WTO meet in Buenos Aires a litmus test for Suresh Prabhu
Much would depend on how commerce minister Suresh Prabhu forcefully articulates India’s positions during the closed-door meetings in Buenos Aires
Even before it opens on 10 December, the Buenos Aires trade ministerial conference is mired in controversy. More than 60 individuals from 20 non-governmental organizations accredited by the World Trade Organization (WTO) to participate in the meeting have been denied permission to enter Argentina, the land of tango, on security grounds. Deborah James, a well-known and respected activist from Washington which coordinates the civil society network called “Our World Is Not For Sale” asked the WTO director general to urgently remedy the situation by intervening with the Argentinean government to “reverse its decision.” “And if the [Argentinean] government maintains its violation of the host country agreement, to bring this issue immediately to the General Council and reschedule the [MC11 or the 11th ministerial conference] when a proper host can be found,” she wrote to Roberto Azevedo, the WTO director general on 4 December. Clearly, something went wrong between the WTO and the Argentinean government and it is not clear who is to be blamed for this fiasco.
Much would depend on how commerce minister Suresh Prabhu forcefully articulates India’s positions during the closed-door meetings in Buenos Aires
Even before it opens on 10 December, the Buenos Aires trade ministerial conference is mired in controversy. More than 60 individuals from 20 non-governmental organizations accredited by the World Trade Organization (WTO) to participate in the meeting have been denied permission to enter Argentina, the land of tango, on security grounds. Deborah James, a well-known and respected activist from Washington which coordinates the civil society network called “Our World Is Not For Sale” asked the WTO director general to urgently remedy the situation by intervening with the Argentinean government to “reverse its decision.” “And if the [Argentinean] government maintains its violation of the host country agreement, to bring this issue immediately to the General Council and reschedule the [MC11 or the 11th ministerial conference] when a proper host can be found,” she wrote to Roberto Azevedo, the WTO director general on 4 December. Clearly, something went wrong between the WTO and the Argentinean government and it is not clear who is to be blamed for this fiasco.
Be that as it may, the Buenos Aires meeting is being held at a particularly difficult period with the multilateral trading system being reduced to tatters. Last Friday, “the Trump administration has pulled out of the United Nations’ ambitious plans to create a more humane global strategy on migration, saying involvement in the process interferes with American sovereignty, and runs counter to US immigration policies,” Partick Wintour, the Guardian’s diplomatic editor, wrote on 3 December. Significantly, the announcement of the US withdrawal from the UN Global Compact came hours before the opening of the UN global conference on migration that began on Monday in Puerto Vallarta, Mexico.
Washington is also adopting intransigent positions on multilateral trade issues scheduled to be discussed in Buenos Aires. It has blocked a ministerial declaration on grounds that it accords primacy to the WTO for global trade liberalization. The US says the trade and development architecture as set out in the founding principles of the WTO must be radically changed so to ensure that India and other developing countries are denied special and differential flexibilities.
More important, a senior US trade official who visited Geneva last month dampened the prospects for credible outcomes in agriculture, including the permanent solution for public stockholding programmes for food security, on grounds that the US grain lobbies will be adversely affected. The US simply wants the Buenos Aires meeting to be a vegetarian roadshow for discussing the institutional reform of the WTO without taking any credible decisions concerning the issues of the Daridra Narayanas, a term coined by Mahatma Gandhi for the wretched of the earth.
Against this backdrop, how the Narendra Modi government is going to press its core developmental concerns at Buenos Aires remains to be seen. The performance of the National Democratic Alliance (NDA) trade ministers over the years at major WTO ministerial summits is somewhat mixed. To start with, in 1999, at the WTO’s third ministerial meeting in Seattle, the first NDA trade minister late Murasoli Maran refused to fall prey to US President Bill Clinton’s pitch for bringing controversial social clauses into global trade. Clinton tried hard to persuade Maran at a luncheon meeting to agree to social clauses such as labour, environment, and other issues into global trading system. Maran simply said No.
Later, the same Maran, in 2001 at the launch of the Doha trade negotiations in Doha, Qatar, almost blocked the meeting on four controversial Singapore issues—trade and investment, trade and competition policy, government procurement, and trade facilitation—on grounds that they are not avowedly part of the WTO agenda. During a telephonic conversation with Prime Minister Atal Bihari Vajpayee to apprise him about the developments when the Doha meeting was almost collapsing, Vajpayee told Maran that he should do what he thinks is right for India. Subsequently, Maran put a tough condition that the four controversial issues will only be negotiated after there is “explicit” consensus among WTO members at the fifth ministerial meeting in September 2003.
After Maran, the next NDA trade minister Arun Shourie, who was there only for few months, took a tough stand on the issue of differentiation among developing countries at an informal mini-ministerial summit in Sydney in December 2002. US trade representative ambassador Robert Zoellick and the European Union trade commissioner Pascal Lamy tried hard to put India and other developing countries like South Korea and Singapore in the category of countries that cannot avail of the flexibilities in the Trade-Related Intellectual Property Rights (TRIPS) agreement for addressing public health emergencies.
