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When trade ministers from 164 member countries gather in Geneva for the 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) beginning Sunday, finding solutions to the contentious issues of food security and ensuring vaccine equity will be on top of their agenda. While the Russia-Ukraine war has created a global food crisis that needs urgent attention, lack of adequate vaccine supplies to many parts of the developing world to fight the coronavirus pandemic remains an unresolved issue.
The ministerial conference is the highest decision-making body of the WTO and can take decisions on all matters under the ambit of multilateral trade rules based on consensus. While the MC generally meets once every two years, this time trade ministers will meet after a gap of over four years as the event was postponed twice due to the outbreak of Covid-19. The meeting was originally scheduled to take place in June 2020 in Kazakhstan, which was chosen to chair the meeting.
The meeting will take place against the backdrop of changed geopolitical dynamics, growing anti-China sentiment and Western nations’ attempt to isolate Russia from global trade because of the invasion of Ukraine. Besides, the ministerial will be convened amid the continuing threat of the pandemic and high food, fertiliser and crude oil prices triggered by the Russia-Ukraine conflict.
“This is not an ordinary ministerial conference,” WTO Director-General Ngozi Okonjo-Iweala had said last month. Alluding to simultaneous global crises in the economy, the DG wants WTO to be a part of the solution to the “polycrisis” the world is facing.
From India’s perspective, some of the important issues that will be addressed include outcomes of the WTO’s response to the pandemic. Among these are the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), fisheries subsidies negotiations, agriculture issues including public stockholding for food security, WTO reforms and e-commerce.
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Fisheries subsidies
This has been discussed at the WTO for two decades. The global trade body is looking at building consensus on an agreement that aims to eliminate subsidies for illegal, unreported and unregulated fishing, and promote sustainable fishing.
Experts said that the issue should be given top priority, as fish stocks are at risk of collapsing due to overexploitation.
“A large number of developing countries, including India, have demanded an amendment to the text to include more effective special and differential treatment, including a longer phase in period. If these demands are accommodated, an agreement on fisheries subsidies is likely to be harvested as the outcome of the MC12, as it has been going on since the Doha Round,” said Jayant Dasgupta, former WTO ambassador of India.
Indian officials have said that India will agree to the proposed agreement on fisheries subsidies provided the deal is equitable and does not put member countries in a disadvantageous position in perpetuity.
They said that the current draft is unfairly constraining the less developed nations that don’t have the capacity and resources to support their industry and farmers. India has highlighted that developing countries not engaged in distant water fishing should be exempted from overfishing subsidy prohibitions for at least 25 years, as the sector is still nascent, and is hoping for an outcome that will be a win-win for every member nation.
Food security, agri reforms
At the conference, on top of the agenda for India is WTO’s nod to export of foodgrains from public stocks for international aid and for humanitarian purposes, especially on a government-to-government basis.
Existing WTO rules do not allow member countries to export subsidised foodgrains to the world market, as it may distort food prices. India believes an exception needs to be made amid the food crisis emanating from the Russia-Ukraine war.
India is also not in favour of giving exemptions from food restrictions for food purchased for humanitarian purposes by the UN’s World Food Programme (WFP). A group of 80 nations headed by Singapore does not want export restrictions on foodstuff purchased for non-commercial purposes by the WFP. India may not agree to the proposal as it will restrict its policy space to deal with domestic food security concerns.
India, along with other G-33 nations, will also pitch for finding a permanent solution to the issue of public stockholding for food security.
Under existing trade norms, a WTO member’s food subsidy bill should not breach the limit of 10 per cent of the value of production based on the reference price of 1986-88. Apprehending that full implementation of the food security programme may result in a breach of the WTO cap, India has been seeking amendments in the formula to calculate the food subsidy cap.
As an interim measure, the WTO members at the 2013 ministerial meeting had agreed to put in place a mechanism popularly known as the Peace Clause and committed to negotiating an agreement for a permanent solution at the 11th ministerial meeting at Buenos Aires.
India’s position is that finding a permanent solution to the public food stockpile issue is linked to the survival of 800 million hungry people worldwide.
Response to pandemic
Members of the global trade body will also discuss another priority item — WTO’s response to the pandemic, which includes the TRIPS waiver proposal. As part of a response to the pandemic, countries are negotiating in areas such as export restrictions, trade facilitation, regulatory coherence, cooperation and tariffs, role of services, transparency and monitoring, collaboration with other organisations, and framework to respond more effectively to future pandemics.
India’s view is that the response to the pandemic should address the challenges posed by the current pandemic, including intellectual property as well as challenges in augmenting supply production.
Certain developed blocs and countries such as the EU, US, UK and Canada are seeking to include elements pertaining to limiting the scope for export restrictions, seeking permanent disciplines with respect to trade facilitation measures, increased market access and limiting the scope for TRIPS waiver.
E-commerce
Under a WTO moratorium, countries do not impose customs duties on cross-border e-commerce transactions. Developing countries including India have been battling for policy space to impose customs duties on electronic transmissions, holding that the moratorium has adversely impacted their revenue collections.
However, officials suggest that India may not make a big issue out of the proposed extension of the moratorium on customs duty on electronic transmissions at the MC12.
India and South Africa had made several joint submissions at the WTO, highlighting the adverse impact of the zero customs duties on electronic transmissions or digitisable products on developing nations. A review of the moratorium can help these countries generate more revenues through customs duties, they have argued.
Developing countries, including India, fear that with the advent of artificial intelligence and 3-D printing technology, products that are now delivered offline could be easily transferred electronically. This will make customs duties on products irrelevant.
India’s change in stance may come as a relief to many at the multilateral trade body where the former is often seen as an obstructionist.
