All bets are off whether the World Trade Organisation’s 12th Ministerial Conference (MC 12), held in Geneva from June 12-15, delivered a successful outcome for India and developing countries. Ministerial deliberations are being extended by a day to cobble up deliverables if compromises are made at the eleventh hour. Since its inception 27 years ago, WTO has managed only one update on trading rules with respect to trade facilitation, which came into force five years ago. This highest decision-making body seeks to address the challenges of making a rules-based multilateral trading system more relevant in a world where the devastation wrought by Covid-19, climate change, and geopolitical tensions have upset global trade.
MC 12’s deliberations were broadly around four main pillars plus, notably, WTO’s response to the pandemic, fisheries, agriculture, WTO reform plus other issues. These four pillars are critical issues on which India and developing countries have major stakes. It says a lot about the extremely low expectations around MC 12 when the WTO Director-General, Ngozi Okonjo-Iweala, stated that “even landing one or two (deliverables) will not be an easy road.”
What the D-G had in mind was waiving trade-related intellectual property rights (TRIPs) to produce Covid-19 vaccines and on fishing subsidies, both of which were tantalisingly in reach ahead of MC 12. Although India struck a “maximalist compromise position” by earlier agreeing along with the US, EU, and South Africa to limit the waiver to only vaccines for five years, there was opposition by some developed countries to uphold the spirit of India and South Africa’s proposal floated in October 2020 also to include drugs and diagnostic devices. The latest draft text left this matter for member countries to decide over the next six months, while India held that any agreement to combat the Covid-19 pandemic would be incomplete without a waiver for vaccines, therapeutics, and diagnostics.
It is only by reaffirming the spirit of the October 2020 proposal that the TRIPs waiver can turn into a full agreement. India also has serious problems with the draft fishing agreement to eliminate subsidies for illegal, unreported, and unregulated fishing and to prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing. India has sought greater balance and fairness in the negotiating text. The tough stance can perhaps change if its concerns over the transition period are agreed to.
MC 12 is thus a mixed bag for India. Its quest for a permanent solution to the issue of public stockholding for food security might be kicked down the road for the next ministerial. It is concerned that developed nations are pushing proposals on WTO reforms which dilute provisions on special and differential treatment for developing countries, besides trade and environment linkages, inclusion of plurilaterals or agreements between few like-minded members to negotiate over particular issues and ending the system of consensus for every decision that must be made. India, South Africa, and Indonesia are also opposed to continuing a moratorium on duties for digital goods expiring this month. The prospects for a tariff on digital transactions is a curious fate for WTO that has seen tariff barriers lowered to 9% and global trade volumes more than doubled under its watch. Such divisions come in the way of even a limited number of deliverables at MC 12 despite last-ditch efforts to avert an impasse.