On subsidies issue, developing nations took a strong position against rich countries
By K R Sudhaman
There are reasons for India to be satisfied with the outcome of the just concluded World Trade Organisation ministerial, the 13th ministerial conference that ended in Abu Dhabi last week. India was represented by its Commerce and Industry Minister Piyush Goyal. Though there was no major achievement at the ministerial where decisions are taken by consensus by the member countries, India should be satisfied as there were no adverse decisions for India in the election year.
Goyal affirmed India's successful navigation through critical issues, safeguarding the interests of the nation's farmers and fishermen, at the Ministerial Conference. He said reinstating the appellate body was considered important so that disputes could be elevated to the WTO for resolution. There was progress on several contentious issues that had not been resolved over many years during discussions generally through MC13. Policy space for the benefit of India's farmers and fishermen continued to be retained, and in every respect, India's interests had been protected to the highest possible level. The fact that no permanent solution on public stockholding for food security purposes could be reached and that the status quo continued was a positive development for India.
In fact, according trade experts , the developing countries including India had made the biggest blunder in the Agreement on Agriculture (AoA) negotiated during the Uruguay Round of GATT formally ratified in 1994 at Marrakesh of allowing developed countries to reduce their subsidies from a high base, while they themselves had a low base of subsidies. Indian delegation was led by the then Commerce Minister Pranab Mukherjee. The GATT ministerial led to setting up of WTO from January one, 1995.
As the GATT ministerial happened at a time when India was recovering from one of the worst balance of payment crisis in 1990-1991, that led to opening up of the economy, very little economic leverage was available to India then. India's quantitative restrictions on exports was dismantled at that time and phased reduction of import tariffs began around that time as part of the economic reforms to liberalise international trade regime. This has had a positive impact on India's trade over time with India's goods and services exports surging towards $ 1 trillion mark.
As Mukherjee used to say then India cannot trade in Sahara, it has to trade with developed countries, which had the wherewithal and economic muscle to trade. India has come a long way since then and it is no longer a pushover and its strength has grown leaps and bounds to be among the top economic powerhouses of the world. Hence the bargaining capacity of India has improved considerably.
With the subsidies classified under different boxes following the GATT ministerial, no real reduction of subsidies by developed countries happened except some shifting of subsidies from one box to another. In Abu Dhabi, India stood firm on its ground to protect the interests of the Indian farmers. Similarly, India did not yield ground on the issue of Fisheries subsidies. Thus there was no headway in these two major MC13 Agenda areas.
On the issue of E-Commerce, the WTO members including India agreed to extend the moratorium on import duties on E-Commerce by another two years, thus maintaining the status quo.
India along with South Africa, successfully blocked the Chinese led Investment Facilitation Agreement as it is a non-trade issue, just like Environment and Labour, which are outside the purview of the WTO and can be discussed in other relevant forums. While Industrial tariff was not a part of the MC13 agenda, efforts by some countries to discuss Industrial Policy Issues were also not agreed to as they were not a part of the Original Marrakesh Framework.
The only major decision to which India agreed was the new disciplines on services domestic regulations supported by 72 WTO members. Though India is not a part of the plurilateral agreement and need not give any new additional commitments, it can benefit from any additional commitments given by other countries, according to international trade expert H C Prasad.
While this agreement is expected to lower trade costs and facilitate services trade by streamlining and simplifying procedures, Prasad feels that the OECD's Services Trade Restrictiveness Index could make a back entry through these regulations and pressurize countries including India to liberalize many services, based on the priorities of developed countries supported by a highly subjective STRI index.
This however is not something “we should be afraid of, but be prepared with our strategies. Since we are not a part of the plurilateral agreement, but benefit from any liberalization by other countries, we are in a better position to use the opportunity,” Prasad said.
However, discussing services at WTO as a part of the complete negotiations with give and take between different sectors and areas is still the First Best if agreed to by WTO members, Prasad opined.
In the last few years, India has been spearheading the cause of the poor in the global stage and at the G20 summit held in September 2023 was perhaps a feather on India's cap as it became the voice of the voiceless south, particularly from African countries. India was instrumental in ensuring African union became a member of the G20 high table.
With Prime Minister Narendra Modi focussing on welfare of the poor on the global stage, India stood strong for its MSMEs, farmers & fishermen even at the 12 WTO ministerial conference The voice of the poor and the vulnerable got strengthened globally by India's stand at the WTO, as Goyal himself had emphasised at that point of time.
India's efforts to bring Members on the table to discuss issues irrespective of the existing geopolitical order has ensured benefit for the developing nations. India has been raising at the WTO meetings not only its own issues but raised the issues of other developing countries, LDCs, poor & vulnerable with great interest.
Goyal after the conclusion of the WTO 12th Ministerial Conference in Geneva in July 2022 had said. India has been 100 percent successful in portraying before the world the priority issues of the developing world including itself. Few countries do attempt to create false campaign, but India obstinate stand thwarted such attempts at the WTO. The WTO ministerials are held once in two year, though there has been some exceptions.
Admitting that India and the Developing countries accepted certain compromising decisions when the WTO was established 30 years ago and during the Uruguay Round of negotiations, Goyal said India today bats on the front foot rather than being fearful on various issues be it Environment, Start-ups, MSMEs or gender equality. This is a result of the confidence of New India. India is able to build consensus & get a Win-Win outcome.
Whether it is related to Agriculture such as MSP, reinforcing the relevance of the Public Stockholding Programme towards fulfilling the National Food Safety Programme or PM Garib Kalyan Scheme, TRIPS Waiver, e-Commerce moratorium, response to covid and fisheries, India no longer succumbs to the pressure of the developed world.
On the WTO Reforms agenda, India has maintained that the basic structure and core principles of WTO including Consensus, S&DT provisions, SDG goals, will have to be retained while making it more contemporary. This will not only be good for the WTO but also for the developing and under-developed countries in the future, besides fostering global trade through transparent means.
(IPA Service)
