The new US trade representative, Ambassador Robert Lightizer has described India as “a valuable, strategic and economic partner”, underlining the importance of India as a major “player” in shaping the trade agenda at the World Trade Organisation (WTO).
Commerce Minister Nirmala Sitharaman during a brief one-on-one meeting with Lightizer on the sidelines of the Organisation of Economic of Economic Cooperation and Development (OECD) meeting in Paris on June 8 shared their perspectives on several trade issues including the 11th WTO ministerial meeting of the global trade body in Buenos Aires due in December.
Trade ministers from over two dozen countries, including the US and India, sharply differed on their priorities for the Buenos Aires meeting.
Sitharaman said India couldn’t imagine any outcome at Buenos Aires without the mandated permanent solution for public stockholding (PSH) programmes for food security. She said an outcome on special safeguard mechanism for developing countries to curb unforeseen surges in imports of agricultural products must be finalised at the ministerial meeting for addressing continued inequities in global agricultural trade.
Indonesia, South Africa and the coordinator for ACP (Africa, Caribbean and Pacific) countries concurred with India that there must be credible outcomes on the permanent solution for PSH programmes for food security as well as commitments for reducing farm subsidies.
India also warned that it would not agree to commitments for reducing trade-distorting domestic agricultural subsidies, maintaining that the Doha Development Agenda mandated that industrialised countries undertake substantial reduction commitments. India made it clear that any outcome on fisheries subsidies – which is being prioritised as a major deliverable for the Buenos Aires meeting – must provide enhanced special and differential flexibilities for India’s tens of millions of poor and artisanal fishermen who survive on fishing.
India flatly rejected attempts to launch negotiations on e-commerce by the European Union (EU), Japan, Korea and several other countries on grounds that it is not part of the agenda. India will not accept any negotiations on investment facilitation or disciplines for SMEs as proposed by major industrialised countries. Several trade ministers from the EU, Japan, Australia, New Zealand, Brazil, Argentina and Korea, among others, delivered an optimistic assessment about what can be accomplished at Buenos Aires.
These countries pressed for outcomes on fisheries subsidies, domestic regulation in services, trade-distorting domestic support, digital trade, investment facilitation, and small and medium enterprises. Effectively, there is no consensus on what must be accomplished at Buenos Aires, South African trade minister Rob Davies said. Significantly, on a separate track, members of the OECD failed to agree to a common agenda on trade, investment, and climate change because of vehement opposition from the US, which insisted on having its language incorporated in the ministerial declaration. Consequently, the chair for the OECD ministerial conference Anders Samuelsen, the foreign minister of Denmark, issued a statement on his own responsibility on international trade, investment and climate change, which reflected the views of all members except the US.
Samuelsen said there is “recognition that trade is an engine for economic growth, job creation and welfare, and we confirm the importance of international investment and free flow of capital.” He suggested that members, except the US, agree to “the need to stimulate trade by focusing on reducing trade barriers and costs, without lowering international standards, including through trade facilitation and collaboration.”
After the last ministerial meeting in Nairobi in December 2015, there are considerable hopes on truly “developmental” outcomes such as the permanent solution for PSH programmes for food security in developing countries and the special safeguard mechanism for curbing unforeseen surges in imports of agricultural products.
On 29 May, Indonesia issued a non-paper on behalf of the G-33 group of developing and poorest countries to drive home the message of sharp concern over lack of engagement by “some members” for finalising a permanent solution for PSH programmes.
India is a leading member of the G-33 along with Indonesia, China, the Philippines, Korea, Kenya, Nigeria, Cuba, and Bolivia among others. The G-33 members have made sustained efforts over the past three years but there has been little material change because of the continued diversionary tactics adopted by “some members”. The non-paper said: “It is a matter of concern that in the course of the dedicated sessions, some members are still questioning the justifiable objectives behind the need for a permanent solution on PSH for food security purposes and have not engaged in substantive discussions by tabling their [counter] proposals.”
It is common knowledge that Australia, Canada, the European Union, and the US among others have adopted stonewalling and diversionary tactics since the Nairobi meeting in frustrating the G-33 members by raising issues outside the proposals they had submitted. Indonesia said the G-33 had tabled five proposals till now to demand an amendment to the Agreement on Agriculture by inserting “a new Annex 6” to exempt food security purposes for public stockholding for food security purposes from any commitments.
But US, the EU, Canada and Australia among others raised extraneous issues outside the permanent solution. The US, for example, had suggested the need to review the efficacy and trade effects of the existing public stockholding (programmes) for food security purposes, to review the existing WTO rules and policies adopted by members and how these policies are constrained by those rules, and finally to establish best practices and provide funding for capacity building to implement the agreed best practices. Indonesia maintained, “Programmes for the acquisition of foodstuffs at administered prices shall not be required to be accounted for in the Aggregate Measurement of Support (AMS or amber box reduction measures).”
The G-33 has protested against US attempts to take the negotiations away from finding a permanent solution. The Trump administration in Washington is increasingly preoccupied with bilateral trade agreements, and reckons that multilateral trade liberalisation does not bring about positive gains to American workers. India also wants outcomes on the special safeguard mechanism for curbing unforeseen surges in imports of agricultural products and credible improvements in the global trade in services.
It is felt the ministerial meeting at Buenos Aires will be an exercise in futility without the consensus of a permanent solution on PSH programmes for food security in sight. WTO director general Roberto Azevedo delivered a sombre assessment by saying that he cannot see any low-hanging fruits for harvesting in Buenos Aires.
The writer, a retired senior professor of international trade, is author of World Trade Organisation: Implications for Indian Economy. He can be reached at vasu022@gmail.com