Making Sense Of India's Victory At The WTO

What the twelfth Ministerial Conference (MC12) of the WTO in Geneva has done for India -- with an outcome that protects its public stockholding without compromising on food aid, offers an agreement on vaccines that opens doors for controlling pandemics better in future and ushers in a process of WTO reform – is to irrevocably and transform India’s image from a deal breaker to deal maker.

Something that Commerce Minister Piyush Goyal feels was ‘unthinkable a year ago’. After a ‘seven-year itch' -- to borrow the phrase from an iconic Hollywood flick, India has been able to secure a favourable outcome at the WTO, despite a strong global campaign against farmers and fishermen, and change the narrative in favour of the interests of its farmers, fishermen, MSME sector, poor people for now and in future.

The breakthrough at the Geneva ministerial after years of talks, alongwith the substantial gains is significant, as Goyal points out, in the context of Prime Minister Modi’s push for India’s global approach from a position of strength.

“The fact that in the last few years Prime Minister Modi has been able to show the growing strength of India to the rest of the world, the fact that his leadership is so pre-eminent globally and the fact that India is seen as a fair and logical voice of the developing countries are reasons for India being able to clinch a deal,” Goyal told Swarajya during a media interaction.

“Initially the people said we are naysayers and causing WTO to fail and not come out with any decisions. But when we told them to look at our content, see the merit of it and have a dialogue with us to understand our point of view, all the countries realised that what India is saying is logical and is the right thing to do,” Goyal told Swarajya.

A key factor in India’s emergence as the voice of the developing and least developed countries (LDCs) has been the country’s conscious attempt to align the issues and concerns it shares with the lesser developed, articulate and communicate them at various WTO fora with great sensitivity.

India and the developing countries had accepted certain compromising decisions when the WTO was established 30 years ago and during the Uruguay Round of negotiations, and India appropriately saw the ministerial as an opportune moment for a correction.

An important part of the strategy of the Indian delegation at MC 12 therefore was to bring members on the table to discuss issues irrespective of the existing geopolitical order and leverage India’s strong relationship with the world nurtured by Prime Minister Modi over the last few years.

Going by the Indian argument, the twelfth WTO Ministerial would appear to have made history in three ways, including the wide range of themes on which decisions have been taken for the first time and a large number of voices lauding India for making this WTO conference probably one of the most successful ministerial to be held in so many years.

By almost singlehandedly achieving consensus on so many different subjects, India is being seen as a country that leads and brings fairness, balance and solutions to the table. Not only has a statement emerged out of WTO after seven years, almost every WTO decision bears India’s signature and India’s concerns are visible prominently in the outcome documents.

The most impactful of the agreements by WTO members is on curbing ‘harmful’ subsidies on illegal, unreported and unregulated fishing for the next four years, to better protect global fish stocks. Member states have been struggling for a prohibition of subsidies that promote overfishing since 2001 and this battle has taken on a larger import in recent times as it affects the livelihoods of the 260 million people who depend directly or indirectly on marine fisheries.

For India it is a win-win scenario, said Goyal, as there have been no restrictions on fishing that would bind artisanal and traditional fishermen of India. Moreover, India has been successful in introducing checks on illegal fishing, under-reporting or outside regulation.

It is also no less an achievement that amidst global food shortages and high prices in the wake of the Russia-Ukraine conflict that have seen wheat costing 60 per cent higher in June 2022 over the same month of 2021, the WTO could defy pressure to deliver a meaningful outcome on trade and food security.

The food crisis took priority as members voted on making food available in developing countries while working towards increasing productivity and production and agreed in a binding decision that food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes would be exempted from any export restrictions.

Recognising the importance of trade in global food security, the ministerial also pledged to avoid bans on food exports but countries would be allowed to restrict food supplies to ensure domestic food security needs. Though India has been demanding to allow export of food from its public stockholdings to other countries, the issue would now be taken up only at the next Ministerial Conference in 2023.

India, however, remains committed to supporting the World Food Programme, according to Goyal, going by recent wheat supplies to Afghanistan which shows no imposition of export restrictions on WFP purchases for food security in other countries.

The WTO Ministerial decision that eligible countries could override COVID-19 vaccine patents until 2027 is a major gain for developing countries like India in the global fight against the Covid19.

Keeping in view the lack of access to enough vaccines or technology which has adversely impacted many developing nations, the WTO patent waiver for manufacturing Covid-19 vaccines for five years will allow a country to issue a compulsory licence to its domestic pharma companies to manufacture the vaccine without taking approval from the original maker.

There would also be no limit on exports. India can thus produce for domestic requirements and outbound consignments. While the WTO deferred for six months the decision on whether to extend this to COVID-19 therapeutics and diagnostics, overall the concessions will go a long way in enhancing vaccine equity, accessibility and affordability.

In e-commerce transactions, a key issue for India was review of the extension of the moratorium on custom duties on e-commerce transactions, which include digitally-traded goods and services. The WTO members had agreed to not impose custom duties on electronic transmissions in 1998, when the internet was still relatively new but the stay has remained in place despite India’s tech revolution.

India led by the Commerce Minister, has sought a change in the status quo prevailing over the past 24 years, as developing countries bear the financial consequences of such a moratorium. According to Goyal, between 2017 and 2020, developing countries have foregone potential tariff revenue of at least $50 billion only on the import of 49 digital products.

However, the matter is likely to prolong for India as WTO members have agreed to continue the long standing moratorium on custom duties on e-commerce transmissions until the subsequent Ministerial Conference until 31 March 2024.

Also Read: India, ASEAN Push For Effective Connectivity Links, Early Review Of Trade Deals