India’s interests at WTO meet
Despite nixing several demands of the developed nations, India was perceived as a “deal-maker” at the WTO’s 12th ministerial conference. — Anilesh S. Mahajan
On the evening of June 16, at the atrium of the WTO’s Geneva headquarters, Union commerce and industry minister Piyush Goyal flashed his trademark broad smile. It was a moment of jubilation as Goyal claimed to have succeeded in putting forth India’s agenda at the 12th ministerial conference of the world body without conceding much to the Western bloc.
Over four days (extended by a day) of intense negotiations at the conference, Goyal held the fort as developed countries pushed hard for emerging economies like India to eliminate subsidies in fisheries. India also blocked Western demands for hard deadlines to implement the previously agreed upon Agreement on Agriculture (AoA), got some TRIPS (Agreement on Trade-Related Aspects of Intellectual Property Rights) waivers for domestic vaccine-makers, and made progress with WTO reforms.
However, back home, leaders of RSS affiliate Swadeshi Jagran Manch (SJM) are unhappy that Goyal had apparently missed the opportunity to get the existing moratorium on custom duties on electronic transmission lifted, which developing countries say favours the developed world. Even before the negotiations started, the SJM published a monograph describing the impact of the moratorium. However, there are issues related to definitions, scope and impact. India asked for intensifying discussions on these for taking a decision on the same.
Goyal’s team, however, argues that overall, India had been perceived as a “deal-maker” at the WTO negotiations this time and not a “deal breaker”, as in the past.
Over the past decade, WTO negotiations had not made much headway due to divergence of views among members on key issues and rising protectionist tendencies globally. Goyal said the achievement of various deals at the 12th ministerial conference reflects that multilaterals have a future. The ‘Geneva package’, as the deals are referred to, includes agreements on curbing harmful fishing subsidies and a temporary patent waiver for production of Covid-19 vaccines. Talks on bringing therapeutics and diagnostics under the patent waiver will begin after six months.
Under the vaccine patent waiver, a country will be able to issue a licence to its domestic pharma companies to produce the vaccine without approval from the patent holder. India and South Africa’s original waiver proposal had called for full freedom to WTO members to remove intellectual property barriers on all Covid-19 response tools, and not just vaccines. Discussions on this specific proposal had reached a deadlock at the TRIPS Council last year. “We have sufficient types of vaccines... So, for the current strains of Covid-19, we do not need the TRIPS waiver. We have supported it more for other developing countries to be able to manufacture vaccines,” Goyal said on his return to New Delhi.
The ‘Geneva package’ bars member countries from levying customs duties on digital streaming services, such as Netflix and Amazon Prime Video, transmission for 3D printing, or services provided by other digital platforms. This puts India up against the US and EU along with China. On this, India got support from South Africa, Pakistan, Indonesia and other nations. By one estimate, 86 of the 95 developing countries are net importers of digital products and five global tech giants are controlling the market. Even before the ministerial conference, trade negotiators from the US and EU had shown urgency in having the moratorium extended. US trade representative Katherine Tai had told American journalists that the said extension of the moratorium was top priority.
Goyal, in his thematic session on e-commerce work programme, stressed that the financial consequences of such a moratorium have mostly been borne by the developing countries. “The moratorium is causing a huge revenue loss to the government apart from hurting our digital development, as domestic players face intense competition from global tech companies,” argues Ashwani Mahajan, national co-convenor of SJM.
At the end of the moratorium negotiations, the US, EU and other countries, which had played their cards in a coordinated manner, may claim victory whereas the final text of the negotiation is seen as a pyrrhic victory for the developing countries bloc, led by India, Pakistan and South Africa, for getting the word “terminate” included for the first time. The embargo on taxation right will end by March 2024.
The moratorium had been placed in 1998 but has gained more traction over the past few years due to the emergence of new digital platforms. In the last two decades, WTO members have not been able to define electronic transmission or its coverage of products. This further complicates taxation of imports, especially in the digital world where the difference between product and services is often overlapping.
