India has hardened its position at the World Trade Organisation’s (WTO) meeting here not only on issues relating to e-commerce, but also against investment facilitation as well as the proposed norms regarding participation of small firms in the global marketplace.
On e-commerce, the issue pertains to a ‘moratorium’ that was included in the 1998 ‘Declaration on Global E-commerce,’ adopted by the WTO member nations in May 1998 at the global trade body’s second Ministerial Conference (MC). The MC is the WTO’s highest decision-making body.
According to the WTO, the 1998 declaration on the ‘moratorium’ stated that “member countries will continue their current practice of not imposing customs duties on electronic transmission”. This ‘moratorium’ – which is ‘temporary’ in nature -- gets extended at every MC, which is held once in two years.
However, at the ongoing Buenos Aires MC, India has taken a stand that its consent to extension of this ‘moratorium’ depends on the WTO members agreeing to certain conditions.
In a communication to the WTO, India said its decision on the matter will be subject to the decision of the other WTO members to extend a similar (‘temporary’)moratorium on Non-Violation Complaints (NVC) under the TRIPS (Trade-Related aspects of Intellectual Property rights agreement). NVC refers to a situation where a “government can go to the WTO Dispute Settlement Body even when an agreement (of the WTO) has not been violated (by another country).”
Some countries, particularly from the developed world, are demanding a ‘permanent moratorium’ on imposing customs duties on electronic transmissions. India feels that such a move could reduce the negotiating leverage for developing countries to seek a ‘permanent moratorium’ on NVC. Such a scenario would hurt the generic pharmaceuticals industry in the world, including in India. However, for the time being, WTO members have agreed not to use NVC, and this ‘temporary moratorium’ (agreement not to use NVC) keeps getting extended, like the one on electronic transmissions.
India’s decision on granting its nod to moratorium on electronic transmissions will also be subject to other WTO members agreeing to continue the e-commerce discussions under a ‘Work Programme’ based on the existing mandate as well as guidelines in the relevant WTO bodies as set out in the Work Programme, the communication said. According to commerce minister Suresh Prabhu, “India’s view is that gains from e-commerce must not be confused with gains from negotiating binding rules in this area. It is for this reason that we support continuation of the 1998 Work Programme with its non-negotiating mandate.” On investment facilitation and the proposed norms on small firms, Mr. Prabhu said, “shifting the priority from the Doha Development Agenda issues to non-trade issues like Investment Facilitation and small firms, for which there is no mandate, is difficult to accept.”
(This writer is in Buenos Aires at the invitation of Indian Commerce Ministry)
