India draws 5 markers at WTO; says no to using pandemic as portal for trade commitments

India’s trade envoy JS Deepak on Friday drew five markers for combating Covid-19 at the World Trade Organization, pushing back against egregious efforts by major industrialised countries to extract trade-liberalisation commitments from India and other developing countries by using the pandemic as a portal.

In a hard-hitting intervention at the virtual General Council meeting on May 15, Deepak said: “The economic hardship and other negative repercussions of Covid-19 make carrying on with negotiations in a business-as-usual format untenable.”

Protecting human lives must take precedence over negotiating new commitments, he emphasised. “Having agonised in the last few months of the pandemic at how people have been dying, we need to urgently turn our attention to alleviating the terrible conditions in which so many are forced to live, especially in the developing world,” Deepak told his counterparts at the meeting.

Shared stance

A large majority of developing countries shared India’s concerns that the pandemic cannot be used to force trade liberalisation commitments that would undermine their policy space. “We cannot agree to proposals for global rule-making that limit our policy options to respond to the crisis, enhance our preparedness for future crises and to pursue our plans for economic recovery,” said South Africa’s trade envoy Xolelwa-Mlumbi Peter.

“It is not advisable to make binding decisions in a policy environment that is manifestly uncertain, including on tariffs and export restrictions which are legal in the WTO rulebook,” she said.

Over the past several weeks, the EU, Switzerland, Australia, New Zealand, Canada, Norway and some developing countries such as Chile, Brazil, Singapore, and South Korea have called for far-reaching, binding trade commitments on global trade by using the pandemic.

Even the US, which wants to “diversify supply chains and increase manufacturing capacity back home”, said it would “strongly encourage those interested in creating a more effective, consequential WTO to re-examine US reform proposals, including those dealing with market-oriented conditions, special and differential treatment, and notification compliance.”

The US’ reform proposals seek to deny special and differential treatment to India, South Africa, Indonesia and other developing countries with huge populations in the current and future trade negotiations. The US also wants to impose onerous financial penalties on India and other developing countries if they fail to comply with transparency and notification requirements.

India’s five markers

Countering these narratives, Deepak drew five markers. First, he said, India acknowledges “the importance of coordinating the global response in a way that avoids unnecessary disruption in the flow of vital medical supplies, food and other goods and services across borders.” India, he said, played “a proactive role in ensuring the availability of vital drugs such as hydroxychloroquine and paracetamol across the globe.”

Second, the nation remains committed to taking emergency measures for combating Covid-19 on “targeted, proportionate, transparent, and temporary” basis, the Indian envoy said. “The narrative-push by some WTO members to seek permanent tariff liberalisation on a range of products in response to a temporary crisis appears to be a thinly-veiled bid to use the crisis as an opportunity to gain market access for their exporters,” he warned.

“Developing countries seeking to shore up manufacturing capacity in medical products will require tariff protection for their nascent domestic industry and protection of job losses in many service sectors,” he emphasised.

Third, attempts to prohibit the use of export restrictions on medical and agricultural products are untenable because “developing countries being unable to match the deep pockets of buyers in developed countries will see these products vanish in times of shortage,” Deepak maintained.

“Export restrictions are a WTO-consistent policy tool that is important to prevent critical domestic shortages of food, medicine and equipment,” he added.

TRIPs flexibilities

Fourth, “if WTO members are serious about trade-related measures aimed at combating Covid-19, then a useful starting point would be to enable the use of TRIPs (trade-related intellectual properties) flexibilities to ensure access to essential medicines, treatments and vaccines at affordable prices,” the Indian envoy argued.

“If additional temporary flexibilities are required (in the TRIPS) to guarantee this fundamental objective, so be it,” India said, arguing that “the pandemic has also highlighted the need for ensuring easier cross-border movement of medical professionals and the need for multilateral initiatives in this respect.”

And fifth, Covid-19 has underlined “the urgent need to build the capacity of developing countries and LDCs in areas like digital skills and broadband infrastructure, rather than negotiating binding rules on e-commerce, which will freeze the non-level playing field against their interests.”

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