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India to push for pro-poor agenda at high-level WTO meeting on Sunday

Jun 12, 2022

An aggressive India with a theme built around equitability, humanitarianism and India-first, will enter the crucial 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) that starts on Sunday.

India’s successful mobilisation of 80-odd member nations on agendas like food security, subsidy on fisheries, suspension of Intellectual Property Rights (IPR) on vaccines to improve access for poor nations and WTO reforms will challenge the push by the developed world to gain favourable deliverables from the crucial meet which is going to be held after it's earlier two avatars were called off.

India, ahead of the meeting, has declared a disagreement with three key draft plans on fishing, agriculture and vaccine IPR mooted for deliberations.

Firstly, the push by developed nations has laid down that no subsidy for fishing would be stopped. India is set to emphasise that “no discipline will be accepted in territorial waters.” A large number of developing and underdeveloped nations are backing India.

Secondly, India, on the draft plan for agriculture, will continue protecting its food security programme meant for the poor and assistance provided to farmers in the form of subsidies. India has the backing of 82 of the 125 member nations on the issue, and the push would be for “recognising common but differentiated responses.”

Thirdly, with regards to the draft plan for Covid vaccines, India will reiterate that due to the pandemic, patent rules need to be eased for wider manufacturing of vaccines to help poor nations tackle the pandemic.

Replying to a query about the new draft plans, the Indian ambassador to the WTO, Gajendra Navneet said, “WTO is driven by members, not the chairs or drafts. It has to look at what 80 countries representing two-thirds of the world's population are saying.”

The Indian team, led by commerce and industries minister, Piyush Goyal, is expected to push for the WTO to pursue a 3A - Rating for trade involving availability, accessibility and affordability compared to the A-rating that stands for availability through trade.

WTO RESPONSE TO PANDEMIC

The original proposal circulated by India and South Africa was to allow waiver of all intellectual property rights (IPR) and widen access to technology, not just for Covid vaccines, drugs and devices.

But the ‘compromise draft’ circulated ahead of the meeting talks only about a diluted ‘patent waiver for vaccines’. The draft merely sets out a series of trade-related pledges and objectives in order to support increased resilience to Covid-19 and future pandemics.

In a major boost to a proposal moved by India and South Africa last year to drop the patents on Covid vaccines for wider distribution in poorer nations, Pope Francis, in a statement, batted for improving distribution and access to Covid vaccines for Africa.

Taking to Twitter, he posted “Equitable access to safe and effective vaccines is fundamental to saving lives and livelihoods. Africa must not be left behind. No one is safe until everyone is safe.”

Gajendra Navneet, in conversation with India today said, “The vaccine issue is expected to figure in the deliberations on Monday during the ‘business sessions’, which are also called thematic sessions.”

However, sources say that there is a possibility that the vaccine issue may figure in the deliberations on the first day of the plenary session on Sunday.

Also Read: Food security, greater Covid vax distribution top agenda at WTO meet

The Covid-19 pandemic has caused unprecedented dislocation in the global economy and trade. The WTO is expected to formulate a structured response to the pandemic as a top priority.

The implementation of the proposal to waive patent protections on Covid-19 vaccines temporarily will require easing the existing barriers in issuing compulsory licenses for patents on Covid-19 vaccines. A waiver has been sought for Covid essentials such as vaccines, medicines, diagnostic kits, Personal Protective Equipment (PPE) kits and ventilators.

A large number of WTO members agree that there needs to be a consensus over opting for an IPR waiver to open production of Covid vaccines and drugs on a larger scale along with emergency use authorisation, especially in middle and low-income countries.

However, developed countries and big pharmaceutical companies contend that waiving intellectual property protection for Covid-19 vaccines will not help address the global supply shortage.

They claim that the push for patent waivers is a ‘political theatre’ and does not necessarily imply that others can create safe and effective vaccines, as the process is tough and complicated.

A senior commerce ministry official speaking to India Today said, “Under pressure from the pharma lobby, most developed countries have argued for solutions which essentially meant opposing the proposal.”

India, as the first mover on the issue, feels that the WTO’s response to battling the pandemic should include waiving off intellectual property to enhance supply and production.

However, developed blocs like the EU and countries like the US, UK and Canada are likely to push for the inclusion of elements pertaining to limiting the scope for export restrictions and Trade-Related Intellectual Property Rights (TRIPS) waiver along with crafting permanent disciplines with respect to trade facilitation and market access.

