G-20 Ministers Say COVID-19 Emergency Responses Trigger WTO Exceptions: Most Press Reports Got Meaning of G-20 Trade Ministers’ Statement Wrong
By Lori Wallach
Many press reports are describing yesterday’s G-20 trade ministers’ statement 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.
These terms provide countries a justification for having policies that would otherwise violate WTO rules. As we’ve previously noted, 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,” Politico Pro-Morning Trade, March 31, 2020 or full story at “G-20 trade ministers pledge to help medical goods trade,” 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,” 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, 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…’