Trading blows, war continues: How India fares at WTO yet to be decided

The Economic Times, December 22, 2015

By Pradeep S Mehta

After five days of intense negotiations, 162 members of the World Trade Organization (WTO) came to a deal last Saturday in Nairobi to push the agenda, and crucially reassert its relevance. The Indian delegation, led by commerce and industry minister Nirmala Sitharaman, succeeded in getting a balanced deal, which will protect the interests of developing country farmers, as well as advance the quest for global equity.

The fact that a multilaterally agreed trade deal came soon after the adoption of the Sustainable Development Goals agenda in New York and a Climate Change deal in Paris augurs well. They underline the virtues of arriving at negotiated deals, howsoever imperfect they may appear.

The war game, started in 2008 following the collapse of the WTO talks,
is expected to intensify.

With Nairobi, trade multilateralism is back in its new avatar. As a trade minister observed, “Happiness and unhappiness were evenly distributed in Nairobi.” While concluding the ministerial, Kenya’s foreign affairs and trade minister Amina Mohamed underlined that for the first time there was a convergence of interests of the developed and developing world.

Other than decisions on electronic commerce, implementation of the WTO Agreement on Trade-Related Intellectual Property Rights (TRIPS), and a work programme for the advancement of small economies, three major decisions were taken on agriculture. India was steadfast in pursuing the interest of its poor farmers despite the lack of interest from many rich countries.

On the contentious issue of a permanent solution on public stockholding of foodgrain for food security purposes, India successfully delinked it from other issues of the Doha Round of negotiations. It was agreed that negotiations on this should be concluded swiftly.

This means the G-33 group — comprising India, Indonesia et al — could push for such a permanent solution even if there is no progress in other areas of the Doha Round. The G-33, after extensive consultations with domestic stakeholders, should, at the earliest, make its proposal to the WTO to sew up the deal without any further ifs and buts.

On the special safeguard mechanism to protect the interest of farmers from sudden import surges, despite considerable differences with a number of developed countries and some agriculture-exporting developing countries, India maintained its position of not explicitly linking it to market access on agriculture.

The third decision was on export competition in agriculture. Here as well, India gained extra time to phase out its subsidies for agricultural exports which could be tradedistorting. Only in the case of subsidies to cotton export, which has been dealt separately in another decision, was India’s concern not addressed fully, which it did raise in the closing session.

Other than making these considerable gains in all three important areas of our interest, India successfully defended her position on the reaffirmation of the Doha Round of negotiations. This, despite considerable pressure from rich countries to shelve the Doha Round.

While in the Nairobi ministerial declaration, a compromise language was used on this subject, India used flexibility in deciding its position on negotiating modalities to take forward the remaining Doha Round issues.

Another contentious subject was the introduction of so-called ‘new issues’. While India was not in favour of them as it would have put severe pressure on its negotiating capital, it was left open-ended — but with the caveat that negotiations, if any, would need to be agreed by the explicit consensus of all members. This has given the poor countries the necessary flexibility to take part in the discussions on those issues which will help in future in furthering the interests of farmers as well as industries.

Overall, the Nairobi ministerial witnessed the continuation of the battle on various fronts of the international trading system. Given the compromise language in the Nairobi Ministerial Declaration, one may say that India has drawn its battle with the rich as well as with some emerging powers. However, the war game, started in 2008 following the collapse of the WTO talks, is expected to intensify.

This was about creating a new group of WTO emerging country members, such as India, and push them to commit further trade liberalisation. While time will tell how India will play this game by keeping in mind its long-term economic and foreign policy objectives, the current battle will continue.

The writer is Secretary General, CUTS (Consumer Unity & Trust Society) International. Bipul Chatterjee of CUTS contributed to this article

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