India’s WTO agenda, of addressing the unresolved issues in agriculture and development multilaterally, risks being sidelined by the collaborative efforts of the US, EU, Japan, Canada, Norway and Singapore on intensifying plurilateral work on e-commerce trade rules.
The ongoing mini-ministerial meeting of the World Trade Organisation (WTO) taking place in New Delhi (March 19-20) is an attempt to rejuvenate the spirit of negotiations that have been pending for long between the developed and the developing countries. India has taken this initiative by inviting over 40 countries with the objective of facilitating an exchange of views on various issues and challenges relating to the multilateral trading system. This is the second mini-ministerial meeting being hosted by India, after the first one being held in 2009 in New Delhi.
The issue that is central to this mini-ministerial is the debate on agricultural trade, which, according to India, should be prioritised and conclusive. As a majority of the population of the developing countries in general and India in particular depends upon agriculture, food security and livelihood therefore become the prime concerns. India has made it amply clear through various rounds of Doha Development Agenda that agriculture being the mainstay of the developing countries’ lifeline, settlement on agricultural trade is important for multilateralism to succeed.
What merits attention is to understand the intricacies of agricultural trade and how this trade is currently highly asymmetrical in nature and needs to be settled in a manner that provides a level-playing field to the developing countries—what India and other developing countries have been arguing since the commencement of the Doha ministerial in 2001. Agricultural trade needs to be understood in the perspective of market access, domestic subsidy and export competition, which are the main planks of this contentious issue.
From the developing countries’ perspective, the key issues that need to be settled are the designation of Special Products (SP) and the agreement over the coverage of Special Safeguard Mechanism (SSM). The developing countries want to designate a set of SPs, which are critical from the viewpoint of their food security, livelihood and rural development. In addition, the SSM may be available to them as a defence against a sudden surge in imports or the fall in international commodity prices.
At the Hong Kong ministerial in 2005, WTO members agreed to these demands. In fact, the Declaration said: The developing countries “will have the flexibility to self designate an appropriate number of tariff lines as SPs guided by indicators based on the criteria of food security, livelihood and rural development.” The Declaration added that the developing countries “will also have the right to have recourse to a SSM based on import quantity and price triggers, with precise arrangement to be further defined.”
The developing countries argue that the slow implementation of the Agreement on Agriculture (AoA) has resulted in a negative impact on food security, livelihood and rural development in poor countries, as it has enhanced exports from the developed countries rather than promoting imports by them.
Therefore, the developing countries are now insisting that the inclusion of SPs and the SSM should form an integral part of the modalities and outcome of agricultural negotiations to protect their survival instead of giving false promises of adding to their trade gains.
Even on the issue of SPs and the SSM, cracks began to appear among the developing countries. Groups such as the G22 and the G33 are at loggerheads. The G33, the key proponent of SPs and the SSM, argues that the developing countries will have the right to self-designate “at least 20% of the tariff lines” as SPs. It further suggests that 20% of the identified SPs will not be subjected to any tariff cuts, and 50% being subjected to a tariff cut of not more than 10%. But the US has argued that the “SP designation” should be “limited to no more than 5% of tariff lines at the detailed duty level.”
Interestingly, the US argument for limiting the number of SPs has been supported by one of the G20 members—Thailand. The reason is that Bangkok sees that once it accepts the formula set by the G33 and the rest of G20 on SPs and the SSM, its exports to the developing and less-developed countries will vanish or be largely restricted.
Such developments make it imperative for countries such as India to adopt measures to strengthen the G33 alliance sustainable; the group that maintains SPs and the SSM should serve the purpose of providing the developing countries with policy flexibilities, and be the real fulcrum of market access negotiations.
Although it looks clear that India and other developing countries have drawn their plans well to focus on this mini-ministerial, yet the motive of the developed countries is to bring in new issues such as e-commerce, micro, small and medium enterprises, investment facilitation, etc, to the fold of the WTO negotiations. In fact, the developed countries are interested to ignore the so-called Doha Development Agenda and include other trade issues that are of primary importance to them and will provide better trade gains to the developed economies.
Therefore, India’s WTO agenda, of addressing the unresolved issues in agriculture and development multilaterally, risks being sidelined by the collaborative efforts of the US, the EU, Japan, Canada, Norway and Singapore, among others, on intensifying plurilateral work on e-commerce trade rules, in New Delhi. It is imperative that WTO members are mandated to work on those primary unresolved issues under the Doha agenda instead of firming up their opinion on other issues. The moot question now is: How will India stop these anti-multilateral attacks in New Delhi that are bound to reinforce the plurilateral moves in the WTO? Can India muster up such courage and put up a huge challenge to Donald Trump’s ‘America First’ policy.