[CTC] Most Press Reports Got Meaning of G-20 Trade Ministers’ Statement Wrong

Wed Apr 1 06:42:30 PDT 2020

G-20 Ministers Say COVID-19 Emergency Responses Trigger WTO Exceptions: Most Press Reports Got Meaning of G-20 Trade Ministers’ Statement Wrong <https://citizen.typepad.com/eyesontrade/2020/03/covid-19-emergency-responses-are-deemed-not-to-violate-wto-most-press-reports-got-meaning-of-g-20-tr.html>
March 31, 2020 <https://citizen.typepad.com/eyesontrade/2020/03/covid-19-emergency-responses-are-deemed-not-to-violate-wto-most-press-reports-got-meaning-of-g-20-tr.html>
By Lori Wallach

Many press reports are describing yesterday’s G-20 trade ministers’ statement <https://www.wto.org/english/news_e/news20_e/dgra_30mar20_e.pdf> as a commitment NOT to violate World Trade Organization (WTO) rules with emergency COVID-19 responses.

The actual statement says something quite different: The G-20 countries deem actions countries take to battle the crisis as subject to WTO exceptions, and thus permissible even if they do violate the WTO’s rules.

Those fluent in GATTese, the arcane technical language of trade wonkery, will have noticed the key words in yesterday’s G-20 Trade Ministers’ statement:

We agree that emergency measures designed to tackle COVID-19, if deemed necessary, must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules. [Emphasis added]
The statement says that G-20 countries agreed that COVID-19 emergency actions meet the requirements to trigger the WTO’s general exceptions, which are found in GATT Article XX <https://www.wto.org/english/res_e/booksp_e/gatt_ai_e/art20_e.pdf>.

These terms provide countries a justification for having policies that would otherwise violate WTO rules. As we’ve previously noted <https://www.citizen.org/article/only-one-of-44-attempts-to-use-the-wtos-general-exception-to-only-one-of-44-attempts-to-use-the-gatt-article-xx-gats-article-xiv-general-exception-has-ever/>, WTO tribunals rarely allow countries to apply the exceptions. Usually, the tribunals rule that a domestic policy fails because it cannot meet the “chapeau” (the overarching initial paragraph) of the exceptions or that a policy is not “necessary” in a narrow WTO-required meaning that has been fabricated by tribunalists over decades of WTO rulings. Here are the relevant parts of GATT Art. XX:

Article XX (General Exceptions): Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures: …
(b) necessary to protect human, animal or plant life or health;…
(j) essential to the acquisition or distribution of products in general or local short supply; Provided that any such measures shall be consistent with the principle that all contracting parties are entitled to an equitable share of the international supply of such products, and that any such measures, which are inconsistent with the other provisions of the Agreement shall be discontinued as soon as the conditions giving rise to them have ceased to exist.
The G-20 trade ministers statement provides a bridge over all three quicksand pits that normally sink the use of these exceptions.

As far as the chapeau language, the statement makes clear that COVID-19 emergency measures “do not create unnecessary barriers to trade.” To deal with clarifying what is “necessary” to satisfy GATT Art. XX(b), the statement makes clear that is a matter for countries to self-designate. And with respect to the principle of countries having equal shares of international supply in GATT Art. XX(j), the statement notes that emergency measures are not deemed to be a “disruption to global supply chains.”

And in case a reader is not fluent in GATTese and does not have “ah ha, Art. XX is in the house” bells going off in their heads, the last clause explicitly states that emergency measures “are consistent with WTO rules.” Understanding that requires only attentiveness to the grammar – that clause is attached with an “and” – separating it from the list of specific GATT Article XX satisfiers connected by “ors.”

Regardless, some press reports got it totally wrong – by taking part of the relevant G-20 ministers’ text as a quote, and then supplying their own meaning:

The trade ministers included additional language, promising any emergency measures would "not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules. -Politico (You can see a summary outside the paywall in “G-20 calls for open trade, sort of,” <https://www.politico.com/morningtrade/> Politico Pro-Morning Trade, March 31, 2020 or full story at “G-20 trade ministers pledge to help medical goods trade,” <https://subscriber.politicopro.com/article/2020/03/g-20-trade-ministers-pledge-to-help-medical-goods-trade-3978671> Politico, Doug Palmer, March 30, 2020.)

