The WTO Ministerial Conference (MC12), beginning in Geneva this weekend, is unlikely to offer much to India in terms of potential gains. Be it the long-pending demand for a permanent solution for public stock-holding, a waiver of IP rules for Covid-19 vaccines and medical tools, or a withdrawal of the moratorium on Customs duties on e-transmissions, it may be futile to expect a decision in India’s favour.
At the same time, Indian officials, led by Commerce and Industry Minister Piyush Goyal, cannot afford to lower their guard during the week-long interactions between member countries. Developed nations would not let go of any opportunity to relegate the demands of poorer countries to the margins, and place their interests centre-stage.
We are already witnessing something of this sort in the negotiations taking place in various WTO committees in the run-up to the Ministerial. For instance, on the issue of temporarily waiving TRIPS norms on Covid-19 vaccines and medical tools, the text-based negotiations that have finally started in the TRIPS Council are moving in a direction that is quite different from what was intended in the initial proposal, made by India and South Africa in October 2020.
No mood to relent
The developed countries do not seem to be in a mood to accept anything more than a temporary waiver of intellectual property on Covid vaccines, leaving diagnostics and therapeutics for later negotiations.
Moreover, most rich nations want to limit the waiver to only patents and not extend it to other forms of IP such as trade secrets and manufacturing technology, critical for aiding pharmaceutical producers in developing countries.
What qualifies as a master-stroke by developed countries is their attempt to tie the limited waiver on offer to new TRIPS plus obligations. This includes onerous notification requirements, not required under TRIPS, and anti-diversion clauses that would prevent importing countries from re-exporting or donating unused vaccines to other eligible countries. A permanent solution to the issue of public stock-holding, which was promised to India in 2013 at the WTO Ministerial Conference in Bali, is another area where the concerns of developing countries have steadily been sidelined. The permanent solution, that would allow developing nations to continue with their public stock-holding and administered price (MSP) programmes, continues to be elusive.
With a permanent solution in place, developing countries need not worry about their input and price subsidies of a product exceeding 10 per cent of the value of its output.
A joint proposal recently presented to the WTO by the G-33, supported by India, the African Group and the ACP, on a possible solution, was rejected by many rich countries. The proposal seeks to correct a historical wrong against poorer countries that resulted in limiting their subsidies while allowing most developed countries to protect their doles.
The G-33 proposal suggested that domestic support provided by a developing country for public stock-holding programmes for food security purposes, shall not be subject to reduction commitments.
Where foodstuffs are acquired and released at administered prices, it proposed that the rule of calculating the amount of subsidy by using prices prevailing in 1986-88 as the external reference price should be changed. It further suggested that the base price be based on the average of the last five years, excluding extreme lows and highs. Alternatively, the ERP for 1986-88 should be adjusted for inflation.
The refusal by members such as the US, the UK, the EU and the Cairns group of agriculture exporting countries to accept the solution makes it clear that there would be no resolution of the issue at MC12.
Although India managed to negotiate a peace clause at the Bali Ministerial that protects developing countries against legal action in case subsidy on a crop exceeds the 10 per cent ceiling, it needs a permanent solution fast, as the stringent notification conditions are already creating problems. India invoked the peace clause a couple of years back when its rice subsidies exceeded the ceiling of 10 per cent. It has been facing numerous demands from members for more and more data on all its existing programmes, which is a herculean task to generate.
At the MC12, India has to ensure that a permanent solution, once promised to developing countries as a concession in lieu of support for the trade facilitation agreement, does not get permanently beaten out of shape.
It has to keep highlighting the argument that the WTO’s subsidy entitlements allow the US, Canada, EU and Australia to offer multiple times greater support to their farmers than developing nations. If needed, it should try and link concessions given by it, such as extension of the moratorium on Customs duties on e-transmissions, to a permanent solution.
A study done by UNCTAD has estimated that revenue losses suffered by developing nations every year on account of the moratorium is up to $10 billion. So there is no reason why India should be unconditionally extending it.
The developed countries have strongly supported Singapore’s proposal to exempt food procurement by the World Food Programme from export restrictions put in place by a country. This is something India should continue to resist. New Delhi is rightly demanding that countries should be allowed to export for international food aid and all humanitarian purposes, including government-to-government supplies, from public stocks and it needs to stick to it.
Subsidies for fishing
Indian officials also need to be very alert at the negotiations for curbing harmful fisheries subsidies. They would be under immense pressure to support a pact, purportedly to save the environment, even if the country’s own interests are not protected while developed countries protect their subsidies through various carve-outs.
India has to be clear that subsidies given for fishing in the country’s exclusive economic zone (EEZ) should be exempted from cuts for long years as it would need time to expand and improve its marine economy which supports lakhs of small fisherpeople.
It should not allow the developed world to paint it as the country preventing a deal to save the planet. Indian fisherpeople do very little deep sea or industrial fishing that is mostly responsible for depletion of fish stock and this needs to be reiterated.
While India may have little to gain at the WTO MC12, the country must not lose the war of perceptions that the developed nations are sure to wage over emotive issues such as food security, the environment and public health.
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