Rocky road ahead at WTO

The impasse over agriculture, fisheries subsidies and investment facilitation point to more intense negotiations going forward

With the Abu Dhabi Ministerial Conference of the WTO (MC 13) behind us, it is time to reflect on what happened there and what might lie ahead for India, as well as for this institution. A clear signal emerging from MC 13 is that the WTO, which was already grappling with multiple challenges, faces more rough weather ahead. The lessons that the key players draw from this meeting could determine the future of the WTO as the multilateral institution for negotiating rules on trade issues.

No doubt at MC 13 WTO members adopted the ministerial declaration by consensus. However, taking this as a sign of a robust organisation would be misleading. Problems at the negotiating table, which have been visible over the past decade, appear to have deepened at MC 13. This threatens the credibility of the WTO. Negotiations on issues related to agriculture, fisheries subsidies and investment facilitation provide ample evidence of the ongoing crisis of multilateralism.

In agriculture, on the issue of food security and public stockholding, some of the main players at the negotiating table did not show the necessary political will and sensitivity for addressing the longstanding problem of finalising a permanent solution. It is time that these countries acknowledge the reality that without a successful resolution of this issue, which affects hundreds of millions of poor in developing countries, any meaningful progress in overall agriculture negotiations would not be possible. Simultaneously, India would also need to consider how to keep the coalition of 80 countries on this issue vibrant. In order to overcome the negotiating deadlock on this issue, it would also need to explore new options for a permanent solution.

FISHERIES SUBSIDIES

Let us turn to the issue of fisheries subsidies, which had been hyped as the likely showpiece of MC 13. However, at MC 13 countries failed to clinch a final deal to cut subsidies that contribute to overcapacity and overfishing. As distant water fishing is one of the main reasons for dwindling fish stocks, it would seem reasonable that countries engaged in it should be willing to take some disciplines on their subsidies. However, at MC 13 a few countries almost managed to secure outcomes in the opposite direction. The deal breaker was the attempt by the European Union and China to secure almost a blank cheque for continuing to subsidise their distant water fishing, while imposing stringent conditions on resourcepoor and artisanal fishers in developing countries to benefit from government support. These developments leave us in little doubt that a handful of countries are using sustainability issues at the WTO to promote their mercantilist interests. We could witness similar attempts in other areas of negotiations, including agriculture.

In the context of fisheries subsidies negotiations, it is relevant to briefly discuss a systemic issue. The draft outcome documents shared with the WTO members during the last 12 days of MC 13, contained some key provisions that were substantially different from the earlier versions of the negotiating text. As the new provisions would have significantly tilted the outcome in favour of the countries who have created the problem of overfished stocks in the first place, it is not

Steamrollering last minute deals that go against the interest of a large number of developing countries may be more difficult in future.

surprising that it failed to garner consensus. Steamrollering last minute deals that go against the interest of a large number of developing countries may be more difficult in future. Not only the WTO members, but also the WTO DirectorGeneral, need to take note.

PLURILATERAL AGREEMENTS

On the issue of the Investment Facilitation Agreement (IFA), throughout MC 13 India remained steadfast in its opposition to adding this agreement to the WTO. Permitting agreements among a group of WTO members, referred to as plurilateral agreements, is fraught with multiple risks. If negotiations are initiated without a consensusbased mandate from the entire WTO membership, as was the case with the IFA, developed countries could start such negotiations on the issues of their interest and get the plurilateral agreements on them integrated into the WTO. Not only would this erode the WTO as an institution primarily for multilateral trade agreements, but it would reduce the possibility of issues of interest to the developing countries from progressing in WTO negotiations.

With a plethora of plurilateral negotiations on nontrade issues, such as digital issues, gender, environment, etc., already in the pipeline, there could be a strong apprehension that plurilateral agreements could further tilt the WTO rulebook against India and many other developing countries.

If India had allowed the IFA to get added to the WTO, it would have set a precedent and cleared the path for future plurilateral agreements at the WTO. India’s opposition to the IFA should be seen from this concern for the future.

The Department of Commerce needs to work in close coordination with the Ministry of External Affairs for limiting the adverse diplomatic fallout, if any, from its opposition to IFA and similar other plurilateral agreements in the future. This is particularly relevant as more than 120 members, out of 164, have supported the IFA.

In conclusion, at MC 13 India remained firm in protecting its national interest on various issues, some of which found resonance with a large number of developing countries. However, MC 13 also brought to the fore sharp differences within the ranks of the developing countries. It is in the collective interest of India and the key developing countries to sort out their differences, if these countries want the WTO outcomes to be development friendly. This is particularly important as some of the issues, on which negotiations were deadlocked at Abu Dhabi, will now be addressed in Geneva.