On the completion of World Trade Organisation’s (WTO) 11th Ministerial Conference (MC11) at Buenos Aires, India might have returned empty handed as a permanent solution to the issue of Public Stock Holding remained elusive due to the adamant attitude of US, despite the fact that it was on the mandated agenda of the MC11.

In the last ministerial conference, MC10, held at Nairobi in 2015, it was decided by all member countries unanimously that a permanent solution would be found by 2017. But the United States went back on its promise and said it was not ready to give a permanent solution to PSH, at least this time, and by its adamant posture over new issues, the US became instrumental in causing the collapse of Buenos Aires MC11.

From the very beginning, the US made it very clear that this issue was not going to get resolved as its interest primarily was in a fast track work program on rule-making in e-commerce, investment facilitation and also limiting fisheries subsidies for illegal and unreported fisheries. Out of these issues, only fisheries subsidy was part of the Doha development Agenda. However, subsidy India wanted that this issue should be sorted out in such a manner that interests of our traditional fishermen do not get hurt. It may be noted that so far as rules of WTO are concerned, unless there is an ‘explicit consensus’ among member countries about inclusion of one or more issues, it can’t be done unless all members agree. However, it is equally true that US and other developed countries have been able to get new issues included by way of pressure, lure or even ‘arm twisting’.

Commerce Minister Suresh Prabhu in his speech at the Plenary session made it very clear that the public food stock holding issue is very dear to India, as it is not a matter of trade. It’s a matter of life and death for more than 800 million people worldwide, a large proportion of whom live in India.Their food security depends upon the public distribution system, based on stock of food maintained by the government. In his later speeches, he stated that this issue is important for poor children suffering from malnutrition who are provided food by public programmes like ‘Anganwadis’.  School-going children are provided mid-day meals in schools, which fulfils their food needs. It thus increases enrolment ratios and reduces drop outs. He also said that improving food security is a global goal, and India is committed to take care of its needs.

The most important thing is that calculation of subsidy for public stock holdings for nations is flawed. On the one hand WTO rules are circumvented by developed countries. For instance, US provides a total subsidy of more $60,000 per farmer and still doesn’t face any hurdle and India which pays hardly $108 per farmer faces objections. The US and other developed countries have cleverly shifted their subsidies to green box, which they are legally not bound to reduce. Further they are also allowed to give aggregate measure of support, which developing countries can’t. Adding insult to injury, the formula for calculating subsidy has been made such that 1986-88 prices are taken as reference prices. According to this provision if during 1986-88 price of wheat was Rs 385 per quintal, and government is procuring wheat today at a price of Rs 1600, Rs 1215 would be considered as subsidy. From any angle this provision is absurd; still US is finding ways and means not to correct it. Therefore, a permanent solution to the issue of PSH is not a concession; it’s merely correction of a wrong done previously.

About e-commerce, India’s stand has been that it is an emerging area, and it can benefit the people in many ways. Therefore, it should develop further. However, Prabhu rightly pointed out that, “India’s view is that gains from e-commerce must not be confused with gains from negotiating binding rules in this area. It is for this reason that we support continuation of the 1998 Work Programme with its non-negotiating mandate.” India made it clear that different issues including e-commerce could be discussed in WTO. But we need to follow a process, and can’t circumvent the defined procedures to accommodate one or more members. Moreover, constantly changing technology in e-commerce calls for a wait-and-watch policy.

During MC11, Prabhu while addressing a press conference said it is advisable to first conclude the agenda mandated in MC10 Nairobi and then move on to other issues. Since, there is a limited scope in WTO to discuss issues, old issues will die down if we burden WTO with new issues. And this can’t be allowed to happen.

The issue of development as underlined in Doha Development Round is important, and that is related to unjustified subsidies given by developed nations, and this can’t be sacrificed. Discussion on Doha Development Round is still pending and that has to be completed.

It was proposed to disallow subsidy for illegal and unreported fishing. The argument behind the proposal is to encourage sustainable fishing to avoid overfishing. However, India’s concern is that there is no mechanism of reporting by Indian traditional fishermen. Therefore, any agreement on Fisheries Subsidies must take into the consideration interests of traditional fishermen.

Denial of a solution to PSH, which was the primary concern of India due to the adamant attitude of the US, on the one hand and obvious opposition to the introduction of new issues by a majority of member countries, leading to an inconclusive MC11, underlines the fact that the Ministerial Conference at Buenos Aires actually failed. Legitimate concerns of developing countries like food security are not getting addressed and developed countries are trying to bind developing countries in a web of rules in e-commerce, investment facilitation etc. to serve the interests of their companies.

Indications from US’s Trump administration are that Washington will follow ‘America First’ with utter disregard for WTO rules. If this attitude of US continues, multilateral institutions like WTO may lose their legitimacy. Indian representatives at WTO might be disappointed that they could not get a permanent solution; they should rather be proud for not getting cowed down by developed countries, as they had to be satisfied with formation of a 70-nation group that would discuss ways to evolve a consensus to bring e-commerce under the WTO ambit.

For the time being, thanks to India’s tough stand, new issues have been kept at bay and issues of DDR are once again in focus. Though there is no guarantee that they will be actually discussed, the developing world has been able to put its point of view across.

(The writer is Associate Professor, PGDAV College, University of Delhi)