Hopes for grand redemption of WTO fade as India sticks to fishing demands

Prospects for a grand redemption of the World Trade Organization dimmed as India stuck to its demands on several fronts during the third day of the trade body’s ministerial conference in Geneva.
 

Indian Commerce Minister Piyush Goyal told a meeting of delegates Tuesday that it would not bend on demands for extensive exceptions on a 20-year negotiation to curb harmful government fishery subsidies, according to a statement on his ministry’s website. 

He also insisted members water down the WTO’s subsidy rules for government-backed food-purchasing programs aimed at feeding poor citizens, delegates in attendance said.

“The Indian delegation has raised everybody’s eyebrows,” Mexican Undersecretary of Foreign Trade Luz Maria de la Mora said in an interview. “You cannot come to a negotiating forum, particularly at this stage, making demands that they brand as non-negotiable.”

Lowered Expectations

The tough stance by one of the world’s largest developing economies could threaten a multi-year effort to conclude a package of small but symbolically important deals and may cement the view that the WTO is no longer a viable forum to address the shortcomings of international commerce.

“We are getting to the tough spot of the negotiations now,” WTO Spokesman Dan Pruzin said in a press briefing. “The not-so-good news is that we are running out of time. It is crunch time.”

The WTO has operated for more than a quarter century on the basis of consensus decision-making -- meaning any one member’s veto can scuttle agreements. That model, critics say, is also why it’s been largely ineffective as a deal-making forum for much of the past decade.

The world’s top trade officials are now mulling the prospect of a more polarized era of trade relations where multilateral deals become a relic and like-minded nations move forward without the holdouts.

“That should be a concern to India and smaller, poorer countries that rely on the certainty of a rules-based system to benefit from trade,” said Chad Bown, a senior fellow at the Peterson Institute for International Economics.. “They risk that being eroded in ways that we don’t know what a replacement would look like.”

Overtime Negotiations
 

Pruzin said delegates may extend the ministerial conference, originally scheduled to conclude on June 15, to try to provide more time to pull off a victory under the leadership of Director-General Ngozi Okonjo-Iweala. But other attendees were pessimistic that there is anything that could convince India to show flexibility. 

Prior to Tuesday, many governments were hopeful that a fisheries agreement -- which aims to help prevent overfishing of oceans -- would be the WTO’s first multilateral accord in almost a decade.

But India is seeking broad exemptions for its fishing industry, including a 25-year phase-in period and a 200-nautical-mile exclusion for its artisanal anglers. “We feel that without agreeing to the 25-year transition period, it will be impossible for us to finalize the negotiations, as policy space is essential for the long-term sustainable growth and prosperity of our low-income fishermen,” Goyal said. 

“There are countries which are taking some very strong positions -- very far-reaching demands -- which weakens the purpose of this agreement,” European Union Executive Vice President Valdis Dombrovskis told reporters.

Brink of Failure

Another EU official said the fisheries talks looked to be on the brink of failure, but added that some countries may be hiding behind India’s position on this and other controversial issues of the meeting. A spokesman said Goyal was unavailable for comment. 

There were also concerns among some delegates that India’s position may jeopardize a pair of broadly supported proposals aimed at alleviating a looming global food crisis and avoid a cascade of international food-export restrictions.

India wants assurances that its so-called public stock-holding program, which buys exclusively from the nation’s farmers and has exported in the past, cannot be challenged at the WTO as illegal.

Key agricultural exporters like the US, Argentina, Australia, Brazil and Canada fundamentally oppose India’s request to stock up unlimited reserves of subsidized crops and then dump them on global markets -- and there doesn’t appear to be much room for compromise.

Vaccine Waiver, E-Commerce
 

It remains unclear whether India’s position will also sink prospects for a pair of deals to waive IP rights for vaccines and to extend the WTO’s ban on digital duties, but several delegates weren’t yet ready to declare defeat as the discussions wound down on Tuesday. 

On the intellectual-property waiver, “there is still work to do but I think there is some optimism that that can be achieved,” Pruzin told reporters. “The others it’s a little bit difficult to say. I think the electronic-commerce moratorium is a challenge.” 

Ultimately, any failure to conclude multilateral agreements won’t unravel WTO’s system of rules that govern more than $28 trillion worth of trade flows each year. But it could be the clearest sign yet that the world’s trading partners are redrawing allegiances along geopolitical lines.