 "What is India’s agenda at the WTO ministerial conference in Doha?")
The World Trade Organisation ministerial conference is set to begin in Abu Dhabi today.
The 13th Ministerial Conference (MC13), the highest decision-making body of the global trade body, will see 164 trade ministers gather in Doha.
The meeting, which will convene today, will conclude on Thursday.
The meeting comes in the backdrop of farmers’ protests in India.
The WTO’s 164 member nations will discuss a deal to ban subsidies that contribute to overfishing, extending a pause on taxes on digital media like movies and video games, and agricultural issues.
But what can India, whose delegation will be led by commerce minister Piyush Goyal, expect from the conference?
Let’s take a closer look:
Agriculture
According to Moneycontrol, India will be looking to make the ‘peace clause’ – which dealt with concessions on farm subsidies – permanent.
The current ceiling on farm subsidies was arrived at the Bali ministerial conference in 2013.
New Delhi at the time made the case that subsidy beyond the maximum was essential to its public stocks of foodgrain – which the state bought at prices that would sustain Indian farmers.
India also successfully argued that this establishes food security for 800 million people.
Known as the ‘peace clause’, this meant that countries could put in place their own food security schemes – even If the subsidy exceeded what the WTO had laid out.
Impact Shorts
More ShortsHowever, this was not adopted permanently.
“After a firm stand taken by (the then commerce minister) Nirmala Sitharaman on this matter at the WTO, its general council (GC) in November 2014 extended the peace clause in perpetuity until a permanent solution is agreed and adopted,” a source told Hindustan Times.
“The MC10 at Nairobi endorsed the GC’s decision. However, no outcome was achieved on this matter in subsequent ministerial (MC11 at Buenos Aires and MC12 at Geneva).”
“In this backdrop, it is clear that India will have to work in tandem with other developing economies of the global South to find a resolution to agricultural sector issues at the WTO. It will also have to play a more aggressive role,” the Moneycontrol piece noted.
“On the farm sector, it will have to take a much tougher stand if the “peace clause” is to be made permanent and thereby enable the country’s food security to be made non-negotiable at the multilateral trade body,” it concluded.
“While the status quo is still maintained and public stockholding cannot be disputed, India wants the interim arrangement must first be made a permanent clause of the Agreement on Agriculture before taking up any other issue,” the source told Hindustan Times.
The G33 on Sunday expressed serious concern over lack of progress in agriculture trade negotiations and urge the WTO members to work on a permanent solution to the issue of public stockholding of grains for food security purposes.
The G33 group includes 47 developing and least developed countries.
In a joint statement, the G33 group also said that it is the right of the developing country to use the Special Safeguard Mechanism (SSM) as an important instrument against major import surges or sudden price declines.
The members should agree and adopt a decision on SSM by the 14th WTO Ministerial Conference (MC), it said.
However, on the issue of public stock holding, the G33 statement has sought a permanent solution in the 13th Ministerial Conference beginning on Monday in Abu Dhabi.
“The G-33 co-sponsoring Members,… urge all (WTO) Members to make all concerted efforts to agree and adopt a permanent solution on the issue (public stock holding),” the G-33 Ministerial Statement on Agriculture Trade Negotiations at the 13th WTO Ministerial Conference said.
A vast majority of G33 members recognise the critical importance of public stock holding for food security purposes for developing countries in meeting their food and livelihood security, as well as rural development imperative, including supporting low-income or resource-poor producers.
The public stock holding (PSH) programme is a policy tool under which the government procures crops like rice and wheat from farmers at the minimum support price (MSP) and stores and distributes foodgrains to the poor.
Trade
Hindustan Times reported that India will push back on China’s aim to combine investment and trade.
India strongly opposes efforts of certain countries like China to push a proposal on investment facilitation at the WTO as the agenda falls outside the mandate of the global trade body, an official said earlier in February.
A China-led group of 130 countries are pushing for the Investment Facilitation for Development (IFD) proposal.
The group wants to bring the proposal through annexure-4 of the WTO under which the proposal would be binding on only the signatory members and not on those who are opposed to it.
“We are against that also,” the official said, adding that India has opposed it as that would dilute the multilateral nature of the WTO.
The official also said that if these countries want to negotiate the subject, they should do it outside the formal structure of the WTO.
India’s concern emanates from the fact that proponents of IFD should not be attempting to bring a “non-mandated, non-multilateral issue” to the formal process in the WTO. Such an attempt will be in violation of the WTO framework and fundamental rule of consensus-based decision-making.
There has not been any ministerial mandate for negotiations on investment-related matters, the official said.
While all decisions at the WTO happens through consensus, it also allows member countries to form a group and have agreements among themselves.
Such pacts comes under the annexure 4 of the WTO that deals with plurilateral agreements.
The IFD was first mooted in 2017 by China and other countries who depend heavily on Chinese investments, and countries with sovereign wealth funds are party to that pact.
