Geopolitics

India’s Firm Stand on Agriculture and Non-Trade Issues at the 13th Ministerial Conference of the WTO
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Issue Net Edition | Date : 20 Feb , 2024

All the 164 Members of the World Trade Organisatio(WTO) are keeping their fingers crossed for the outcome of 13th Ministerial Conference (MC13) of the WTO, slated to take place in Abu Dhabi on 26-29 February 2024. MC is the highest decision making body of the Geneva-based multilateral trade body. The members promise to be a pivotal moment for international trade negotiations for reaffirming their commitment to multilateralism and a rules-based global system.

The world’s trade ministers could put the final touches to a large number of issues like Agriculture (food safety, stock holding), fisheries subsidies, Covid Booster,Appellate Body of Dispute Settlement Undertaking, Non-trade issues and others . However, several issues remain stuck in the mud ahead of the MC13 because of lack of consensus. The stage is set for crucial talks on liberalisation, sustainable development, and addressing pressing global challenges. Big deals are unlikely to be settled since these require full consensus of 164 member states.

India is determined not to engage in any agricultural issue at MC-13 unless the members first find a permanent solution to the issue of public stockholding (PSH), the core of the country’s public procurement system, which aims at food security of about 800 million poor people and guarantees minimum support price (MSP) to 95.3 million subsistence-level farmers.

According to WTO rules, member countries are required to limit the amount of domestic support they provide to their agricultural producers. This is because excessive subsidies can distort international trade. Many countries express concern about India’s subsidy to its farmers, saying it will affect the global agricultural business. The MC12 outcome package on agriculture comprised a Ministerial Declaration on the emergency response to food insecurity and a Ministerial Decision on exempting World Food Programme (WFP) humanitarian food purchases from export prohibitions or restrictions.

Unlike developed countries that have rich farm owners, most of the Indian farmers are poor, hence they need Minimum Support Prise (MSP), which helps in building a PSH to ensure food security programmes such as the Prime Minister Garib Kalyan Ann Yojana (PMGKAY), providing free ration to 813.50 million poor people every month. India is willing to discuss other agenda of developed countries such as farm subsidies and restrictions on exports of food grains, provided the members first agree on a permanent solution to PSHthough “peace clause” was accorded to India which lapsed in 2003. India proposes that something like the peace clause should be retained but only for developing countries, so that some subsidies are free from the possibility of countervailing duty.  

Farmers started protesting on February 15, 2024 in India with a new set of demands including a legal guarantee of MSP for crops and India’s withdrawal from the WTO. The demand of the farmers for the withdrawal from WTO cannot be accepted as it has serious implications on food security issues.

During the WTO’s last ministerial meeting MC12, held at Geneva in June 2022, trade ministers managed to nail down a historic agreement banning harmful fisheries subsidies, after more than two decades of negotiations.The agreement banned subsidies that contribute to fishing that is illegal, unreported or unregulated, as well as for fishing of overstretched stocks and in unregulated high seas, with additional flexibility baked in for developing nations. The agreement, which has yet to take effect, was seen as a major achievement, marking just the second accord concluded by the WTO’s full membership since the global trade body was created in 1995. Members are aiming to finalise a “second wave” of negotiations towards broadening the net to also include a ban on subsidies that contribute to overfishing more broadly at MC13.

Developed countries are keen to start formal discussions on non-trade issues like sustainability. India would like them to take up these issues at appropriate global forums like UN, Food and Agricultural Organisation (FAO), International Labour Organisation (ILO) and so on rather than in the multilateral trade bodyWTO.  India is set to challenge the inclusion of non-trade issues, such as environment, gender, and Micro,Small and Medium Enterprises (MSMEs), at the MC13.

Expressing concerns over the emerging trend of using environmental measures as protectionist non-tariff measures, India is committed to the causes of the environment, labour reforms and women empowerment, but it will not support the developed nations’ agenda to use the multilateral trade organisation WTO.

Despite the very vocal resistance from pharmaceutical companies and their host countries WTO members in 2022 agreed to a temporary patent waiver for Covid-19 vaccines aimed at providing more equitable access to jabs. However, they pushed off waiver to extend to other patent products needed to fight pandemic like other treatment or tests. Hopefully India and South Africa which fought for the waiver of patents in 2022 will continue their fight on waiver clause at MC13 as and when a new variant of Covid19 springs up in future including other tests and treatment.

WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. The losing member country in trade dispute can appeal for redressal in the Appellate Body of the Dispute Settlement Undertaking of the WTO. It is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought by Members.

The dispute settlement system of the WTO is, due to the paralysis of the WTO Appellate Body, in an existential crisis. This crisis is a major governance failure of the WTO. At the MC12 in June 2022, WTO Members committed themselves to address this failure. The US has blocked the appointment of new members to the Appellate Body, and thus it has not been able to conduct its work. The US criticism concerns the Appellate Body exceeding its powers, including which issues fall within the Appellate Body’s mandate. It is therefore essential for the smooth running of the Appellate Body the matter is taken up at MC13 lest the system falls flat affecting WTO.

It is hoped that the wishes of WTO Director-General Ngozi Okonjo-Iweala are fulfilled for the success of MC13 where majority of the issues are settled with consensus of members.

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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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