WTO ministerial: Agri reforms to e-com, India to stand ground on key issues

India has found support from a group of developing nations at the WTO, including Africa on this issue. However, developed countries view this as a subsidy for farmers and as a distortion to trade

Trade ministers from 164 member countries of the World Trade Organization (WTO) are set to gather in Abu Dhabi next week for the 13th Ministerial (MC13), finding solutions to key issues in global trade.

The issues include global rules to protect fish stock, agriculture, food security, a temporary absence of customs duties on electronic transactions, as well the WTO’s reforms related to dispute settlement.

The ministerial will take place from February 26 to 29. Here are the key issues and India’s stand on them.

Food security & agri reforms

On top of the agenda is to fast-track its long-pending demand for a “permanent solution” to the issue of public stockholding, agreed upon over a decade ago.

The clause aimed at shielding developing countries from being legally challenged over the so-called subsidies.

Through its public stockholding, the Indian government procures food grains at predetermined prices and distributes them through the public distribution system. The policy tool is used by the government to preserve food security. India has found support from a group of developing nations, including African ones, on this matter. However, developed countries view this as a subsidy for farmers and a distortion to trade. A permanent solution is crucial since some developed countries have been raising questions over India’s minimum support price (MSP) programme for food grains, particularly rice, since the subsidy has breached the suggested limit under WTO trade norms thrice.

India has invoked the “peace clause” under WTO norms to protect its food procurement programme against any action from member nations in case the limit is breached. The country has always maintained its priority to protect the interests of poor and vulnerable farmers, besides taking care of the food security needs of a large section of the population.

Fisheries subsidies

During the previous ministerial conference in 2022, WTO member nations adopted an agreement to stop government subsidies for illegal, unreported and unregulated fishing, seen as responsible for the depletion of the world’s fish stocks.

At MC13, the priority will be to ratify the agreement on fisheries subsidies, which will require acceptance by two-thirds of the 164 WTO members. The WTO expects as many as 70 countries to ratify the agreement before the ministerial. India has not yet ratified the pact.

Completing the second wave of negotiations on outstanding issues, including subsidies that result in overfishing, will also be the focus.

India will continue to argue that the subsidies given by the country are substantially less than by developed nations and will oppose any move to scrap the payouts for its fishing community.

India says developing countries should be allowed to continue subsidies for catching fish within exclusive economic zones (EEZs) — up to 200 nautical miles beyond territorial waters. With about 9 million people dependent on the sector, India has 25 per cent of the world’s fishermen. 

Besides, developed countries engaged in fishing beyond this zone should stop providing any kind of subsidies for the next 25 years, according to Indian government officials.

E-commerce

Under a WTO moratorium, countries do not impose customs duties on cross-border e-commerce transactions.

Since 1998, WTO member nations have periodically agreed to extend the moratorium. The last extension was agreed upon during the previous MC. The moratorium is set to lapse at MC13, unless a decision is taken to extend it.

WTO member nations have been divided on the matter. Developing countries, including India, have been battling for policy space to impose customs duties on electronic transmissions, holding that the moratorium has adversely impacted their revenue collection.

On the other hand, developed jurisdictions such as the United Kingdom, Canada, the European Union, and Australia do not want imposition of customs duties on electronic transmission until the next MC. Most developed countries say the exemption of customs duty has supported a “stable and predictable environment” for digital trade to thrive.

At the upcoming ministerial, India will continue to oppose the continuation of exemption, and will point out the lack of clarity with respect to the definition of electronic transmission, as well as the potential loss of customs revenue. 

Dispute settlement and other issues

India is not only pushing for the two-tier dispute resolution system at the WTO but also for the restoration of a rule-based and independent dispute settlement body. 

It also wants to retain the consensus-based decision-making principles. Reforming the dispute settlement system, including the restoration of the appellate body, the highest dispute settlement authority, is also one of the key priorities for India.

Developed countries have been advocating changes in the dispute system, citing the “inefficiencies and rigidity” of the WTO’s judiciary.

While for the first time at any ministerial trade ministers will engage in a dedicated session on sustainable development, Indian officials said they would oppose any work programme or a negotiation mandate on non-trade issues such as the environment, gender and micro, small and medium enterprises.

India will continue to maintain its stand that labour and the environment are non-trade issues and they should not be discussed at the WTO. Trade barriers in the guise of sustainable development should not be erected.

India says these can be discussed at different multilateral forums.