Among major countries, the US is also sitting out of the agreement. Sri Lanka and Pakistan are also not part of it.
Fisheries
According to Hindustan Times, New Delhi is likely to demand special fishing rights for developing nations.
India will also reject any restrictions for its nine million fishing families.
“It will discuss the issue of overfishing at MC13 only if developed nations own up the responsibility of damaging global fisheries wealth and agree to withdraw all subsidies they give to distant deep-water fishing,” he said.
E-commerce
E-commerce is set to be discussed – specifically customers duties on E-commerce.
Customs duties on electronic transmissions have not been imposed since 1998.
According to NDTV Profit, this came after came after 29 ministers reached an agreement in December 1996.
The WTO website states that the agreement mandates no duty on hundreds of IT products.
India and South Africa on several occasions have asked the organisation to revisit the issue and have highlighted the adverse impact of the moratorium on developing countries.
India is witnessing a rise in imports of electronic transmissions – mainly of items like movies, music, video games and printed matter – some of which could fall within the scope of the moratorium.
While the profits and revenues of digital players are rising steadily, the ability of the governments to check these imports and generate additional tariff revenues is being limited because of the moratorium.
Developed countries including the US, Australia, and Japan want an extension of the moratorium.
Indian officials are expected to argue against the continuation of a stay on customs duties on e-commerce trade.
An official on Tuesday told PTI the moratorium is having a negative impact on developing nations.
The official said that there is a work programme on e-commerce trade and that WTO members should continue to talk about the topic under that.
“We are not in favour of extension. We are in favour of continuation of the work programme. There is a need to look at the subject from a development dimension and not from the eyes of big tech companies,” the official said.
The official added that the range of the moratorium needs to be discussed due to revenue implications.
The official said developing nations lose $10 billion in tariffs every year.
India could be losing as much as $500 million per year.
“There is a need for a clear definition of e-commerce trade. We need policy space for the sector,” the official added.
According to NDTV Profit, the WTO’s dispute settlement body in April 2023 ruled against India’s import duties on some IT products.
The body called the import duties ‘inconsistent with global trade norms.’
India sought to appeal the matter.
However, the problem is that the WTO appellate body, which is supposed to resolve the dispute, is now defunct.
‘Reconsider plan’
A global consortium of semiconductor industry groups has asked India to reconsider its plan to push for duties on cross-border digital e-commerce and data transfers at an upcoming global trade meeting, warning that India’s stance will stifle its own chip design industry.
Ministers from across the globe are convening for a World Trade Organization meeting in Abu Dhabi early next week to try to discuss several trade-related issues, including extending a moratorium in place since 1998 on applying duties on electronic transmissions.
The moratorium collapse would mean tariffs on digital e-commerce and an innumerable number of transfers of chip design data across countries, raising costs and worsening chip shortages, the World Semiconductor Council (WSC) wrote to Indian Prime Minister Narendra Modi.
The chips sector is a key plank of Modi’s agenda to push India’s economic growth, with a $10 billion incentive package in place to boost the Industry.
Duties on data transfers would ” also impede India’s efforts to advance its semiconductor industry and attract semiconductor investment, especially as more than 20% of the world’s semiconductor design workforce is based in India,” the group wrote in the letter, a copy of which was reviewed by Reuters.
WSC comprises of chip industry associations in regions like the U.S. and China, which represent chip stalwarts such as Qualcomm, Intel, AMD and Nvidia.
New Delhi has said that physical goods like books and videos, once governed by traditional tariff rules, were now available as digital services and should be subject to duties. Developing nations are facing massive loss in potential revenue with such imports from developed countries on the rise, India maintains.
WSC in its letter also urged India to work toward a WTO agreement to permanently prohibit countries from subjecting cross-border data and digital tools to customs duties and procedures.
India’s support to renewing the moratorium will “send a strong signal to semiconductor companies that India is an investment friendly environment,” the group wrote.
Appellate body
India would like to restore the presently-defunct appellate body.
According NDTV Profit, New Delhi wants the appellate body both transparent and completely functional.
This In the backdrop of its aforementioned stance on tech tariffs.
The outlet quoted WTO notes as saying that this is a top priority for the organisation and will be one of the subjects discussed at MC13.
“The issue took on greater urgency after members were unable to reach consensus on the appointment of new Appellate Body members due to objections from the United States. This blockage eventually led to the Appellate Body no longer being able to function starting on 11 December, 2019,” it said.
The previous meeting saw ministers set the goal of establishing by 2024 a functioning and efficient dispute settlement system ‘accessible to all members.
Non-trade issues
Financial Express reported that India will also stand firm against including of non-trade issues such as labour, environmental standards and women’s economic empowerment on the agenda.
This is because India is believes these are social and domestic and social matters that can be discussed by other UN bodies.
A source told Hindustan Times India would oppose anyone also trying to push a unilateral agenda.
“Allowing such moves will dilute the multilateral character of the WTO,” a source told the newspaper.