The third NDA trade minister Arun Jaitley during the Vajpayee government also took strong nationalist positions at the WTO’s fifth ministerial meeting in Cancun, in 2003. Jaitley formed a formidable alliance with then Malaysian trade minister Rafidah binti Aziz to oppose the four Singapore issues at Cancun. Many developing countries rallied behind Aziz-Jaitley leadership to ensure that the four issues were kept out of the agenda. Thus, the first three NDA trade ministers worked with Prime Minister Vajpayee who gave them a free hand to decide issues as they deemed fit.
The fourth NDA trade minister Nirmala Sitharaman under Prime Minister Narendra Modi led the Indian delegation at the WTO’s 10th ministerial conference in December 2015. Sitharaman, for inexplicable reasons, allowed India’s core demands—on the permanent solution for public stockholding programmes for food security, the special safeguard mechanism for addressing unforeseen surges in imports, and the continuation of the Doha Development Agenda negotiations among others—to be eclipsed at the Nairobi meeting. She allowed the cotton subsidies for poor Indian farmers to be discontinued from this year.
The fifth and current trade minister Suresh Prabhu comes to Buenos Aires when India’s unresolved issues, including the permanent solution with legal certainty and other issues, remains to be addressed. Fortunately for Prabhu, India has built solid support among a large majority of developing and poorest countries in Geneva for rallying behind New Delhi’s core concerns to be finalized at Buenos Aires.
India has ensured support from 100 countries to oppose the new issues that include a new mandate for electronic commerce, investment facilitation and disciplines for micro, small and medium enterprises. In a way, the battle lines are drawn for the Buenos Aires meeting: between the new issues brought by the European Union with some 50 countries on the one side, and India and 100 developing and poorest countries on the other who are calling for resolving the unfinished bread-and-butter issues in the Doha work program.
But much would depend on how Prabhu forcefully articulates India’s positions during the closed-door meetings where ministers need total concentration and tenacity. It is also a litmus test for Prabhu as to how he harnesses the support of other developing countries for addressing the challenges facing more than 400 million Indian farmers at Buenos Aires
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India wants workable solution on public stockholding for food security at WTO meet
India has made it very clear that it will not accept an inferior permanent solution at WTO’s MC11 on public stockholding for food security purposes, says commerce ministry
India will not accept an inferior permanent solution on public stockholding for food security purposes at the Buenos Aires ministerial conference (MC11) of the World Trade Organisation (WTO), Indian commerce ministry officials said on Saturday.
India will not accept an inferior permanent solution on public stockholding for food security purposes at the Buenos Aires ministerial conference (MC11) of the World Trade Organisation (WTO), Indian commerce ministry officials said on Saturday.
“Though India considers a permanent solution on public stockholding for food security purposes to be most mature for harvesting at MC11 because of a clear mandate from Bali and Nairobi, we are very clear that we will not accept an inferior permanent solution. It has to be an improvement over the peace clause and it has to be workable,” the official added, ahead of the MC11 to be held between 10-13 December at the Argentinean capital city.
Under the WTO rules, developing countries such as India need to limit their public procurement of foodgrains such as wheat and rice to within 10% of the value of the crop. After India enacted the National Food Security Act, 2013, which aimed to provide subsidized foodgrains to approximately two-thirds of its 1.3 billion population, the demand for public procurement increased significantly.
At the Bali ministerial conference in December 2013, India secured a so-called “peace clause”. Under it, if India breaches the 10% limit, other member countries will not take legal action under the WTO dispute settlement mechanism. However, there was confusion over whether the temporary reprieve would continue after four years.
The Narendra Modi government after coming to power in 2014 forced developed countries to clarify that the peace clause will continue indefinitely if a permanent solution on the matter cannot be found by MC11.
However, public procurement for any new food programme of the government for food security purposes will not benefit from the indefinite peace clause as the concession is limited to the programmes running in 2013, at the time of the Bali conference. The concession also comes with onerous notification obligations about farm subsidies provided in the previous year. So far only eight countries out of 184 WTO members have notified their farm subsidies till the last year.
While India considers it has covered most of the staple foods under the food security programme and the restrictions on new food programmes will not impact us, the onerous notification conditions make the peace clause unimplementable for India. However, the restrictions on new food programmes is likely to impact other developing countries like Kenya, Zimbabwe and China and India has promised to fight for deletion of the condition.
India also is of the view that elimination of fisheries subsidies which was considered a deliverable may be postponed to the next ministerial with a work programme since there is lack of consensus on how to handle issues such as differential treatment for the resource-poor fishermen in developing countries like India.
India along with China is also seeking a work programme for elimination of trade distorting agriculture subsidies provided by developed countries known as aggregate measurement of support which is not available to developing countries.
On the proposal of setting global e-commerce rules, India is of the view that discussions should continue at various working groups and when discussions mature to a certain level they can be taken up by the general council of the WTO for further action. However, developed countries are pushing for accelerated work programme on e-commerce to be finalized at MC11 while China wants discussions on e-commerce to happen in a single body instead of the various working groups going on at present.
India also sought more transparency in negotiations and has opposed attempts to take decisions in small groups at the MC11 drawing from its sour experience from the Nairobi ministerial in 2015.
