Introduction:

India to host the second mini-ministerial meet of the World Trade Organisation (WTO)

Do you know?

• 12th WTO Ministerial Conference will be held in June 2020 at Astana, Kazakhstan.
• 11th Ministerial Conference (Buenos Aires, December 2017) collapsed despite efforts by 164 WTO members to evolve a consensus on several issues.
• The U.S. had refused a reduction in subsidies and also pulled back on its commitment to find a perennial solution to public stockholding.

Major areas and issues needs to be addressed:

• The 2nd mini-ministerial meet will be held to discuss the interests of developing and least developed countries in global trade.
• US had accused that developing countries like India and China benefit from exemptions meant for the poorer nations. Therefore, this meet acts as a preparatory meeting to set a common agenda at the 12th Ministerial Conference which will be held next year.
• Negotiations on issue of subsidies and public stockholding – issues central to developing and less developed countries.
• The other issues under discussion will relate to protectionist measures, digital trade, fisheries, subsidies, environmental goods, standardisation and implementation of sanitary and phytosanitary measures, and other matters ripe for negotiation and agreement, mainly investment facilitation.

Issue of agricultural subsidies

• WTO replaced the General Agreement on Tariffs and Trade (GATT) as an international organisation mainly to overcome tussles over trade interests.
• The economies of the developing and less developed world (with little bargaining power) were unable to gain market access in most of the developed economies (which were influential in negotiations), especially when it came to agricultural commodities.
• However, there is still deadlock on the issue of agricultural trade negotiations. The disagreements between developed countries (the European Union and the U.S.) and developing countries (Malaysia, Brazil and India) to discipline the farm regime in their favour continue, thereby threatening the WTO’s comprehensive development agenda.
• The expectations of developing countries from trade also get belied due to sizeable support by the developed nations to their farmers in a situation of market failure and other uncertainties. The support through subsidies tends to bring distortions in commodity prices.
• According to OECD, the quantum of subsidies by developed nations vary from $300 to $325 billion annually, which is much higher than that estimated for developing countries. This has become a bone of contention in trade talks as farm lobbies in the U.S., Europe and Japan have steadily exercised political clout to influence officials and lawmakers to continue giving subsidies to farmers.

Stringent non-tariff measures (NTMs)

• Another major concern is that developed countries design and implement stringent non-tariff measures (NTMs) which exacerbate the problems faced by poor countries that are willing to export.
• NTMs significantly add to the cost of trading.
• Developing economies are unable to compete in international markets and hardly gain from sectors with comparative advantage such as agriculture, textiles and apparels.

Conclusion:

Therefore, in the 2nd mini-ministerial meet, developing countries are willing to break the deadlock on these issues and are preparing a common ground to jolt the mandate of the global trade body.

India, in particular, seeks amendment of laws on unilateral action by members on trade issues and a resolution of the WTO’s dispute settlement system.

The Delhi meeting can be a breakthrough if members negotiate these issues in a convergent manner.

The meeting is expected to lead to policy guidance on issues such as global norms to protect traditional knowledge from patenting by corporates, protection through subsidies, e-commerce, food security and continuation of special and differential treatment to poor economies.

The time is opportune for developing countries to voice their concerns and push for a stable and transparent environment for multilateral trade. India must do its homework to focus on the unresolved issues and address the newer ones which are of interest to developed nations, mainly investment facilitation.