—By Charu Latha
The World Trade Organization (WTO) is an international organisation dealing with the rules of trade between nations. It was established in 1995 as a result of the Uruguay Round negotiations, (1986–94), and consists of 164 member-countries. These 164 members represent 98 per cent of world trade. It is a forum for governments to negotiate trade agreements. WTO aims to promote free trade and also provides a platform to negotiate and settle trade disputes among member-countries. Essentially, the WTO is a place where member governments try to sort out the trade problems they face with each other. The topmost decision-making body of the WTO is the Ministerial Conference (MC), which usually meets every two years. It brings together all members of the WTO and can take decisions on all matters under any multilateral trade agreement. The WTO’s 12th Ministerial Conference (MC12) took place from June 12 to 17, 2022 at WTO headquarters in Geneva, Switzerland.
According to the rules of the WTO, all the decisions are taken through consensus and any member can exercise a veto. The key areas of discussion before the MC12 of WTO were fisheries subsidies negotiations, WTO’s response to the COVID-19 pandemic, WTO reforms, agriculture issues including public stockholding for food security purposes, and moratorium on custom duties on e-commerce transactions. We discuss them below:
- Fisheries subsidies: A multilateral agreement that would curb harmful subsidies on illegal, unregulated, and unreported fishing for the next four years, was passed to protect global fish stocks. It was after 21 years that the members came to a consensus on the banning of subsidies that promote overfishing as it first began in 2001. According to the Minister of Commerce and Industry, India and other developing countries were able to win some concessions in this regard. Some subsidies which would help small-scale artisanal fishing were exempted and will continue to exist even after the agreement.
- Covid-19 vaccine production: Members agreed to temporarily waive intellectual property patents on the COVID-19 vaccine without the consent of the patent holder for 5 years so as to enable their domestic manufacturing. According to the Director-General of WTO, this will contribute to the efforts to diversify vaccine manufacturing capacity. However, countries with the capacity to produce vaccines have been encouraged not to avail of the waiver which also includes India. Critics have argued that the agreement was too narrow in scope as it did not cover other medical tools like diagnostics and therapeutics necessary for an effective solution to improve access to medical tools for all the people. It was criticised as it is only a partial waiver and a temporary solution and does not apply to all the countries.
- WTO reform: The founding principles of WTO were reaffirmed. Members committed to reforming its functions from deliberation to negotiation to monitoring in an inclusive manner. Members also agreed on working towards having a well-functioning dispute settlement system that is accessible to all members by 2024.
- Food security: The members agreed not to impose any export restriction on the food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes. The members also agreed to avoid bans on food exports in the light of the recent global food shortages and rising prices especially impacted by the Russia-Ukraine conflict. However, countries would be allowed to impose restrictions on exports to protect their domestic food security needs. With respect to India’s recent ban on wheat exports, it can continue to do so for food security purposes but also has to be careful as it will be under the scrutiny of the members if the measures taken are not according to the WTO rules. India’s demand to allow it to export food from its public stockholdings to other countries and to address the needs of low-income and poor farmers in developing countries will be discussed in the next ministerial conference (MC13).
- E-commerce transactions: WTO has extended the moratorium on customs duties on e-commerce transactions until the next ministerial conference or until March 31, 2024, whichever is earlier. Many businesses were worried that moratorium on the e-commerce transactions would come to an end during this conference. India had requested for a review of the extension of the moratorium on custom duties on e-commerce transactions, which include digitally traded goods and services. India argued that the financial consequences of the moratorium, in terms of loss of potential tariff revenue, are to be borne by developing countries like India. However, all members agreed on the extension of the moratorium.
The negotiations came to conclusion after six days of the conference. The negotiations were considered successful amid the geopolitical tension and conflict. The WTO Director-General claimed that the conference resulted in an “unprecedented package of agreements”. The Indian minister of commerce and industry claimed to have been completely satisfied with the outcomes as the agreements have protected the interests of India’s farmers, fishermen, and MSMEs in the conference.
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