inequalities that limit access to pharmaceuticals and vaccines; it addresses the immediate issues but not the underlying root causes that give rise to maldistribution in the first place. If world leaders want to make pharmaceuticals more accessible, they need to change the intellectual property rights system governing therapeutic drugs.

Intellectual property rights grant creators the right to control who gets to produce a product and under what conditions through the granting of patents. This control is supposed to reward innovation by allowing creators of intellectual property to reap the rewards from their discoveries.

This might make sense in the case of a car or a computer, but what happens when the people who need access to a drug to protect public health are the very people who lack the money to purchase it? When commerce takes precedence over public health and prevents people from getting the drugs that can protect their own lives and those of others, the risk increases for everyone.

This tension between commercial interests and health is not unique to COVID-19. When antiretrovirals were developed to prolong the lives of those living with HIV, the annual cost was more than US$10,000 — making them completely unaffordable for the majority of people in the countries with the highest rates of HIV infection. This led to the adoption of the Doha Declaration in 2001, allowing countries to ignore patent protections for pharmaceuticals when there is a public health emergency. This includes allowing countries to manufacture their own generic versions of patented drugs.

Both India and South Africa have called on the World Trade Organization (WTO) to declare a public health emergency. Wealthy states resisted these pleas for months, but the United States and China have both announced that they would support a waiver in this instance, though pharmaceutical manufacturers and a number of European governments remain opposed. Drug companies argue that the move would stifle the innovations that allowed them to develop the vaccines so quickly, and European governments argue that the move will do little to ease the shortage. Even with…

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Trade

Fixing fragmentation in the settlement of international trade disputes

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Fragmentation in global trade due to the lack of development in multilateral trade rules at the WTO has led to an increase in FTAs. The Appellate Body impasse has further exacerbated fragmentation, requiring a multilateral approach for reform.

Fragmentation in Global Trade

Fragmentation in global trade is not new. With the slow development of multilateral trade rules at the World Trade Organization (WTO), governments have turned to free trade agreements (FTAs). As of 2023, almost 600 bilateral and regional trade agreements have been notified to the WTO, leading to growing fragmentation in trade rules, business activities, and international relations. But until recently, trade dispute settlements have predominantly remained within the WTO.

Challenges with WTO Dispute Settlement

The demise of the Appellate Body increased fragmentation in both the interpretation and enforcement of trade law. A small number of WTO Members created the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as a temporary solution, but in its current form, it cannot properly address fragmentation. Since its creation in 2020, the MPIA has only attracted 26 parties, and its rulings have not been consistent with previous decisions made by the Appellate Body, rendering WTO case law increasingly fragmented.

The Path Forward for Global Trade

Maintaining the integrity and predictability of the global trading system while reducing fragmentation requires restoring the WTO’s authority. At the 12th WTO Ministerial Conference in 2022, governments agreed to re-establish a functional dispute settlement system by 2024. Reaching a consensus will be difficult, and negotiations will take time. A critical mass-based, open plurilateral approach provides a viable alternative way to reform the appellate mechanism, as WTO Members are committed to reforming the dispute settlement system.

Source : Fixing fragmentation in the settlement of international trade disputes

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WTO ministerial trading in low expectations and high stakes

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The WTO’s 13th Ministerial Conference is set to focus on e-commerce transparency, investment facilitation, and admitting new members. However, progress may be hindered by disputes, especially regarding fisheries subsidies.

The World Trade Organisation’s 13th Ministerial Conference

The World Trade Organisation’s (WTO) 13th Ministerial Conference is set to take place in Abu Dhabi on 26–29 February, with expectations of deals on electronic commerce transparency, investment facilitation for development, and the admission of Timor Leste and the Comoros as WTO members. Despite these positive developments, the expectations are relatively modest compared to promises made at the 12th Ministerial Conference, which included addressing fisheries subsidies and restoring a fully functioning dispute settlement mechanism by 2024.

Challenges in Dispute Settlement and Agricultural Trade Reform

However, challenges remain, especially in the deadlock of dispute settlement since December 2019 due to a US veto on the appointment of Appellate Body judges. Progress in restoring the dispute settlement mechanism has stalled, and discord continues regarding India’s grain stockholding policy as a potential illegal subsidy. Restoring a fully functioning dispute settlement mechanism hinges on addressing US concerns about perceived bias against trade remedies in relation to China’s state subsidies.

Geopolitical Tensions and the Future of Trade Relations

The likelihood of reaching agreements amid geopolitical tensions between Western democracies and China appears slim, with issues surrounding subsidies and global supply chains causing rifts in trade relations. As nations focus on self-reliance within the global value chain, opportunities for trading face obstacles. Advocacy for open markets and addressing protectionist sentiments remains crucial for fostering resilience to external shocks and promoting economic growth.

Source : WTO ministerial trading in low expectations and high stakes

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Getting Vietnam’s economic growth back on track

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Vietnam’s economy grew 8% in 2022 but slowed in 2023 due to falling exports and delays in public investments. The economy’s future depends on structural reforms and reducing dependency on foreign investment.

Vietnam’s Economic Roller Coaster

After emerging from COVID-19 with an 8 per cent annual growth rate, Vietnam’s economy took a downturn in the first half of 2023. The drop was attributed to falling exports due to monetary tightening in developed countries and a slow post-pandemic recovery in China.

Trade Performance and Monetary Policy

Exports were down 12 per cent on-year, with the industrial production index showing negative growth early in 2023 but ended with an increase of approximately 1 per cent for the year. Monetary policy was loosened throughout the year, with bank credit growing by 13.5 per cent overall and 1.7 per cent in the last 20 days of 2023.

Challenges and Prospects

Vietnam’s economy suffered from delayed public investments, electricity shortages, and a declining domestic private sector in the last two years. Looking ahead to 2024, economic growth is expected to be in the range of 5.5–6 per cent, but the country faces uncertainties due to geopolitical tensions and global economic conditions.

Source : Getting Vietnam’s economic growth back on track

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