New Delhi : The twelfth WTO Ministerial Conference is all set to begin from 12th June 2022 in Geneva, Switzerland after a gap of almost five years. The key areas of discussions and negotiations this year’s conference include WTO’s response to the pandemic, Fisheries subsidies negotiations, Agriculture issues including Public Stockholding for Food security, WTO Reforms and Moratorium on Custom Duties on Electronic Transmission.
A strong Indian delegation at the Conference is being headed by Shri Piyush Goyal, Union Minister for Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles. India has a vital stake in protecting the interests of all stakeholders in the country as well as the interests of the developing and poor nations that look up to the leadership of India at multilateral forums including WTO.
In the agriculture sector, in May 2022, the DG-WTO, brought three draft texts on agriculture, trade and food security and exemption of the World Food Programme from export restrictions for negotiations. India has reservations about some of the provisions in the draft decisions and has been engaging in the process of discussions and negotiations in order to be able to preserve the rights under the Agreement on Agriculture without undermining the existing Ministerial mandates.
An important issue under negotiation at the WTO relates to protection of India’s food grain procurement programme at Minimum Support Prices (MSP). Such programmes involve purchase from farmers at administered prices and are key to support to farmers and consumers in the country. WTO rules limit the subsidy that can be provided to such products being procured. This issue is being negotiated at the WTO by the G-33, coalition of developing countries of which India is a key member, and the African Group which have come together along with the ACP group in submitting a proposal on permanent solution to the issue of public stockholding for food security purposes on 31 May 2022. India co-sponsored a G-33 proposal for a permanent solution on PSH for food security purposes at the WTO, on 15 September 2021, which had co-sponsorship of 38 Members.
In the negotiations, improvements are being sought by developing countries over the Ministerial Decision adopted at the Ninth Ministerial Conference of the WTO in Bali in December 2013 where Members agreed to negotiate a permanent solution on the issue of public stockholding for food security purposes by the 11th Ministerial Conference of the WTO. It was agreed that in the interim, until a permanent solution is reached, Members would exercise due restraint (commonly termed as ‘peace clause’) in raising disputes in respect of public stockholding programmes for food security purposes instituted before 7th December 2013, even if countries exceeded their permissible limits. Consequent to the firm stand taken by India at the WTO, this peace clause was extended by a decision of the WTO General Council (GC) in November 2014 until a permanent solution was agreed and adopted. Thus, it was ensured that the ‘peace clause’ would be available in perpetuity. At the Nairobi Ministerial Conference held in December 2015, WTO members agreed to engage constructively to negotiate a permanent solution. India neither wants to link PSH issue with other Agriculture issues nor a Work Programme as negotiating a permanent solution has a standalone mandate at the WTO.
Another issue under discussion relates to additional disciplines on export restrictions on agricultural products. The proponents on export restrictions are seeking outcome on two issues: (i) exemption of foodstuffs purchased for non-commercial humanitarian purposes by the World Food Programme (WFP) from the application of export restrictions, and (ii) advance notification of export restrictive measures, including improving compliance with existing notification requirements. Under the provisions of the relevant WTO rules, WTO Members can temporarily impose export prohibitions or restrictions to prevent or relieve critical shortages of foodstuffs or other products essential to the country. India has concerns with making notification requirements burdensome for developing country Members in view of the sensitivities regarding shortages, price escalations and the implications of providing advance notice of such measures on the effectiveness of policies.
With reference to contributions to WFP, India has been a significant contributor to the WFP over the years and has not imposed export restrictions for WFP procurement, at the same time extending support to neighbours with food supplies. Blanket exemptions for the WFP is a concern for India in view of domestic food security.
Other areas of discussion in agriculture are issues relating to market access, special safeguard mechanism for developing countries to protect domestic agricultural producers against import surges and sudden price falls, through additional import duties, on the lines of a similar safeguard presently available to many developed and few developing countries.
WTO Fisheries Negotiations
India is keen to finalize the fisheries agreement in the upcoming MC-12 because irrational subsidies and overfishing by many countries are hurting Indian fishermen and their livelihood. India strongly believes that it should not repeat the mistakes made during the Uruguay Round that allowed a few members unequal and trade-distorting entitlements in agriculture. It unfairly constrained less developed members who did not have the capacity and resources to support their industry and farmers.
Fisheries are a common endowment to humanity, a global public common. Therefore, the sharing of such resources should be equitable and just. Any imbalance in the agreement would bind us to current fishing arrangements, which may not meet everyone’s future requirements. For sustainability, big subsidizers must take greater responsibility to reduce their subsidies and fishing capacities. Any agreement must recognize that different countries are at various stages of development and that current fishing arrangements reflect their current economic capacities. Needs will change with time as countries develop. Any agreement will have to provide for balancing current and future requirements to exploit fisheries in marine waters and the high seas.
Countries like India cannot be expected to sacrifice their future policy space because some members provided considerable subsidies to overexploit fisheries resources and are able to continue to engage in unsustainable fishing. India needs Special and Differential Treatment to protect the livelihoods of poor fishers and address food security concerns of a nation, have the necessary policy space for developing the fisheries sector, and sufficient time for to put in place systems to implement the disciplines under Over Capacity and Over Fishing, Illegal, Unreported Unregulated and Over Fished. India believes that the fisheries agreement has to be seen in the context of existing international instruments and the laws of the sea. The sovereign rights of coastal States to explore and manage the living resources within their maritime jurisdiction, enshrined in international instruments, must be protected.
