Led by Commerce and Industry Minister Piyush Goyal, India is looking to ensure a fair deal for the country and the developing world with its 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. As a founding member of the WTO since 1 January 1995 and a member of GATT since 8 July 1948, India has been pushing for a transparent and inclusive multilateral trading system.
A critical area of negotiation is agriculture where India is unhappy about some of the provisions in the draft decisions brought out by the Director General of the WTO in May 2022. Three draft texts on agriculture, trade and food security and exemption of the World Food Programme from export restrictions for negotiations were introduced by the DG with India voicing its reservations against extending blanket exemptions from export restrictions under the aegis of the WTO on foodgrains purchased for the UN’s World Food Programme (WFP).
An extension would restrict India’s policy space to deal with domestic food security concerns. The matter 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 whereas 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 which is a coalition of developing countries of which India is a key member and the African Group. This group has come together along with the ACP group in submitting a proposal on permanent solution to the issue of public stockholding (PSH) 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.
Developing countries are seeking improvements 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 7 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 hotly contested area of discussion and one with key stakes for India relates to additional disciplines on export restrictions on agricultural products.
The advocates on export restrictions are seeking outcome on two issues, first of which is an exemption of foodstuffs purchased for non-commercial humanitarian purposes by the WFP from the application of export restrictions, and the second is advance notification of export restrictive measures, including improving compliance with existing notification requirements. Under the provisions of the relevant WTO rules, 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. This mechanism takes effect through additional import duties, on the lines of a similar safeguard presently available to many developed and few developing countries.
The WTO fisheries negotiations have assumed increasing significance for India which is keen to finalize the fisheries agreement in the upcoming MC-12 as irrational subsidies and overfishing by many countries are hurting Indian fishermen and their livelihood.
India would be looking at correcting 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. Indian interlocutors point out that since fisheries are a common endowment to humanity, the sharing of such resources should be equitable and just and any imbalance in the agreement would bind India to current fishing arrangements, which may not meet everyone’s future requirements.
India wants to see, for the sake of sustainability, big subsidizers taking greater responsibility to reduce their subsidies and fishing capacities. Hence an agreement must recognize the various stages of development of different countries and that current fishing arrangements reflect their current economic capacities. India is also in favour of a deal that factors in the changing needs of countries as they develop with passage of time and provide for balancing current and future requirements to exploit fisheries in marine waters and the high seas.
As some WTO members provide 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.
A requisite 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 are key demands from India. Negotiators point out that a fisheries agreement has to be placed in the context of existing international instruments and the laws of the sea and protect the sovereign rights of coastal states to explore and manage the living resources within their maritime jurisdiction.
The WTO Ministerial will also see discussions on e-commerce, a work programme on which was established by the General Council (GC) of the WTO in 1998. The WPEC is 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 and 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,” an expert points out. 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.
Members of the WTO have agreed not to impose customs duties on electronic transmissions, another agenda of discussions at the 12th Ministerial, since 1998 and the moratorium has been periodically extended at successive ministerial conferences. At MC11, the moratorium was extended for two years.
In a meeting held in December 2019, members agreed to maintain the current practice upto MC 12 which starts on 12th June. In fact, att 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.
Outcome on WTO’s response to the pandemic is one of the priority items for MC12 which includes TRIPS waiver proposal. India has concerns on additional ‘permanent’ disciplines in the WTO agreements to respond to the pandemic and does not want to conflate the challenges of pandemic to areas like market access, reforms, export restrictions and transparency. India wants the WTO response to address supply side constraints for the WTO’s response to pandemic and outcomes be credible.
In June 2021 a facilitator led process was initiated by the WTO 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.
Regarding intellectual property, India seeks a recognition of the difficulties faced by developing countries and LDCs in utilising TRIPS flexibilities to address the COVID-19 pandemic as well as a reaffirmation of the TRIPS waiver decision under the responses’ declaration.
Nivedita Mukherjee is a senior journalist covering economy, business, and trade.
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