The Changing Landscape of the WTO and India

By RV Anuradha

A total of 164 WTO member countries ended the 12th Ministerial Conference (MC-12) in style in the early hours of June 17. The two previous ministerial conferences (Nairobi in 2015 and Buenos Aires in 2017) had demonstrated growing fissures between WTO members. The dispute settlement system has also been dysfunctional since 2019, due to the US blocking WTO appellate body members, which has only heightened concerns about its adequacy. . MC-12 was therefore a breath of fresh air and a crucial reaffirmation for the WTO.

As with a tenuously elaborate outcome, there was a certain amount of give and take; but there are also important avenues for effective intervention to ensure fair and equitable rules in a rapidly changing global economic landscape, where the mantra of “free trade” is increasingly characterized as resilience, security and national capacity. A few of the main ones are discussed below:

(i) The MC12 “Outcome Document” stresses the need for reform of the WTO, including the revival of its dispute settlement function. It also notes the links between environment and sustainable development and the multilateral trading system. India will need to forge alliances with other developing countries to ensure that these discussions take into account “sustainability” for all, with due regard to the balance of rights and obligations under multilateral agreements. on the environment. This is particularly relevant in the context of EU border carbon adjustment measures that require imported products to meet the same level of emission standards that the EU implements. The UK and Canada could follow suit. These measures do not take into account the multilaterally agreed rules on different emission standards depending on the state of development and aim to protect the competitiveness of the domestic industry of the importing country – these must be addressed effectively in WTO rules on trade and sustainability.

In a recent submission to the General Council, India, along with several other developing countries, stressed that “WTO reform does not mean accepting inherited inequalities or new proposals that would deepen imbalances”, and that any reform must be based on principles of inclusiveness and development. This is particularly relevant to the design of trade rules governing subsidies which have traditionally provided substantial policy space for industrialization and agriculture in developed countries, but limited that in developing countries.

Read also | The outcomes of the WTO Ministerial meeting and their impact on developing countries

(ii) The TRIPS waiver decision was perhaps the most anticipated and controversial of MC12. While the decision’s limited intellectual property (IP) waiver for Covid-19 vaccines was a compromise from India and South Africa’s original proposal, it includes the commitment that members will decide whether to extend the waiver to Covid-19 diagnostics and treatments by December 2022. is an opportunity that must be pursued tenaciously. Another MC-12 statement, focusing on the response to Covid-19 and other future pandemics, stresses the need to build on lessons learned and ensure preparedness for any future pandemic, including intellectual property and technology transfer. Working with like-minded countries to ensure a meaningful way forward to implement this would be essential for any real preparedness.

(iii) A permanent solution for public stockholding (PSH) for food security purposes has eluded India and other developing countries since 2015. Nevertheless, the limited protection afforded by the peace clause of Bali 2013 continues to protect our PSH programs. Looking ahead to MC-12, more than 80 developing countries have agreed on a proposal for a permanent solution; it is important to continue this to make it a reality.

(iv) On food security, MC-12 saw a decision on the provision of food to the UN World Food Program for humanitarian purposes, but not on government-to-government (G-to-G) agreements for the export of food from PSH stocks to respond to a food security crisis. However, an MC-12 statement on emergency responses to food insecurity requiring accessibility and affordability of food for those in need presents a window of opportunity to work towards the latter.

(v) Members of the WTO have, since 1998, maintained a moratorium on customs duties on electronic transmissions. India and South Africa have raised concerns about the resulting loss of revenue. A 2019 UNCTAD study highlighted that developing countries, as net importers of digitized products, lose tariff revenue (~$10 billion in 2017) due to the moratorium. The OECD, however, argued that the moratorium was important for increasing consumer welfare and export competitiveness. Although the moratorium has been extended for two years, it is important to gather data on the pros and cons of any further extension.

(vi) A landmark new agreement on fisheries subsidies for illegal, unreported and unregulated fishing activities demonstrated the WTO’s ability to address environmental and sustainability issues. Several items relating to subsidies that contribute to overfishing/overcapacity have been left open for a later date. Work is therefore needed on two fronts: a clear national strategy for fisheries management while ensuring adequate protection for traditional subsistence fishing, and the preparation of fair rules at the WTO for overfishing and overcapacity, while safeguarding our interests as a developing nation.

Read also | FM Nirmala Sitharaman calls on WTO to allow India to export grain from official reserves

(vii) India also needs a coherent strategy to harmonize its position under its bilateral FTAs ​​and the WTO, so that one does not undermine the other. Our FTAs ​​with the UK, EU and others will venture into areas such as labor and the environment. These should ensure that the crucial balance struck in multilateral environmental agreements (eg UNFCCC) or ILO conventions is not compromised.

The author is a partner, Clarus Law Associates, New Delhi.

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