Protection of the environment has been ingrained in the Indian ethos for ages and has been repeatedly emphasized in various international forums. India is committed to concluding the negotiations so long as it provides space for equitable growth and freedom in developing fishing capacities for the future without locking members into disadvantageous arrangements in perpetuity.
In 1998, the General Council (GC) of the WTO established the Work Programme on E-Commerce (WPEC), with an exploratory and non-negotiating mandate, to comprehensively examine all trade-related issues relating to global e-commerce, taking into account the economic, financial and development needs of developing countries. Under the Joint Statement Initiative (JSI) on E-commerce, launched in 2017, 86 WTO Members are negotiating trade rules on issues such as electronic authentication, non-discriminatory treatment of digital products, free flow of cross-border data, data localization, permanent e-commerce moratorium, online consumer protection, personal data protection, access to source codes.
India believes negotiation on rules and disciplines in e-commerce would be premature given the highly asymmetrical nature of the existing global e-commerce space and lack of understanding on the implications of the multi-faceted dimensions of issues related to e-commerce. Developing countries need to preserve flexibility to implement policies to ‘catch-up’ with the developed countries in the digital arena. We first need to focus on improving domestic physical and digital infrastructure, creating supportive policy and regulatory framework and developing our digital capabilities. Accordingly, India has not joined the JSI on e-commerce as we believe that multilateral avenues are best-suited to achieve inclusive and development-oriented outcomes.
WTO members have agreed not to impose customs duties on electronic transmissions since 1998 and the moratorium has been periodically extended at successive Ministerial Conferences. At MC11, the moratorium was extended for two years. In the GC meeting held in December, 2019, Members agreed to maintain the current practice upto MC 12. At MC12, many WTO members are seeking temporary extension of the moratorium until MC13. India and South Africa have been making several joint submissions highlighting the adverse impact of the moratorium on developing countries and suggesting that a reconsideration of the moratorium is important for developing countries to preserve policy space for their digital advancement, to regulate imports and to generate revenue through customs duties.
India believes that WTO reforms discussions must focus on strengthening its fundamental principles, preserving Special and Differential Treatment (S&DT) including consensus-based decision making, non-discrimination, special and differential treatment, at this juncture and should neither result in preserving inherited inequities nor should they worsen the imbalances.
Among the reform proposals, the most consequential is the US-EU-Japan trilateral initiative, announced at the MC 11. The US-EU-Japan trilateral initiative, immediately after the postponement of MC 12, on 30 Nov. 2021, came out with a joint statement intending to address concerns relating to non-market practices, existing enforcement tools and developing new rules, as required. Prior to this, in Oct. 2021, the European Union came up with a structure of a Working Group it is proposing on WTO reforms.
India led the initiative to present a developing country reform proposal (Developing countries reform paper “Strengthening the WTO to promote development and inclusivity” in Aug. 2019 which was co-sponsored by Bolivia, Cuba, Ecuador, Malawi, South Africa, Tunisia, Uganda, Zimbabwe and Oman. The paper has been revised a number of times with the latest one submitted in Feb. 2022 to keep the reform discussion alive in the run-up to MC12.
India introduced a proposal in November 2021 wherein India took the lead to question the proposal from the European Union and Brazil, both on the process and its objectives. It did not favor an open-ended exercise on WTO reforms, without first agreeing on the elements of the reform package. It proposed that the Members first need to agree on the elements of the reform package, precise nature of the process to be adopted to carry out the discussions, before the Ministers can agree to green-light the WTO reform work. India believes that the reform process and its outcomes should not alter, or in any manner affect, Members’ rights and obligations under the WTO Agreements and agreed mandates and that the agreed rules of procedure of the General Council shall apply to the review process.
WTO response to pandemic
Outcome on WTO’s response to the pandemic is one of the priority items for MC12 which includes TRIPS Waiver proposal. In June 2021, the GC Chair initiated a facilitator led process with Ambassador David Walker of New Zealand as the facilitator. He identified six verticals for work in this area – export restrictions; trade facilitation, regulatory coherence, co-operation and tariffs; role of services; transparency and monitoring; collaboration with other organizations; and framework to respond more effectively to future pandemics.
India is currently engaged in deliberations with various members and groups to build a consensus for a balanced outcome on all the aforesaid elements to address the concerns of all members. India has concerns on additional ‘permanent’ disciplines in the WTO agreements to respond to the pandemic. India does not want to conflate the challenges of pandemic to areas like market access, reforms, export restrictions, and transparency. India wants that the WTO response needs to address supply side constraints for the WTO’s response to pandemic and outcomes be credible.
Regarding intellectual property, India seeks: (i) a recognition of the difficulties faced by developing countries and LDCs in utilising TRIPS flexibilities to address the COVID-19 pandemic, and (ii) a reaffirmation of the TRIPS waiver decision under the responses’ declaration.
India is a founding member of the WTO since 1 January 1995 and a member of GATT since 8 July 1948. India believes in a transparent and inclusive multilateral trading system and we are committed to work to strengthen the WTO. There is a need to preserve the basic principles of the WTO, including, non-discrimination, consensus-based decision making and special and differential treatment to the developing countries.