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Outcomes of the WTO Ministerial Conference

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December 16, 2017

Why in news?

The 11th biennial ministerial conference of the ‘World Trade Organisation (WTO)’ recently ended.

What is the divide between developing & the developed world?

  • In the late 90s, it was felt that the rules of the emerging global free market economics was tilted in favour of the industrialised and developed countries. 
  • As WTO was also ushering such a world order, the developing world countries raised their grievance in WTO’s Doha Ministerial of 2001.
  • These prominent issues raised were –
  1. Agriculture - Undoing the trade-distorting subsidies provided in the developed countries for farming
  2. Medicines - Relaxing IPR norms for life saving drugs in developing countries
  3. SDT -  Special & Differential Treatment was sought for goods from the weaker countries (to make them competitive internationally)
  • While, negotiations on most of these issues haven’t concluded, the developed countries have been keen to move on to newer issues like ‘e-commerce’.
  • On the contrary, the developing countries want the Doha issues to settled first before taking up newer things as it might distract focus.

How did the current ministerial go?

  • Developed countries - They wanted the ministerial to see the fast-tracking of e-commerce talks but they didn’t make much headway.
  • US, EU & Japan issued a joint statement aimed at China, on trade-distorting practices such as over-capacity and mandating technology transfer policies.
  • The U.S. even argued that the ‘Developing Nation’ tag was being misused by some countries that were rich in absolute GDP terms. 
  • Developing Countries - Contrarily, India and China also submitted a joint proposal to end the trade-distorting farm subsidies of Western nations.
  • For India, although none of its ‘offensive’ interests were achieved, its ‘defensive’ interests remain protected.
  • Hence, despite the stalemate, it has been regarded a partial success for India.

What are the major issues?

  • Food Security Issue - Currently, a temporary ‘Peace Clause’ is in effect.
  • This bars countries from lodging complaints with the WTO against the subsidised food security programs of the developing world. 
  • In this backdrop, India pushed for a ‘permanent solution’ to replace the ‘Peace Clause’ and to safeguard its grain stockpiling & public procurement programs. 
  • While a permanent solution was thwarted by the US, the current ‘peace clause’ remains in place – thereby retaining status quo.
  • Fishing subsidies – These are provided mainly by the developing world yo help their fishermen who are predominantly subsistence fishers.
  • These subsidies has been alleged to be distorting the markets as it affects the businesses of the high-tech industrial fisher countries like Japan & Canada.
  • The developed countires also stressed that, unsustainable fishing was on the rise due to such subsidy policies.
  • Due to opposition from the developing world, this issue has been pushed to the next ministerial in 2019.

What are the challenges ahead?

  • US Withdrawal - Trump administration’s disregard for multilateral forums and agreements was more than visible in the conference.
  • Previously, the US had blocked the reappointment of judges to the appellate body of the WTO. Such moves could weaken the WTO structurally.  
  • Lack of concensus – The stubborn positions of the negotiating blocks has led to certain issues pending for decades.
  • These could effectively render WTO as an inffective forum of engagement. 
  • India’s issue – While India’s GDP may be growing, the country has hundreds of millions living in poverty and without food security.
  • It has been facing an increasing rough WTO table as it tries to balance its soverign responsibility to feed its millions and the pressures against subsidies.

 

Source: The Hindu

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