India can make a fight of it at WTO

With the curtains having come down on the 11th Ministerial Conference of the WTO held recently at Buenos Aires (MC11), action on global trade talks shifts back to Geneva. In order to understand the challenges that now confront India at the WTO, it is relevant to decipher the silence and read between the lines of the outcomes and deliberations of MC11.

As the WTO membership failed to agree to a ministerial declaration at the end of MC11, the sound of silence was rather eloquent. This was a consequence of the aversion of the US to any mention of three issues — development, multilateralism and Doha Round.

Referring to some of the larger developing countries, the US launched a withering attack on the role of development at the WTO. The US found it troubling that “so many Members appear to believe that they would be better off with exemptions to the rules”. Ironically, during the course of the inconclusive Doha negotiations, it was the US that had secured a slew of exemptions from the application of future trade rules in agriculture.

Even earlier, starting from the early years of GATT, the US and other developed countries had secured exemptions from non-discriminatory trade obligations in order to promote their protectionist agenda in agriculture and textiles sectors for nearly five decades. These are good examples of special and differential treatment for the developed world, something that the US may not want to be reminded about.

Such a brazen attempt at distorting the narrative about exemptions from trade rules should not be allowed to become par for the course. India, along with other developing countries, must strongly counter any attempts at diluting the application of the concept of special and differential treatment in future negotiations at the WTO.

Given the antipathy of the US to the role of development, it came as no surprise that at MC11 it chose to block India’s efforts at securing a permanent solution to the issue of public stockholding for food security. India, and its coalition partners, need to persist in their efforts and not abandon their quest for a permanent solution.

The dogged refusal of the US to even acknowledge the Doha Round and the hesitation of many developing countries to effectively voice their interests is likely to consign the Doha Round to a footnote in history. Certainly not a positive development.

Returning to MC11, there were a few concrete outcomes — fisheries subsidies and electronic commerce, to mention two of them. In the months preceding MC11, intense negotiations were held in Geneva for prohibiting subsidies for illegal, unreported and unregulated (IUU) fishing. However, some basic concepts, including the scope of subsidies sought to be prohibited, could not be resolved in the negotiations. At MC11 a pragmatic decision was taken to continue the negotiations on fisheries subsidies with a view to concluding it in 2019.

While few would argue in favour of subsidies for IUU fishing, India must guard against any prohibition on subsidies that would constrain it from developing its fishing fleet in the future. Given the fact that fishing activities are a matter of survival for millions of fishermen in India, it is important that the country negotiates hard for protecting the interests of its small-scale and artisanal fishermen.

Another outcome of MC11 was to continue the 1998 work programme on electronic commerce. While there was a strong push by some countries to initiate negotiations on this issue, this was resisted by India and a large number of African countries. The consensus decision was to continue discussions in a non-negotiating mode — a vindication of India’s stand.

Turning to the so-called new issues, at MC11 the proponents issued separate joint statements on electronic commerce, investment facilitation and micro, small and medium-sized enterprises (MSME). The statements essentially seek initiation of negotiations at the WTO on these three issues. India has been steadfast in opposing initiation of multilateral negotiations on these new issues. While the joint statements of the proponents do not represent formal outcomes of MC11, these enjoy the support of around 70-80 countries. How should India respond to this emerging situation?

First, the Department of Commerce should consult all relevant stakeholders in order to make a comprehensive and balanced assessment of the implications for India of the likely outcomes of negotiating binding rules on the three issues.

This assessment must be objective, based on hard facts and not on merely on subjective impressions of a few influential individuals. If the assessment so warrants, India should carefully consider recalibrating its position on the three issues.

Second, considerable research is emerging that punctures the narrative of WTO negotiations on e-commerce being good for development. This stream of research is getting drowned by the drumbeat of the proponents of negotiations on this issue. India should take the lead in discussing the research with other developing countries, so that the true nature of the negotiated outcome is understood by all.

Third, at the WTO India should work assiduously to enlarge the coalition of countries that share its concerns on the new issues. This would provide it further strength in the months ahead.

The situation confronting India after MC11 is reminiscent of the position in which the country found itself in 2001 after the launch of the Doha Round. The odds stacked against India were perhaps higher in 2001. Unperturbed by the number of countries arrayed against it or the stinging headlines in the international media against its negotiating approach, within two years India managed to effectively turn the tables on the proponents of the new issues.

Overall, the nature of the deliberation at MC11 is a manifestation of the changing global power dynamics. While the US can prevent outcomes going against its interest, some of the developing countries are now in a position to firmly resist its hegemony at the multilateral level. Given this reality, as countries seek to protect and promote their national interests, we are likely to witness many more pitched battles in the future.

The writer is head, Centre for WTO Studies, IIFT. The views are personal