As the World Trade Organization (WTO) prepares to hold its 12th ministerial conference from June 12 after a gap of four-and-a-half years, blocs representing both developed and developing countries will have an opportunity to set differences aside and infuse new vitality to the multilateral trading system that has been losing its appeal, by producing some results on long outstanding issues.
However, given the rigid stances of various blocs, drumming up a consensus is easier said than done. Only the issue of curbing harmful fishery subsidies has some realistic chance of getting resolved, analysts said. The last ministerial in Buenos Aires in December 2017 had ended in a stalemate.
For its part, India will seek resolution of sticky issues, including a permanent remedy for public procurement programmes for food security, favourable rules for grain exports from official reserves and a patent waiver for Covid-19 vaccines. India will continue to work with other developing nations and put up a united fight for these demands, and many more, official sources said.
Given that New Delhi last month banned wheat exports, much to the chagrin of some developed countries, and followed it up with a cap on sugar exports, it is likely to respond to a barrage of questions on these issues at the ministerial. The G7 nations have already criticised the ban. Of course, India has made it clear that it would supply wheat to food-deficit nations through government-to-government deals and honour commitments already made. Also, the sugar cap, it believes, is already elevated.
Moreover, as the ministerial is being convened under the shadow of the Russia-Ukraine war, some analysts expect the crisis — and its devastating impact on world trade and supply-chains — to feature prominently in talks. The ministerial, which was to be held in 2020, was deferred due to the Covid outbreak.
Permanent solution for public procurement
Given the Ukraine crisis and the consequent spurt in global food prices, a permanent solution to the issue of public procurement for food security will likely top the agenda of India. This is being backed by the rest of the so-called G-33 (a coalition of developing nations) as well.
India’s key procurement programmes are protected from penal provisions under a peace clause secured at the WTO’s Bali ministerial in 2013 (its permanent status was affirmed in late 2014). But some countries started making fresh demands on safeguards and transparency obligations after New Delhi invoked the peace clause for its rice procurement in 2018-19 and 2019-20.
New Delhi has been seeking a lasting solution at the WTO, so that this protection under the permanent peace clause gets further bolstered and the disputes settlement mechanism of the global body won’t consider the appeal of any nation in this regard.
No narrow carve-outs in food procurement
India will pitch for permission to export grains from official reserves through government-to-government deals, to help countries tide over a food shortage and for humanitarian purposes.
However, New Delhi will resist the bid by 70-80 countries, led by Singapore, to give binding commitment on exempting food items purchased only by the UN’s World Food Programme (WFP) from any domestic restriction on exports. Any such move, India fears, will tie its hands for supplying to other countries on humanitarian grounds when a domestic ban is imposed.
No immediate end to fishery subsidies
As discussions to curb harmful fishery subsidies have gained traction, India will endorse any agreement that is equitable, sources said.
India favours a 25-year exemption from over-fishing subsidy prohibition for developing countries that are not engaged in distant-water fishing. At the same time, it suggests big subsidisers abolish their dole-outs within these 25 years, setting the stage for most developing nations to follow suit, according to sources. New Delhi believes that big subsidisers must take greater responsibility in scrapping their dole-outs.
An independent study by a group of authors, led by U Rashid Sumaila of the University of British Columbia, shows the fishery subsidies in India stood at only $227 million in 2018, way below $7.26 billion in China, $3.80 billion in the EU, $3.43 billion in the US, $3.19 billion in South Korea and $2.86 billion in Japan.
Patent waiver for Covid vaccines
India will continue to work with allies to put pressure on developed economies, especially the EU, for an intellectual property rights waiver for Covid-19 vaccines, drugs and diagnostic devices to boost supplies to better fight the pandemic across the globe. The proposal — floated jointed by India and South Africa in 2020 — has faced stiff resistance, mainly from the EU, the UK and Switzerland, although the US, after initial reluctance, endorsed a limited waiver.
Reforms at the WTO
Following persistent attack by the US on countries, including China and India, for “self-designating” themselves as developing nations at the WTO, to enjoy special and differential trade benefits, New Delhi has rooted for a policy of voluntary forgoing of such a status.
It has also stressed that any reform agenda must be “development-centric, preserving the core values of the multilateral trading system and strengthening the provisions of special and differential treatment”, for poor and developing countries in both existing and future pacts.
New Delhi has also called for expeditious restoration of the almost-dysfunctional Appellate Body of the WTO for dispute resolution, without diluting its core features. The US has blocked the appointment of judges, thus crippling the WTO’s appellate mechanism.
E-commerce and taxing e-transmission
India will oppose any further extension to a moratorium on customs duty on electronic transmission, seeking a change in status quo prevailing over the past 24 years. A 2019 study by UNCTAD pointed out that developing countries are losing $10 billion in potential revenue annually, including $497 million by India, due to the moratorium.
WTO members have agreed not to slap customs duties on electronics transmission since 1998 and the moratorium has been extended periodically at successive ministerial conferences.
Interestingly, even over two decades later, WTO members have neither defined what constitutes electronics transmission nor come to an understanding on its coverage of products. This has made it difficult for countries to even tax imports of products that can somehow be linked to digital goods.