However, the bigger challenge for Goyal was to not concede much ground in the negotiations on fishing subsidies. He entered the negotiations determined not to bend to the Western bloc’s demand for extensive exceptions on a 20-year negotiation to curb government fishery subsidies, and has achieved 15 years. “Who could have even thought about it even a month ago. And then, it happened. We played a critical role in it. Who could have imagined India as a deal-maker?” an official privy to New Delhi’s negotiations told INDIA TODAY. The official explained that the agreement on scrapping of subsidies on illegal fishing would have no adverse bearing on India as such practices were absent in the country. “This may impact China and other countries, not us,” said the official.
Domestic lobbies had been apprehensive about the opening up of fisheries for trade negotiations and the future of subsidies. The outcome papers of the negotiations indicate Goyal managed to stand his ground. The minister was also successful in protecting the interests of small and marginal fisherfolk, who operate within the exclusive economic zone (EEZ), by holding on to the policy space and continuation of support extended by governments for them. New Delhi got scrapped an entire chapter from the proposal that could have threatened subsidies for small-scale and artisanal fishing. In the truncated agreement, ministers agreed on pared down disciplines for Illegal, Unreported, Unregulated (IUU) fishing and overfished stocks.
Ranja Sengupta, senior researcher at the Third World Network, says India has got a temporary reprieve from having to discipline its subsidies for fishing up to the EEZ. The comprehensive agreement needs to be achieved in the subsequent ministerial rounds. “But the final impact depends on how India is able to secure a strong, special and differential treatment in the comprehensive agreement,” she added. That will also be a test of India’s ability to make developed countries with industrial fishing fleets take responsibility for years of subsidising and distorting global marine fish production and trade.
Goyal maintained that the agreement on illegal fishing had been achieved without compromising on the interests of poor and marginal fishermen in India. Traditional fisheries in India are about fishing households using relatively small amount of capital and smaller fishing vessels, usually about 20 metres in overall length, to make short trips close to the shores. India’s subsidies are one of the lowest in the world. Union commerce ministry data suggests the subsidy for every fishing family is barely $15 a year whereas some countries extend subsidies to the tune of $75,000 a year.
Heading for the WTO meet, the Indian team was well aware of the “not so great” negotiations in the past on AoA. The brief for Goyal and his team was to not repeat the same on the issue of fishing. “India took a stance against the WTO text, which had sought to institutionalise the existing disparity [in fisheries], and has fought toensure that the mistakes made in the Uruguay round [for AoA] weren’t repeated in the fisheries agreement,” said a top commerce ministry official.
Like agriculture, fisheries too is a politically sensitive subject in India. New Delhi says fishing for the domestic fisherfolk communities was not merely a means of livelihood but a way of living. There are around 200,000 fishing craft in India, of which only 59,000 (less than 30 per cent) are mechanised. The estimated fisheries potential is about 4.4 million tonnes while the marine capture production in 2019 was 3.8 million tonnes.
Apart from protecting the interests of small and marginal fishermen, Goyal also had to seek an overhauling of the AoA. This time, New Delhi had formed a group of 100-odd countries to demand changes in the agreement, including giving an emphasis on domestic food security, running public stockholding without constraints, revisiting the External Reference Price (set at average of 1986-1988 prices) so that the government has greater ability to provide higher support prices, retain the ability to export from public stocks in surplus times to aid members bilaterally and to alleviate food security concerns wherever they arise. These issues continue to find contrarian views in the Western bloc.
“Credit goes to the US at the 12th ministerial conference for allegedly undermining the agriculture negotiations. Washington may never allow a permanent solution; it did the same [at the 11th ministerial conference] in Buenos Aires in December 2017,” said a trade lobbyist from another developing country during the informal conversations at the atrium of the WTO headquarters. This is bound to make negotiations all the more complex for India and the developing bloc in the future. But for now, some big gains have been made by Goyal and his team.
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