The 12th Ministerial Conference (MC) of the WTO, scheduled from June 12-15, had to be extended by another day by the Director-General in a desperate bid to find a consensus on a small basket of issues. Though opinions are sharply divided on whether the outcome of the MC was a grand success or it delivered little of substance, the perspective from which it is viewed has an important bearing on the conclusions drawn.
The WTO Ministerial Conference is the highest decision-making body in the WTO and it can change the existing rules/create new rules which are binding in perpetuity on its 164 members. In order to make progress in areas of vital interest to it, a country often has to make certain compromises in other areas of the negotiations. Also, the initial negotiating position of a country is often an aspirational statement and the country’s realistic expectations are pegged much lower than its initial demand.
Against this backdrop, we propose to analyse the MC12 outcomes from a purely Indian perspective to assess India’s gains as well as losses.
Broadly speaking, India had three major demands in the areas of agriculture, fisheries subsidies and Trade Related Intellectual Property Rights (TRIPS). It also had a minor demand in agriculture as well as one on trade through electronic transmissions. These demands are discussed separately.
The major demand in agriculture was to have a permanent solution to public stockholding (PSH) for food security purposes worked out. It may be mentioned that as an interim measure to a permanent solution, a peace clause had been negotiated at MC9 in Bali (2013), prohibiting legal challenges to PSH, subject to certain conditions.
Two of the associated demands on the PSH issue at MC12 were to get waivers from the strict conditionalities of the peace clause, viz. for exporting from the public stocks procured at Minimum Support Prices (MSP), especially for government-to-government transactions, and a waiver for including new crops and programmes, introduced after 2013.
The demand for an expedited permanent solution along with waivers on the two issues does not figure in the MC12 outcome documents. However, it may be mentioned here that the peace clause is mandated to continue till a permanent solution is worked out. Therefore, in the absence of a decision on expediting a permanent solution, India is not worse off than before.
The minor demand in agriculture related to exempting purchases by the World Food Programme (WFP) from any export restrictions. India was opposed to granting such a blanket exemption on the grounds that it may be required to meet domestic food shortages and price stability challenges. The MC12 decision stipulating no export restrictions on WFP purchases has a caveat allowing members to exercise their rights under the WTO to address domestic food security challenges. Thus India’s concerns have been met in large measure.
The fisheries subsidies negotiations leading up to MC12 had three main pillars, viz. prohibitions on subsidies for: (a) illegal, unreported, unregulated ( IUU) fishing, (b) overfished stocks, and (c) building capacity for fishing infrastructure which would lead to overfishing in future.
All three categories had a short phase-in period, envisaged for developing countries like India. The final agreement in MC12 is a work-in-progress because, though agreement has been reached on IUU and overfished stocks, India stood firm that without a 25-year phase-in period for building its fishing infrastructure, it would not agree on giving up its policy space.
The rationale is that while the developed countries, China and Taiwan have built their fishing infrastructure with heavy government subsidisation in the past few decades, they literally want to “kick away the ladder” now by not allowing other developing countries to reach the same levels of infrastructure development with government support.
The decision at MC12 is that this and other unaddressed areas from two earlier draft texts would be negotiated within the next four years, otherwise the MC12 agreement would lapse.
It needs to be mentioned that for countries with already built robust fishing infrastructure, fuel subsidies still play an important role in determining the viability of fishing in the Exclusive Economic Zone as well as the high seas. India had proposed a prohibition on non-specific fuel subsidies earlier, but under US and Australian pressure this stipulation has been deleted from the final text.
Thus, on fisheries subsidies, India has not been a loser but will have to negotiate skilfully and hard during the next four years to achieve its developmental aspirations.
On a temporary TRIPS waiver for production of vaccines, therapeutics and diagnostics for tackling Covid-19, the developed countries led by the EU had managed to knock out therapeutics and diagnostics from the draft text. Instead of a TRIPS waiver for vaccines, the EU led Ottawa Group and later the Walker Process at Geneva, which carried out their work in a non-transparent and exclusive manner, proposed only a suspension for “x” years of some compulsory licence provisions of TRIPS in the draft text.
This figures in the final text as well and is of not much significance for India as it is a net exporter of Covid vaccines. However, India, South Africa and 63 other supporting countries have managed to re-insert “therapeutics and diagnostics” in the final agreement, which albeit will have to be negotiated within the next six months.
On the other minor demand of not allowing a temporary moratorium on customs duties on trade through electronic transmissions, the developed countries and China have managed to get the extension till MC13 or December 2024, whichever is earlier.
On balance, we can conclude that while India has not conceded ground on any of its core interests, many of its other demands have been given short shrift.
The writer was India’s Ambassador to the WTO. The views are personal