WTO Nairobi Ministerial Meeting – What’s at stake for India?
Recently, the WTO Trade Ministers concluded their talks without any commitment on rich countries being asked to check their domestic subsidies. The negotiations exceeded by one day due to lack of consensus among the developed and developing world.
India and other developing countries were particular about the re-affirmation to conclude the 14-year old Doha Round. < Let's begin with the basics of WTO negotiations>
What is Doha Development Round?
It is the latest round of trade negotiations among the WTO members, which started in 2001, to sign a pact to open up world trade by lowering or eliminating trade barriers.
The focus is on helping developing countries join the global marketplace, and boost their economies as a result.
The Doha Round is also known as the Doha Development Agenda.
What are they negotiating?
The goal of any trade talks is to make it easier for goods and services to be bought and sold across national borders.
The negotiations includes:
- Restricting countries’ use of subsidies for farmers and fishermen.
- Lowering taxes and regulatory barriers that affect the cross-border trade in services, such as banking and consulting.
- Negotiating new intellectual property rules on things such as drugs and copyrighted works.
Why developing countries are pressing for conclusion of Doha round?
Basically, the benefits for developing countries depends on the the kind of agreement the negotiators come up with.
However, the developing countries are hoping that stronger restrictions on farm subsidies in developed countries would be good for farmers in the developing world.
What was the outcome of 2013 Bali Ministerial Meeting?
- Protection of the interests of poor farmers and food security.< This is what India wants to be honoured and implemented>
- Exporters from Least developing countries(LDCs), will get duty free, quota free access to markets in foreign countries
- Trade facilitation agreement, to ease the customs clearance.
What is Special Safeguard Mechanism and its need for poor & developing countries?
Basically, SSM will allow developing countries to temporarily increase the import duties on farm products, so as to counter the sudden increase in imports and price falls.< Actually, the developed countries have well-developed and mechanised agriculture along with that, huge subsidies are extended to farmers in these countries>
This mechanism would empower the developing countries to impose additional duties on agri-products, when their imports breach specified ceilings or price.
What’s the problem here?
The negotiations are on the extent to which different categories of developing countries will be allowed to hike duties using the SSM, beyond their tariff.
What are the new issues that have emerged?
- Rich countries are diluting the development dimension. Some developing countries are attempting to categorise nations such as India and China as emerging economies, instead of developing.
- The developed countries are also redefining the developmental aspects.
- Rich countries wanted to revitalise WTO by introducing new issues, often called emerging trade issues:
- Labour and environmental standards
- Global value chains and promotion of supply chains
- Competition & investment provisions
- Environmental and sustainable goods produced using clean and green energy
- Transparency in govt. procurement
- Transparency in state-owned enterprises and designated monopolies
< If these issues are included in the agreement, developing and poor countries feel that these standards or rules might become non-tariff barriers, hurting their exports>
What is India’s stand on these issues?
- India has made it clear that it will not undertake any binding commitments.
- The issues of labour and environment should be taken at concerned international bodies such as ILO and UNFCCC, not at WTO.
- India wants new issues should also include those with a development angle such as easier movement of natural persons, such as skilled professionals.
< Developed countries are fearing large scale migration, on account of increase in skilled manpower in developing countries such as India. India is looking for such concessions so that it's skilled manpower can find access to developed countries market.>
What was India’s demand at Nairobi Meeting?
- India wants the rich countries to drastically reduce their trade distorting farm subsidies.
- India wants on priority that a permanent solution to the issue of public food stock holding in developing countries for the purpose of food security.
- India is also looking for effective implementation of a package for LDCs including duty-free and quota-free market access.
What does draft declaration at Nairobi says?
- A commitment to allow developing nations to use special safeguards to protect farmers against import surges.
- It reflects India’s demand for a reaffirmation from all members to work towards a permanent solution on public stockholding.
- All countries agreed to the elimination of agricultural export subsidies subject to preservation of Special and Differential Treatment for developing countries such as longer phase-out period for transporting and export subsidies for exporting agricultural products.
- Developed countries have committed to remove export subsidies immediately, except for a few agricultural products, and developing countries will do so by 2018.
- However, developing countries will keep the flexibility to cover marketing and transport subsidies for agriculture exports until the end of 2023.
- The talks concluded without any commitment on rich countries to check their domestic subsidies.
- There was division among the WTO members on the issue of the reaffirmation of the Doha mandate.
- However, some of the WTO members excluding India agreed on the timetable to implement a major deal to get rid off tariffs on 201 IT products valued at over $1.3 trillion/annum, and accounting for around 10% of total global trade.