(Bloomberg) -- The World Trade Organization’s decision last week to postpone a critical meeting throws into question efforts to rehabilitate the alliance that’s been battered by years of neglect, trade wars and the Covid-19 pandemic.

The most immediate concern was the ability of the Geneva-based organization to conclude a global agreement this year to expand access to vaccines and, potentially, to waive intellectual property rights for life-saving drugs. 

More fundamentally, though, the delay will hamper efforts to reform a 26-year-old bureaucracy that has failed to evolve with massive shifts in the global economy over the past two decades and was stripped of any teeth to enforce international trade rules.

“It doesn’t take a rocket scientist to figure out that if we find we cannot deliver on these issues that are of critical importance, people are going to look for other options,” WTO spokesman Keith Rockwell told reporters last week. 

“It may be in another context, another organization, another set of negotiations and that would be very damaging for us. So everybody has a big, big stake here.”

Setting Goals

The Biden administration has called for a holistic reform of the WTO and a reboot of the organization’s appellate body, which previously had the final say in disputes that involved billions of dollars in global trade. 

But the U.S. push hasn’t translated into action as the WTO’s 164 members can’t collectively agree on the best way to repair the organization’s core functions. 

The WTO’s new leader, former Nigerian Finance Minister and World Bank official Ngozi Okonjo-Iweala, has urged nations to begin that process by concluding three trust-building agreements at this week’s now-postponed WTO’s 12th ministerial conference, sometimes called MC12: 

  • an agreement to curb harmful fishery subsidies;
  • a framework to expand global trade in vaccines; and
  • a pledge to reduce trade-distorting agricultural policies.

She argues that without an overhaul and forward momentum, governments and businesses may finally conclude that the WTO is not a credible forum for addressing their shared challenges. 

Credibility at Stake

Okonjo-Iweala laid out these stakes clearly for delegates during a closed-door meeting this fall. 

“Business as usual, which at the WTO has come to mean little or no results, is not what people are looking for,” she said in private remarks obtained by Bloomberg News. “And, if this is what we deliver at MC12 -- we can expect that the result for post-MC12 work to be less business for this organization.” 

The WTO’s conference would have provided a rare opportunity for governments to show that it can make a timely impact and help improve the lives of regular people by expanding global access to vaccines. 

For the past two years members have tried and failed to engage on a proposal from India and South Africa to waive key aspects of the WTO’s intellectual property rules for vaccines, therapeutics and diagnostics. 

While the U.S., China and scores of other nations support the idea of an intellectual property waiver in principle, the European Union, the U.K. and Switzerland oppose a waiver that they say would do little to expand access to vaccines in the developing world.

“We remain convinced that the TRIPS waiver will not result in one additional dose of vaccine and may jeopardize existing partnerships that have allowed us to increase production,” Didier Chambovey, Switzerland’s ambassador to the WTO, told reporters last week.

Vaccine-Waiver Impasse

The debate is particularly important to Okonjo-Iweala, whose most recent job as the chairwoman of Gavi, the Vaccine Alliance makes her uniquely qualified to address the inequity of vaccine access in the developing world.

“Up to now -- navigating this Covid crisis trade-wise and intellectual property-wise -- she has done quite well,” former WTO Director-General Pascal Lamy said in an interview. “She has succeeded in making the WTO looking more like a solution than a problem.”

International trade officials had hoped MC12 could provide a forum for trade ministers with political backing to hash out side deals and reach compromises that had eluded their ambassadors in Geneva. 

“The WTO’s ministerial conference is the only time when the key decision makers and the ones that have the phone numbers of leaders come together in one place, are effectively locked in and have to talk about their disagreements and try to forge a new path forward for international trade,” said Dmitry Grozoubinski, executive director of the Geneva Trade Platform. 

While Okonjo-Iweala says negotiations will continue, it remains unclear whether any headway on the intellectual property debate can be made in the absence of in-person ministerial-level negotiations. 

“It’s a highly political issue so that’s probably where it belongs, with the ministers,” Rockwell told reporters. 

©2021 Bloomberg L.P.