Was WTO meet a success for India?

So far, the outcome of most World Trade Organization or WTO meetings has been nothing but disagreement. Members of the inter-governmental organization -- which regulates and facilitates international trade -- had agreed only once on a global deal in its 27-year history. That happened in 2013 at the Ninth Ministerial Conference in the Indonesia island of Bali. And the deal struck was the Trade Facilitation Agreement, which cut red tape on the treatment of goods crossing borders.

The second-ever such multilateral agreement, which was related to fishery subsidies, that created new global trading rules came nearly nine years later last Friday at twelfth Ministerial Conference, dubbed the MC12, in Geneva. WTO Director-General Ngozi Okonjo-Iweala called it “unprecedented”.

The Ministerial Conference is the topmost decision-making body of the WTO that typically meets every two years and brings together all its 164 members. The latest meeting was originally scheduled to take place in June 2020 but was postponed twice due to the COVID-19 pandemic.

Initially scheduled to end on June 15, the ministerial gathering was extended by two days to allow more time for reaching agreements. On June 17, after more than five days of gruelling negotiations, WTO members hammered out a string of decisions on fishing subsidies, COVID-19 vaccine production, food security and e-commerce, among others. The WTO works on the principle of consensus, which means even a single member can block an agreement for any reason.

The accord to curb subsidies and overcapacity in the fishing industry wrapped up 21 years of negotiations on the matter. And it was the first time that an agreement was concluded on sustainability grounds.

Governments dole out $35 billion in fishing subsidies annually, of which $20 billion directly contributes to overfishing. The WTO agreement bans any subsidy for vessels or operators engaged in illegal, unreported and unregulated fishing, with a two-year exemption for developing countries including India within their exclusive economic zones, or 200 nautical miles.

Similarly, it also prohibits subsidies for fishing in overfished stocks, with a two-year relief for poorer nations. India’s demand to extend the 12 nautical mile limit to 200 has been agreed but its demand for a 25-year transition period for developing countries was not granted. India argued that it gives barely $15 in subsidy every year to a fisher family while some developed countries give as much as $75,000. Nearly 9 million fisher families in India receive support from the government.

India and some other developing countries, however, won concessions that removed an entire chapter from a proposal that could have threatened some types of subsidies favouring small-scale, artisanal fishing. The fisheries subsidy agreement expires in four years unless WTO members broaden it to include new rules to fight overfishing and overcapacity.

After over 20 months of discussions, a partial patent waiver for Covid-19 vaccines found its place in the so-called Geneva Package. India, South Africa and 60 other countries had sought a waiver of intellectual property rights for Covid-19 vaccines, treatments and diagnostics.

But the deal only allows developing countries to issue licences to domestic companies for the manufacture and export of Covid-19 vaccine for five years without the consent of the patent holders, although they must be compensated.

Coming too late into the pandemic, the deal may not have a meaningful impact on production amid an oversupply of vaccines. WTO members will however consider extending the waiver to therapeutics and diagnostics after six months.

India’s demand to allow it to export foodgrain from its public stockholding could also not be agreed upon. Existing rules don’t allow WTO members to export subsidised grains, as it may distort global food prices.

WTO members, meanwhile, agreed against imposing export restrictions on foodstuffs purchased for humanitarian purposes by the UN World Food Programme.

India has also been constantly demanding a permanent solution on public stockholding for food security. This was in fact India’s “topmost priority” for the Geneva WTO meeting, according to Commerce Minister Piyush Goyal. But the issue has been pushed to the next ministerial. Agricultural subsidies for developing countries such as India are capped at 10% of the value of production, based on the 1986-88 reference price.

WTO members also agreed to maintain the current practice of not imposing customs duties on electronic transmissions until the next ministerial conference. Such e-transmissions are worth hundreds of billions of dollars a year. The moratorium was adopted in 1998 and has been periodically extended.

An end to the moratorium, which India has been demanding, would pave way for tariffs on movies and music streaming, emails and video calls, game downloads, software updates, financial transactions and corporate data flows. India, along with countries like South Africa and Indonesia, insists that the moratorium is depriving them of customs revenue from digital products, especially new technologies like 3D printing, big-data analytics and artificial intelligence.

India says a reconsideration of the moratorium is important for developing countries to preserve policy space for their digital advancement, regulate imports and generate customs revenue.