Geopolitics

Will WTO be able to carry out pending reforms at the13 Ministerial Conference at Abu Dhabi?
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Issue Net Edition | Date : 28 Nov , 2023

The World Trade Organisation’s (WTO’s) 13th Ministerial Conference (MC13) will take place from 26 to 29 February 2024 in Abu Dhabi, United Arab Emirates. Trade Ministers from across the world will attend to review the functioning of the multilateral trading system and take measures on the future course actionby WTO. The Conference will be chaired by H.E. Dr Thani bin Ahmed Al Zeyoudi, UAE’s Minister of State for Foreign Trade.

A preparatory meeting of senior officials of 164 WTO member countries was held under the Chairmanship of WTO Director General Dr. Ngozi Okonjo-Iweala at Geneva on October 23-24 to forge consensus on a range of complex topics ahead of forthcoming MC13– a highest decision making body of the WTO. The aim of this meeting is to ensure that members during deliberations are both decisive and effectual.

The meeting focussed on agriculture, food security, fisheries subsidies, dispute settlement system,among other important issues that positively impact lives and livelihoods and contribute to solutions to current global challenges. The DG requested the senior officials to provide the political guidance, input and their involvement that will solve certain problems for laying foundation for a successful MC13.Almost all the members agreed that resolving food security problem should get the highest priority during MC13.

Many senior officials gave the reduction of trade-distorting domesticsupport as their priority and would contribute to a food security outcome however, views differed as to how to progress on this topic. For a large group of developing countries including India, a food security package should also encompass an agreement on new rules applying to developing countries’public stockholding programmes with food purchased at administered price. It should also encompass progress on the reduction of trade-distorting support for cotton subsidies and on a new “special safeguard mechanism” that would allow developing countries to raise tariffs temporarily in the event of a sudden surge in import volumes or a fall in prices.

There was a dedicated discussion on the procurement of food at minimum prices as part of developing countries’ public stock holdingprogrammes for food security purposes. WTO members agreed to pursue a “permanent solution” to the challenges some developing economies said they face under WTO rules when buying food at government-set prices under these programmes.

India’s top priority will be to pitch for an agreement on a ‘permanent solution’ on public stockholding for food security purposes compared to the 2013 Bali ‘peace clause’ to safeguard millions of the hunger-stricken people.While the proposal had received support from around 80 developing member nations at the WTO, other members such as the EU and Brazil linked the peace clause to conditions on export performance and value of agricultural production.

Separately, India had submitted a proposal — 30 for 30 — in May, towards improving the functioning of various WTO committees. The 30 reform areas or changes, which India has proposed, are with respect to the completion of 30 years of functioning of the WTO on December 24, 2024. A permanent solution is crucial since WTO member nations have been raising questions over India’s minimum support price (MSP) programme for food grains, particularly rice, since the subsidy has breached the suggested limit under the trade norms thrice.India has invoked the ‘peace clause’ under WTO norms to protect its food procurement programme against any action from member nations in case the limit is breached.Surprisingly, developed countries ‘members’ positions remained divergent.

Several members called for a strong political signal on the need for MC13 to address food insecurity, including both immediate and longer-term challenges. While some suggested that WTO members could make progress at MC13 on those issues on which consensus could be found.

The other important issue discussed at the senior officials’ meeting was fisheries subsidies. The fisheries subsidies agreement of the WTO prohibits subsidies for Illegal, Unreported and Unregulated (IUU) fishing and overfished stocks. It also restricts subsidies for fishing on the high seas, outside the jurisdiction of coastal countries and Regional Fisheries Management Organizations. The developed countries have not agreed to this agreement in letter and spirit resulting in the great loss to the developing and least developed countries.The officials noted that governments are paying $22 billion a year in subsidies that drive overfishing. These subsidies primarily go to industrial fishing fleets to artificially lower fuel and vessel construction costs while enabling them to catch more fish by fishing farther out to sea and for longer periods of time.

The WTO Agreement on Fisheries Subsidies, adopted at the MC12 on 17 June 2022, marks a major step forward for ocean sustainability by prohibiting harmful fisheries subsidies, which are a key factor in the widespread depletion of the world’s fish stocks.  It is the first broad, binding, multilateral agreement on ocean sustainability, and only the second agreement reached at the WTO since its inception 1995.Members also agreed at MC12 to continue negotiations on outstanding issues, with a view to making recommendations by MC13 for additional provisions that would further enhance the disciplines of the Agreement.

Other controversial issue discussed was functioning of the Appellate Body of the WTO which is an important element of the Dispute Settlement System, hearing appeals against the findings of the panel established by the Dispute Settlement Body (DSB).The United States had been blocking the appointment of new members to the Appellate Body since 2017 resulting in its non-functional. The Appellate Body is a key part of the WTO’s dispute settlement mechanism, responsible for reviewing appeals of trade disputes.

The blocking of new appointments to the Appellate Body had caused a crisis within the WTO, as it hindered the organisation’s ability to effectively resolve trade disputes. This situation has led to a growing number of cases where disputes were left in limbo without a final resolution. It was agreed by the majority of senior officials that this issue must also be settled at the MC13.

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The views expressed are of the author and do not necessarily represent the opinions or policies of the Indian Defence Review.

About the Author

Col (Dr) PK Vasudeva

is author of World Trade Organisation: Implications for Indian Economy, Pearson Education and also a former Professor International Trade.

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