Sources say the proposal faces tough odds and the outcome of the WTO meeting may not be decisive.

Interestingly, the push for the easing of restrictions also includes a definition of eligible members who can avail of the opportunity to expand production. It has been defined in such a way that China, considered to be one of the biggest drug manufacturing hubs, may be kept out.

FOOD SECURITY AND SUBSIDIES

With global food shortages aggravated by the Russia-Ukraine war, agriculture issues are going to be the elephant in the WTO meeting room.

The discussion on agriculture is expected to start on Monday. The draft plan circulated has raised opposition from the Indian side as it involves issues like export restrictions and also questions the need for negotiations while WTO agreements are already in place that addresses the issue.

There would be negotiations on seven agricultural trade topics: public stockholding for food security purposes, trade-distorting domestic subsidies, cotton, market access, the special safeguard mechanism, export competition, export restrictions, and prohibition as one cross-cutting issue, transparency.

Agriculture is a challenging subject to negotiate, and the positions of WTO members in all the seven negotiation areas remain diverse. As the WTO members maintain different positions, the MC12, like in the case of pandemic response, may yield a modest outcome.

For India, the top priority in agricultural negotiations during the WTO meeting would be securing a permanent solution to the issue of Public Stock Holding (PSH). The PSH program is a policy tool used in India to purchase, store and finally distribute food to the poor.

The Indian government buys crops like rice and wheat from the farmers at the minimum support price (MSP), which is generally higher than the prevailing market price. The government then stores and sells these at a low price to ensure food security to more than 800 million poor people.

While governments, for decades, have been under pressure for hikes in the MSP, the idea has faced opposition at high trade tables as Agreement of Agriculture rules limit the ability of the government to purchase food at government-set prices.

The contention from India and several poor nations is that large-scale opposition to India's proposal indicates that the WTO dealings ignore basic human needs. India seeks a fast-track resolution of the issue with no linkage with domestic support.

India does not agree to the exemptions from food restrictions for food purchased for humanitarian purposes by the UN’s World Food Programme (WFP). Nearly 80 nations, as part of a group led by Singapore, are opposing export restrictions on foodstuffs purchased for non-commercial purposes by the WFP.

India disagrees as it feels the proposal will restrict the Indian government’s policy space to deal with domestic food security concerns. That’s why India, along with G-33 nations, is expected to pitch for finding a permanent solution to the issue of public stockholding for food security.

The current WTO rules are tough. They prescribe that a member’s food subsidy bill should stay below the limit of 10 per cent of the value of production based on the reference price of 1986-88.

If India accepts it, the country will breach the WTO ceiling. That’s why India wants the formula for calculating the food subsidy cap, which is based on a 30-year-old benchmark, to be amended.

In 2013, the MC had agreed to put an interim measure known as the Peace Clause and a decision was scheduled to be taken at the MC11 meeting in Buenos Aires.

The Indian side says that “The country’s position on the public food stockpile issue is linked to the survival of 800 million hungry people worldwide.”

The Indian ambassador to WTO, Gajendra Navneet.

The Indian ambassador to the WTO, Navneet, said, "In 1994-95, when the agreements on agriculture were negotiated, there was no idea that India would not only be self-reliant but even emerge as a granary to the world. India didn’t negotiate for that level of production.”

A Kenyan official speaking to India Today said, “There are big players, who, on the issue of food security, have taken a stand that will keep the markets open, especially elimination/restraint on Export Restrictions, including World Food Programme (WFP) procurements, rather than exploring solutions to augment food supplies.”

He added, “India has been a major contributor to the WFP programs over the years, and it has lent extensive support to its immediate and distant neighbours with food supplies. India feels that the food security declaration, other than tokenism, serves no other purpose. We need the WTO’s nod to export food grains from our public stocks for international aid.”

FISHERIES SUBSIDIES

India has outrightly rejected elements of the new draft circulated ahead of the meet.

The WTO has been discussing the elimination of subsidies for illegal, unreported and unregulated fishing, and promoting sustainable fishing for almost 20 years since the Doha round. Like agriculture, this is also an issue of market access versus livelihood.

India has maintained that the last draft on fisheries was “unfair” and “constraining” the lesser developed world which does not have the resources to support their industry and farmers.

Navneet said, “This is a problem created by others. Countries like India are being asked to take responsibility for their mess. India wants a safety net for fishermen in countries like India who aren’t into distant water fishing.”