“We will not agree to any work program. We will agree to discussions to promote sustainable development, but our rights and obligations should not be impacted,” the official added.
“Issues like environment and labour are non-trade issues. These are non-negotiable at WTO. We are sticking to that stand. There are specialised bodies where these issues should be discussed. These are not trade issues, but have a trade implication,” the official, speaking on condition of anyonymity, told the newspaper.
According to Financial Express, developed countries have for ages been attempting to bring in environment and labour standards at the WTO.
If this happens, developing countries who do not meet these standards will be vulnerable.
An example of this is the carbon tax or Carbon Border Adjustment Mechanism (CBAM) – which gives member nations the right to impose import duties beyond agreed upon limits at the WTO.
“Such measures may not only violate the rules of the WTO but also have systemic implications for the international law as a whole, since unilateral action undermines multilaterally-negotiated rights and obligations of countries,” the official added.
‘Not in dreamland’
WTO director-general Ngozi Okonjo-Iweala, a dual Nigerian and American citizen, has pushed to insist the organisation remains vital as 75 per cent of the world’s trade is done on its terms.
What we are focused on at the WTO are what are the appropriate reforms we need to do no matter who comes into power, when, Okonjo-Iweala earlier this month, insisting that the trade body remains relevant.
If we get to what you’re saying that the WTO becomes irrelevant everyone, including you and me, will be in trouble.
But big deals are unlikely as the body’s rules require full consensus among all 164 member states — a tall order in the current climate.
“I don’t have hopes that a very substantive agreement will be announced,” said Marcelo Olarreaga, professor of Economics at the University of Geneva.
“My impression is that the negotiators are dealing with tactical positions — how to make it look like it is the other (side) who is blocking negotiations,” he told AFP.
Okonjo-Iweala has sought to play down expectations.
“Let’s not pretend that any of this will be easy,” Ngozi Okonjo-Iweala said in her opening speech, describing the atmosphere as “tougher” than the WTO’s last 2022 meeting, citing wars, tensions and elections and signs that trade growth will undershoot the body’s own estimate.
She called on ministers to “roll up their sleeves” and complete negotiations, but seemed to rule out any deal in Abu Dhabi on reforming the body’s mothballed appeals court.
“We are not there yet,” she said.
Negotiators say they are still hopeful for an agreement that could buoy global fish stocks and protect fishermen by banning government subsidies.
“We are not in dreamland here. International cooperation is in bad shape. Real success would be fish, plus two or three things,” one trade delegate told Reuters.
Other outcomes from the four-day meeting that are either definite or achievable are the accession of two new members, Comoros and East Timor, and a deal among some 120 countries to remove development-hampering investment barriers.
Tougher areas are extending a 25-year moratorium on applying tariffs on digital trade, which South Africa and India oppose, and an agreement on agriculture trade rules that has eluded negotiators for decades.
“The multilateral trading system with the WTO at its core is at a critical juncture; it is confronting many challenges,” Thani Al Zeyoudi, conference chair and UAE’s minister of foreign trade said in an opening address.
“The WTO remains a powerful force in countering the current unilateralism, protectionism, and discrimination.”
On Sunday, the UAE announced a $10 million grant to support WTO initiatives such as the Fisheries Funding Mechanism, the Enhanced Integrated Framework (EIF), and the Women Exporters in the Digital Economy (WEIDE) Fund, launched during the conference.
Zeyoudi said that trade and sustainability would be on the agenda as part of an effort to ensure the body’s future relevance.
One factor that could help is the determination of Okonjo-Iweala, a former Nigerian finance minister, whose insistence on all-night meetings helped deliver a package of deals in Geneva in 2022.
“What makes me a bit more optimistic than others at this point is that the director-general is a very proactive person and is prepared to push ministers. Also, the UAE trade minister is very results-orientated,” said Alan Yanovich, partner at law firm Akin Gump Strauss.
John Denton, International Chamber of Commerce Secretary General, said even a modest outcome such as a forward-looking ministerial statement that showed common purpose among governments would be worth taking.
“The WTO is a public good ultimately, and our view is that there is a major cost to the real economy from any erosion of that system,” he said.
During the WTO’s last ministerial meeting, held at its Geneva headquarters in June 2022, trade ministers nailed down a historic deal banning fisheries subsidies harmful to marine life and agreed to a temporary patent waiver for Covid-19 vaccines.
They also committed themselves to re-establishing a dispute settlement system which Washington had brought to a grinding halt in 2019 after years of blocking the appointment of new judges to the WTO’s appeals court.
“Replicating the success, the miracle, of MC12 in 2022 will be extremely challenging,” European Trade Commissioner Valdis Dombrovskis said this month.
“Negotiations on the big-ticket items” — such as fisheries, agriculture and the e-commerce moratorium — will “remain open until the final phase of the conference,” he added.
“Negotiations on dispute settlement reform and potentially some parts of the outcome document will also be challenging.”
With inputs from agencies
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