Trade ministers from G20 countries on Monday said any “emergency measures” to address the coronavirus pandemic must be temporary and consistent with World Trade Organization rules. - Inside U.S. Trade (“G20 trade leaders commit to WTO-consistent measures in response to COVID-19 <https://insidetrade.com/daily-news/g20-trade-leaders-commit-wto-consistent-measures-response-covid-19?s=na>,” IUST, Isabelle Icso, March 30, 2020.)
Some news media got it right though. They understood what the statement actually meant and quoted the relevant sentence in context:

In their joint statement, the G-20 trade chiefs appeared to offer scope for such moves by saying they can be compatible with World Trade Organization rules. “We agree that emergency measures designed to tackle Covid-19, if deemed necessary, must be targeted, proportionate, transparent, and temporary, and that they do not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules,” the ministers said. – Bloomberg  (“G-20 Trade Chiefs Defend Open Supply Chains Amid Virus Fight <https://www.bloomberg.com/news/articles/2020-03-30/g-20-trade-chiefs-defend-open-supply-chains-amid-virus-fight>, Bloomberg, Jonathan Stearns and Bryce Baschuk, March 30, 2020, updated March 31, 2020.)

Unlike much trade-related misreporting and spin, this instance does no favors to team trade-status-quo. It does not take great imagination to envision the thought bubble over the heads of most people who saw the wrong stories: ‘Meeting trade rules is a priority over saving lives? !@#$%^&* trade…’

> On Mar 31, 2020, at 11:42 AM, Arthur Stamoulis <arthur at citizenstrade.org> wrote:
> 
> World leaders: Yes, try to stop COVID-19, but make sure you don’t “create unnecessary barriers to trade” and that you remain “consistent with WTO rules”
> 
> 
> G20 trade leaders commit to WTO-consistent measures in response to COVID-19
> By Isabelle Icso, Inside US Trade
> 03/30/2020
> Trade ministers from G20 countries on Monday said any “emergency measures” to address the coronavirus pandemic must be temporary and consistent with World Trade Organization rules.
> 
> In a March 30 joint statement <https://insidetrade.com/sites/insidetrade.com/files/documents/2020/mar/wto2020_0137.pdf> following a virtual meeting, trade officials pledged to “take immediate necessary measures to facilitate trade” in medical supplies and equipment as well as critical agriculture products.
> 
> The trade officials last week were told to assess the impact of COVID-19 on trade, as outlined in a joint statement <https://insidetrade.com/node/168474>issued by G20 leaders after a teleconference.
> 
> “We will support the availability and accessibility of essential medical supplies and pharmaceuticals at affordable prices, on an equitable basis, where they are most needed, and as quickly as possible, including by encouraging additional production through incentives and targeted investment, according to national circumstance,” the March 30 statement says. “We will guard against profiteering and unjustified price increases.”
> 
> However, any emergency actions taken to tackle the virus must “be targeted, proportionate, transparent, and temporary, and ... not create unnecessary barriers to trade or disruption to global supply chains, and are consistent with WTO rules,” the trade leaders assert.
> 
> Many governments have implemented some type of export restriction on medical supplies and equipment in response to the pandemic.
> 
> “We emphasize the importance of transparency in the current environment and our commitment to notify the WTO of any trade related measures taken, all of which will enable global supply chains to continue to function in this crisis, while expediting the recovery that will follow,” the statement says.
> 
> Representatives from the World Health Organization, the WTO and the Organization for Economic Cooperation and Development reportedly <https://news.trust.org/item/20200330103116-4vkcy/> participated in Monday’s discussion. The G20 trade ministers called on international organizations to “provide an in-depth analysis of the impact of COVID-19 on world trade, investment and global value chains."
> 
> Additionally, the ministers tasked the G20 Trade and Investment Working Group, which was established in 2016, to address related issues and identify “additional proposed actions that could help alleviate the wide-range impact of COVID-19, as well as longer-term actions that should be taken to support the multilateral trading system and expedite economic recovery.”
> 
> The trade ministers also committed to ensuring that any collective response is “supportive of micro, small and medium-sized enterprises, and recognize[s] the importance of strengthening international investment.” The group also committed to safeguarding “smooth and continued operation of the logistics networks that serve as the backbone of global supply chains."
> 
> “We will explore ways for logistics networks via air, sea and land freight to remain open, as well as ways to facilitate essential movement of health personnel and businesspeople across borders, without undermining the efforts to prevent the spread of the virus,” they said in the statement.
> 
> Wendy Cutler, vice president of the Asia Society Policy Institute and a former acting deputy U.S. Trade Representative, said while the joint statement “has lots of the words we want to hear,” it also includes “lots of outs from adhering to what they call for” and no plans for follow-up calls “handing the matters over to officials,” according to a March 30 tweet <https://twitter.com/wendyscutler/status/1244696430868148224>. It also allows “emergency measures to be taken in accordance with stated principles.”
> 
> Some analysts have said they hoped G20 countries would commit to avoid new trade restrictions, as they did during the 2008 financial crisis <https://insidetrade.com/node/168464>, and to temporarily suspend all tariffs on key medical goods.
> 
>  
> Arthur Stamoulis
> Citizens Trade Campaign
> (202) 494-8826
> 
> 
> 
> 

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