The crisis at the World Trade Organization has been going on for a long time. There are many potential flash points as trade ministers gather for talks in Switzerland this week, but they all boil down to one issue: vaccines.
The WTO needs to decide if they will waive patent protection for Covid-19 treatments developed in the west so that poorer countries can make their own lower-cost vaccines. The meeting should come up with an agreement that covers the waiving of patent rules in the future and not just for the present. The WTO will continue to fight if that happens. The other vexatious issues will be fudged or kicked down the road
It is hard to see a future for the WTO if the status quo continues. The governments of wealthy developed nations will make it clear that they look after their own.
Richer countries make all the right noises about the need to share the benefits of the breakthrough made to fight Covid-19, but they have been dragging their heels for the past two years. Switzerland, the EU, the UK and the US, all of which have strong and powerful pharmaceutical sectors, have tried to make any waivers as weak as possible.
This is going to happen. The sectors and interest groups that a country seeks to protect are the focus of trade negotiations. There would be less medical breakthrough if there were no patent protection for new drugs.
The need for good ideas to be rewarded is not disputed by poorer countries. A system that has resulted in a global divide that has seen blanket Covid protection offered in the west while less than 18% of low income countries have received at least one dose is what they object to.
Developing nations have been lobbying hard at the WTO to have intellectual property rights waived so that they can manufacture their own versions of the treatments widely available in rich countries. The current regime is seen as entrenching vaccineapartheid.
The portents are not good at this week's meeting. Successful international meetings usually involve ministers coming in at the last minute to resolve outstanding issues that can be agreed on with a bit of political horse-trading. The various parties are prone to collapse in meetings where there is a lot on the agenda. There are a lot of contentious issues, including agriculture, fishing, e- commerce, and the mechanism for dealing with trade disputes.
It's a make or break week for the WTO and for its director-general. The head of the WTO was chosen because she was a political operator and not a trade expert. What was needed was someone who could bang a few heads together.
It has been more difficult for Okonjo-Iweala to speed up progress than she thought. Running the WTO is not an easy job, for reasons that are both complex and simple. Trade agreements are complex because they are very technical. It's simple because the WTO is the most disorganized of the international organizations.
Since 1944, the World Bank and the International Monetary Fund have been controlled by western countries. The decision-making machinery doesn't reflect the global economy in its current form, but the dominance of the US and its western allies makes it possible to make decisions.
It is designed to be different. One small country can block progress if decisions are not unanimous. The governance system makes it hard for rich western governments to approve their proposals.
China, India, Brazil and South Africa are some of the bigger emerging market countries that have resisted attempts by the EU and the US to force their will on the rest of the world. If the old bilateral model was still in existence, trade officials would prefer it. Pressure is being put on the WTO to become more of a plurilateral organisation. The WTO should not be run to suit the interests of business groups in Europe and North America.
That is the reason vaccines are a problem. Nick Dearden of Global Justice Now says that an organisation that can't bend its pro-big business rules to allow for the rapid scale-up of medicines desperately needed to end a global pandemic is simply not fit for purpose.
In the next few days, the WTO needs to prove Dearden wrong. It appears to be a tall order at the moment.
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