The World Trade Organisation’s (WTO) 11th Ministerial Conference (M11) during December 10 to 13 December in Buenos Aires, Argentina, ended in an impasse as the US reneged on the commitment to give a permanent solution on public stockholding for developing countries. It also objected to any reference to the Doha development mandate in the proposed Ministerial Declaration, which was something that was not acceptable to India and many other developing and least developed countries.
Food is a WTO perennial because global rules on agriculture are pretty much the definition of double standards. In one corner is India, whose 2013 National Food Security Act guarantees cheap rice and wheat to two-thirds of its population by buying from farmers at a guaranteed price. Studies suggest tens of millions of people have been brought out of poverty by the law. In the other corner, the US and EU believe the scheme is ‘trade distorting’, and hence must be scrapped.
It’s bad enough to demand the end of a life-saving food policy, but it’s even worse when you reflect that the EU and US protect their own agricultural sectors to the tune of billions of dollars a year through subsidies. This protection doesn’t count as ‘trade distorting’ however, because those countries wrote the rules which say it isn’t.
Meanwhile, in a strongly-worded statement India has blamed “a major country”, which civil society groups term as the USA, for derailing the whole process of finding a permanent solution to the public food stockholding issue. “India is surprised and deeply disappointed that despite an overwhelming majority of Members reiterating it, a major member country has reneged on a commitment made two years ago to deliver a solution of critical importance for addressing hunger in some of the poorest countries of the world. This has the potential to irreversibly damage the credibility of the WTO as a Ministerial decision of all countries present in Nairobi has not been honoured”.
New Delhi, however, said that it managed to protect all its defensive interests. “The US position on a permanent solution led to a collapse of the agriculture negotiations. When there could be no agreement on agriculture, the possibility of an overall declaration also declined. But our food security remains protected as the peace clause is intact,” said Commerce Minister Suresh Prabhu at the meeting.
On public food stockholding, the critics felt the current proposal is far worse than the Peace Clause which itself suffered from several problems in terms of onerous notification requirements, restriction on staple crops which itself is undefined, and that the relevant subsidies do not distort trade or adversely affect the food security of others. “These almost impossible notifications and safeguard conditions have been retained in this text. In addition, higher standards are proposed on safeguards as footnotes, which say such stocks cannot be “exported directly or indirectly”. Again this condition, especially related to indirect exports, is impossible to meet. Overall the text on Domestic Support is biased against developing countries, while going easy on the developed countries.
The biggest takeaway from MC 11 was the commitment from members to secure a deal on fisheries subsidy which delivers on taking commitments for paring illegal, unregulated, unreported (IUU) subsidies by 2019, said Susana Malcorra, Argentinean Minister and chair of MC 11. Members also pledged to improve the reporting of existing fisheries subsidy programmes. “Buenos Aires will be remembered as the fisheries conference. It is here that the talks that were deadlocked for 15 years got moving,” she said.
Pushing back a commitment on curbing IUU subsidies to 2019, despite a number of members eager to have an interim solution with immediate cuts, is a victory for India. The country now has more time to ensure that there are adequate safeguards in place to protect artisenal fisheries.
A work programme on e-commerce was also adopted at the MC 11 which was exactly like the one proposed by India with the old work programme continuing and a two-year continuation of the moratorium on e-commerce linked to the continuation of one on Trade Related Aspects of Intellectual Property Rights (TRIPS) and non-violation complaints.
During MC11, India stood firm on its stand on the fundamental principles of the WTO, including multilateralism, rule-based consensual decision-making, an independent and credible dispute-resolution and appellate process, the centrality of development, which underlies the Doha Development Agenda (DDA), and special and differential treatment (S&DT) for all developing countries.
In addition, members took a number of other ministerial decisions, including extending the practice of not imposing customs duties on electronic transmissions for another two years, and commitment to continue negotiations in all areas. “Development and inclusiveness must remain at the heart of our work. They certainly remain at the core of my priorities in everything we do,” WTO DG Roberto Azevedo said at a press conference at the ministerial meeting.
Ministers expressed their disappointment over the lack of progress, and gave their commitment to move forward on the negotiations related to all remaining relevant issues, including advance work on the three pillars of agriculture (domestic support, market access and export competition) as well as non-agricultural market access, services, development, TRIPS, rules, and trade and environment.
“We have not achieved any multilateral outcomes,” European Union Trade Commissioner Cecilia Malmstrom told a news conference. “The sad reality is that we did not even agree to stop subsidising illegal fishing.” The system requires unanimity among all 164 member-countries.
She said the United States was partly to blame, but other countries also held up progress. “Procedural excuses and vetoes from one member or another, cynical hostage taking, have led to the sobering result of today,” Ms. Malmstrom added.
WTO Director-General Roberto Azevedo said that WTO members needed to do some “real soul searching” about the way forward and realize they cannot get everything they want.
Commerce Minister Prabhu said on 19 December that WTO must incorporate emerging issues if it wants to remain relevant in the changing times and India will organise a “mini ministerial” meeting (30-40 members) of the multilateral body within a few weeks to help realise this objective. “We are in the next few weeks going to organise a major conclave in India wherein we want to bring in the top countries of the world,” Prabhu said.
The idea behind the mini-ministerial was that WTO must also focus on some of the very relevant issues of the world today. “If you say that we are going to discuss only those issues, then probably WTO will be a very good historical institution, which will have a very good place in some of the good regions of the world,” he said.
(The writer is author of World Trade Organisation: Implications for Indian Economy. He is retired Professor of International Trade and can be approached at vasu022@gmail.com)