The war in Ukraine contaminates the work at the WTO

The war in Ukraine continues to disrupt the work of an already deadlocked World Trade Organisation (WTO). Across different committees, negotiations, and working groups, the mutual accusations between Kiev and Moscow are overshadowing all other issues.

A case in point was the March 24–25 meeting of the Committee on Sanitary and Phytosanitary Measures (SPS). In the end, members did manage to raise 48 specific trade concerns on topics including restrictions and approval procedures for imports of animal and plant products, pesticide policies, and maximum residue levels. However, the meeting offered an opportunity for Ukraine to underline the impact of Russia’s invasion on its economy.

Ukraine warned that its participation on the Committee had been jeopardized by the Russian military invasion. “Military aggression of one member towards another WTO member puts the multilateral trading system and the institution in an unprecedented situation, one that does not allow us to conduct business as usual,” Ukraine’s delegate said. According to the country’s own estimates, as of last week, direct economic losses caused by Russia’s military aggression had already reached $565 billion.

Ukraine thanked those governments that have adopted strong economic sanctions and trade measures against Russia, and pressed for the “comprehensive support of all WTO members to end the Russian aggression against Ukraine with all available WTO tools.” Countries such as Japan, Canada, Norway, Australia, the United States, Korea, the United Kingdom and New Zealand took the floor to condemn the Russian invasion, reaffirming their commitment to ensure the Russian government pays a severe economic and diplomatic price for their aggression against Ukraine.

Russia responded that the WTO is a rule-based trade organization and should remain as such. The Russian delegation denounced what it considers a politicization of the WTO which leads to the fragmentation of the multilateral trading system. The Russian representative stressed that members should refrain from discussing political issues at the WTO.

On March 30, the conflict dominated the agenda again during the meetings of the Committee on Market Access. The war was not on the initial agenda, but Ukraine used a procedural clause to bring the issue to the fore. The delegation shared, “as a matter of urgency and for the sake of transparency,” a notification dated March 25, which indicates that “due to Russia’s military invasion of Ukraine on February 24, 2022, the Government of Ukraine was forced to introduce export restriction measures on certain products in order to ensure national food security.”

The restrictions apply to multiple food products, including: Live bovine animals, meat of bovine animals, frozen meat and edible meat by-products, poultry and eggs, wheat, corn, rye, oats, buckwheat, millet, sugar, salt and sunflower oil.

“OUR FARMERS ARE RISKING THEIR LIVES AS THEY HAVE ALREADY STARTED THE SOWING SEASON IN SOME REGIONS OF UKRAINE.”

The Ukrainian delegate said that active military actions have already halted trade and destroyed many sown areas and farms, adding that “even under these circumstances, our farmers are risking their lives as they have already started the sowing season in some regions of Ukraine.”

The Russian delegate claimed that consideration of global or regional security matters and UN Charter compliance does not fall under the mandate of the Committee on Market Access, and asked the chair to moderate the discussion accordingly. Delegates should be reminded that they are violating rules that they have themselves developed and adopted, Russia insisted, “Otherwise, we’re running the risk [of becoming] a medieval bazaar rather than a WTO committee meeting. I urge delegates to exercise self-restraint.”

Predictably, however, the meeting quickly became another platform for countries to reiterate their condemnation of the Russian invasion, and to point out the pertinence of the issue. The United Kingdom was first to take the floor, sharing its own notification on the decision to implement an additional 35% tariff for a number of goods originating in Russia and Belarus. The UK said it will continue to work with its allies and partners across the multilateral system to condemn Russia’s appalling actions and to isolate it on the international stage.

This discussion is absolutely relevant to the committee, the EU delegation said: “We could try and ignore the international context in which our meeting is taking place, but that would not [negate] the important impact the war has had on market access related issues, which have been felt all over the world”.

The United States also spoke of unity and reiterated its commitment to ensure the Russian government will pay a severe economic and diplomatic price for their actions, which, it noted, are incompatible with the rules-based system.

Russia responded by claiming that unilateral measures are the reason for a drastic increase in the cost of freight and insurance for Russian products, including agricultural ones. “Additional costs […] are passed on to consumers, resulting in growing global food prices,” the Russian delegate said. Moreover, disrupted plans of international commodity traders and international banks have resulted in reduced shipments of agricultural products to the global market.

The Russians also pointed to a number of measures which it saw as inconsistent with WTO provisions: implementation of import tariffs above MFN rates; import bans on Russian oil and refined oil products, as well as natural gas and coal; restrictions on exports to Russia of various goods, including oil refining equipment and technologies, foodstuff, and other goods; impeding Russian financial institutions, transportation companies and export support agencies; banning Russia’s use of EU seaports; and the freezing of a substantial part of the country’s currency reserves. For Moscow, “this is a robbery, if we call a spade a spade.”

The discussions on COVID-19 vaccines have not been spared. In the first half of March, during a meeting of the TRIPS Council, Ukraine simply asked members to refrain from engaging with the Russian delegation, claiming that “the Russian Federation has clearly abandoned the basic principles and values that the GATT and the WTO have promoted for almost 80 years since the end of World War II.”

-JC