After re-scheduling the 12th Ministerial Conference or MC12 twice, World Trade Organization is convening the meeting next week in Geneva. The MC 12 was initially scheduled to take place in June 2020 in Kazakhstan, but was postponed after outbreak of COVID-19 pandemic. Following this, WTO members agreed to meet on November 30 to December 3, 2021 in Geneva, but Omicron variant of COVID-19 forced them again to schedule the meeting on 12-15 June 2022. The conference is being called at a time when the global economy is passing through a tough time owing to various factors such as crisis in Ukraine, spread of COVID in parts of China, political unrest in South Asia among others.
It is a time when WTO is struggling to remain relevant as a supreme trade body. The negotiating arm of the organization is in peril, after delivering the Trade Facilitation Agreement (TFA) since its establishment. The dispute settlement mechanism of the organization is also in crisis as the US blocked the reappointment of judges. The preceding Ministerial Conference held in 2017, failed to unite members on continuing with the Doha Development Agenda (DDA). Developing countries like China, Turkey blame the body for being largely dominated by traditional economic powers, such as the US and the EU. Members, especially from the developing world, like India, South Africa, and China feel that the WTO has largely failed to protect their interest. Despite these concerns, members are still hopeful of resolving issues through discussion and negotiation under the ambit of WTO. Their faith in WTO is evident from their agreement to meet at the MC12. India also expects the upcoming conference would offer solution to some of the leading issues that are not only import to it but also the world. Among many issues, that India attaches high importance the most critical are e-commerce, fishery subsidy, public stock holding and IPR waiver for COVID 19 vaccine.
India expects MC12 to deliver a permanent solution to the issue of tariffs on digital trade. The discussion on digital trade is stuck in WTO as members are divided on the issue of imposing tariffs on the goods and services traded electronically. The first set of countries primarily representing developed world favour tariff free digital trade while the other group, led by India opposes the idea arguing that with the innovation and development in the electronic industry so many goods like books, music, etc. that were traded physically earlier can now be traded digitally. Importantly developing countries earn more amount of revenue from tariffs than their developed counterparts. Keeping this crucial sector outside the purview of tariffs would bring a huge loss to the public exchequer.
Subsidy on fishery and marine products is another pressing issue to be discussed in the MC12. India, in a recent proposal, reiterated the issue of Special and differential treatment provisions (S&DT) mentioned at MC11. India proposed that the prohibition of unreported and unregulated fishing should not apply to subsidies granted/maintained by developing countries, including LDCs, for fishing within their territorial waters and their Exclusive Economic Zones (EEZs) as well as the high seas for a certain period. India’s concern is shared by many African countries, where fishery and marine produce remains a prominent source of income.
India along with a large group of likeminded countries has been spearheading the demand for waiving off patent rights on COVID-19 vaccines to make it accessible to vulnerable populations in low and middle-income countries. India’s demand is aimed at a uniform non-discriminatory regime for people who have been fully vaccinated. However, India’s proposal has been in deadlock, due to opposition from a few powerful industrialized countries. India anticipates WTO would take this novel decision to waive off the patents from COVID vaccine that would benefit a large section of poor and low income countries around the world.
India, along with G33 group of developing nations has stepped up pressure at the WTO for a permanent solution on public stock holding programs. Public stockholding programs are government schemes to purchase, stockpile and distribute food to people in need. WTO prohibits the practice arguing it as trade distorting. India justifies the practice and claims it crucial to ensure foods security. WTO relaxed the practice under an interim arrangement called ‘peace clause’, devised in 2013. But many countries find it difficult to apply the clause as it necessitates a plentiful of notifications. India a demands permanent solution and expects MC12 would deliver the same.
Despite raising numerous questions about legitimacy of the institution, members are hopeful of solving their problem through discussion at this global forum. Overcoming so many hurdles and postponement of the meeting twice, WTO is convening the ministerial conference in the next week. It is now up to the WTO and its key functionaries to take necessary steps so that the members and stakeholders can continue to have their faith on it and its role in maintaining a rule-based trading system.
Rahul Nath Choudhury is a research fellow at the Indian Council of World Affairs, New Delhi. Views are personal.