Is America (finally) back in Geneva?

The WTO's 12th ministerial conference (MC12) last week afforded a provisional rescue to the institution, greeted by a global and collective sigh of relief. But the ability of the WTO to pull itself out of paralysis was not the only significant outcome of MC12. Another equally meaningful development happened behind the scenes, encapsulated in a few words to The G|O from a bleary-eyed Asian diplomat as he left the WTO’s building in the early hours of the morning following the final day of negotiations: “17 months after Joe Biden taking office, I think we can finally say: America is back.”

The slogan “America is Back” was used by Biden in his first days in office to mark a clean break with the nationalist, anti-multilateral posture of Donald Trump. But America’s allies have repeatedly and openly doubted the willingness of Washington to truly reengage with the multilateral system—particularly at the WTO. “At this juncture, the claim has not translated into real action,” a senior Western diplomat told The Geneva Observer a few months ago, when asked to assess the Biden administration’s self-proclaimed return.

On the first day of MC12, diplomats from Latin America admitted that they were concerned that the US delegation in Geneva would essentially remain silent, as Washington’s representatives had done so often in previous meetings. But “on day two, things changed considerably; they came onto the pitch to play,” a veteran ambassador told us.

The stakes were high, as the negotiations revolve around the notorious TRIPS waiver, which would temporarily suspend IP rights on COVID-19 vaccines, one of the most contentious issues before the WTO at MC12. Eventually, a bilateral deal with China brokered by Washington sealed the day and cleared the way for an agreement to be reached.

The US government insisted that any WTO agreement related to COVID-19 vaccines must explicitly exclude China from being able to benefit from a waiver on patents, since China has developed its own vaccine. Beijing offered to voluntarily opt out of an agreement, instead of accepting the US proposal for a written provision that would permanently exclude China from the pact. At the end of the day, a text was agreed that stated that “developing country members with existing capacity to manufacture COVID-19 vaccines are encouraged to make a binding commitment not to avail themselves of this Decision.” According to knowledgeable sources, it went all the way to the White House for final approval, and most likely to the highest level of the Chinese Communist Party as well. It also infuriated Big Pharma in the US.

“It’s hugely powerful when the United States and the Chinese delegates are like-minded on an issue,” the US ambassador to the WTO, Maria Pagan, told journalists. “If we’re saying the same thing, it’s a hugely powerful message to the membership. So, where we can work together, we will work together. That will help us when we’re going to be at odds with each other [again], which will happen, […] just due to the relationship,” she said.

On agriculture, the US was also central in pushing back India’s proposal to allow domestic subsidies and public stockholdings which would have affected exporting nations for years to come. A final agreement is still in the works, but for many developing countries opposed to the Indian proposal, the strong US stance gave them the strength to assert their own positions.

After 21 years of negotiations, the weight of the US also helped to unlock negotiations on fishing subsidies. As it stands now, countries will limit subsidies for illegal, unreported, and unregulated fishing, while the agreement also contained a control on overfishing and financial aid to vessels fishing in unregulated international waters.

The notable change in the Biden administration’s attitude, moving from cautious to fully engaged, coincided with a rare example of bi-partisan pressure on the White House. On the opening day of the conference, the New York Times carried an Op-Ed by former trade negotiators from both sides of the US political spectrum calling for engagement from the White House.

“In the W.T.O. negotiations, the United States needs to lead the world in reaching a deal,” wrote Peter Allgeier, deputy U.S. trade representative and U.S. ambassador to the W.T.O. in the George W. Bush administration, and Michael Punke, deputy U.S. trade representative and U.S. ambassador to the W.T.O. in the Obama administration. “Sustained leadership by the United States will be critical—but major members such as China, the European Union and Japan, and the rest must act in the interests of sustainability,” they insisted.

Even Washington’s long-held misgivings about—and, under some past administrations, outright opposition to—the WTO’s Appellate Body, the organization’s highest dispute settlement mechanism, seem to be approached with a different perspective as the reality sets in: simply obstructing the system by opposing it will not give the US the influence and power it once had, nor will it prevent countries like China and India from advancing their interests and influence.

More broadly, true reform might finally come to the WTO and the way it operates now that the impetus is there. For Pagan, the US Ambassador to the WTO, this represents a “huge outcome.” The push for structural reforms, she told reporters, “is just two little paragraphs. I cannot tell you how many hours we spent. And everybody says we want reform. Everybody has a different conception of reform. But what we finally, I think, were able to get is that we are committed to having this conversation and to interacting with each other differently,” she said. “Reform needs to be open, inclusive, transparent and address the interests of all members. […] We are committed, and we demonstrated that, engaging in late night conversations with many. And that really counts,” she said.

- JC