It is estimated that 34% of current global stocks are overfished compared to 10% in 1974. This means the reserves are being exploited at a pace where the fish population cannot replenish itself.

India and several developing nations contend that the reason behind the unsustainable exploitation of resources is that fishing is a big corporate business.

India contests the fact that, according to the EU, poor countries that allow small fishermen to use traditional fishing vessels deplete the global stock. Meanwhile, EU fishing vessels catch fish from far-off Africa.

Rich countries, led by the EU, the US and Japan provide the most subsidy, 65 per cent of the total annual $35-billion fisheries subsidy. But as these subsidies are largely non-specific or Green Box, they are clear. Compared to this, poor countries mostly give direct support, which the WTO labels as bad.

The negotiations on fisheries subsidies are aimed at broad and practical discipline in marine wild capture fishing and fishing-related activities by prohibiting subsidies to three pillars: (I) Illegal, Unreported Unregulated (IUU) fishing.; (II) Overfished stocks; and (III) Overfishing and Overcapacity.

The key demanders for fisheries subsidy disciplines are the EU, Japan, Australia, New Zealand, Canada, the US, Iceland, Norway, etc. Countries like India, Indonesia, and the African, Caribbean and Pacific Group of States (ACP) group want flexibility under Special and Differential Treatment (SDT).

India has sought that developing countries that do not engage in distant fishing should be exempted from overfishing subsidy prohibitions for at least 25 years, as in the developing and under-developed countries, this sector is still nascent.

However, ahead of the meeting, the new draft plan submitted has not raised hopes of a consensus.

NEW FISHERIES DRAFT

The draft agreement claims that it presents a clean solution that came from the negotiating process.

For example, on the issue of 'territoriality’, the draft talks about, ‘How to ensure that a WTO panel would not decide who has jurisdiction over disputed or overlapping territorial claims.”

The draft also says there is clarity on the provision for subsidies given to vessels not flying the subsidiser’s flag, and that clearer provisions would lead to better understanding among members on how provisions would work for special and differential treatment.

Also Read: | WTO rules against India’s export subsidies: All you need to know

The draft indicates an attempt to ensure members should not be negotiating against each other but against the unrelenting depletion of global fish stocks that are so vital for livelihoods, food security, and a healthy planet.

WTO REFORMS

The critical subject includes resolving the impasse in the Dispute Settlement System (DSS) to preserve the rights and obligations of all WTO members. Member countries are demanding that the resolution of the Appellate Body (AB) impasse needs to precede other reforms.

They demand that the AB must preserve its essential features, namely an independent, two-tier dispute settlement system, automaticity in the launch of proceedings, and decision-making by the Dispute Settlement Body (DSB) by negative consensus, where provided.

On other vital reforms, India has been reaffirming the centrality of Special and Differential Treatment (SDT) as a non-negotiable, treaty-embedded right for developing members and LDCs.

EXTENSION OF E-COMMERCE, TRIPS NON-VIOLATION SITUATION COMPLAINTS (NVSC) MORATORIUMS

The WTO members in 1998 agreed not to charge (moratorium) customs duties on electronic transmission for two years. Then, a call was to be taken by the ministers for a future course.

In the MC12, there are two competing proposals. One favouring the continuation of the moratorium and another co-sponsored by India, Indonesia and South Africa remains quiet on the question of the moratorium on customs duties on electronic transmission.

Still, it stresses the importance of rejuvenating the work programme on E-commerce. So far, there has been no consensus between the two contesting groups.

Another issue is linked to the TRIPS agreement. While countries can launch disputes at the WTO about trade in goods and services, there is a moratorium on IPR.

Also Read: Ukraine-Russia War: Will Putin's War in Ukraine Crash The Global Economy? WTO Says It Will Slow Trade And Global GDP Growth

Under Article 64.2 of the WTO, a ‘moratorium’, i.e., the agreement not to use TRIPS non-violation complaints, was to last up to 1999. Beyond this time, members were to make recommendations to the Ministerial Conference. This moratorium has been extended several times since then. It is expected that MC12 may extend the Moratorium again.

RUSSIA-UKRAINE CONFLICT

Interestingly, the Indian team in Geneva has factored in the fact that there might be attempts to sidetrack the negotiations with the introduction of newer issues.

The dampener is a perception that widely diverse positions and few western countries may attempt to isolate Russia at the WTO over the war in Ukraine.

However, in an assuring note, the WTO head had told Reuters on Wednesday that agreements on cutting fish subsidies and vaccine sharing were "within shouting distance.”

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