What are the hurdles to fair global trade? | Explained

What did the latest WTO ministerial meeting at Abu Dhabi broadly achieve? What were India’s objectives? 

March 10, 2024 02:30 am | Updated 12:55 pm IST

WTO Director-General Ngozi Okonjo-Iweala speaks during the opening ceremony of the WTO ministerial meeting in Abu Dhabi on February 26, 2024.

WTO Director-General Ngozi Okonjo-Iweala speaks during the opening ceremony of the WTO ministerial meeting in Abu Dhabi on February 26, 2024. | Photo Credit: Reuters

The story so far: The World Trade Organization (WTO) held its 13th Ministerial Conference (MC13) at Abu Dhabi in the UAE between February 26 and March 2, which was attended by 166 member countries. At the conclusion of the meeting, a ministerial declaration was adopted that set out a forward-looking, reform agenda for the 30-year-old organisation, which is tasked with overseeing global trade regulations and facilitating smooth cross-border flow of goods, services, investment and people. The members resolved “to preserve and strengthen the ability of the multilateral trading system, with the WTO at its core, to provide meaningful impetus to respond to current trade challenges, take advantage of available opportunities, and ensure the WTO’s proper functioning”.

What are some key decisions?

The ministers took a number of decisions, including renewing the commitment to have a fully and well-functioning dispute settlement system by 2024 and to improve use of the special and differential treatment (S&DT) provisions for developing and least developed countries (LDCs).

Editorial | Tepid trade-offs: On the WTO 13th Ministerial Conference (MC13) in Abu Dhabi

Some of the biggest challenges to the multilateral trading order have come from an increasingly vocal movement across different countries, particularly in developed economies, that seeks to turn inwards and move away from a globalised and relatively harmonised-tariffs approach to world trade. This has come even as the ongoing conflicts in various parts of the world, combined with the sanctions that some states have applied on others over these conflicts, threaten supply chains and the smooth flow of goods and services worldwide. The relative levels of development among the richer nations and the LDCs have also focussed attention on the need to ensure norms do not adopt a ‘one-size-fits-all’ approach.

How did India approach the deliberations?

A central focus of the Indian delegation headed by Union Commerce Minister Piyush Goyal was to try and find resolution on a key concern for India and several other developing economies pertaining to the public stockholding (PSH) programme, which is at the heart of ensuring food security in their countries. The PSH is a vital policy tool for the Indian government to procure crops such as rice and wheat from farmers at minimum support price (MSP), and subsequently store and distribute the foodgrains to the poor. The MSP is normally higher than the prevailing market rates and the government supplies the cereals at a low price to ensure food security for the country’s more than 800 million beneficiaries. However, under WTO norms, a member nation’s food subsidy bill should not exceed 10% of the value of production based on the reference price of 1986-88. Developed nations contend that these kinds of programmes distort global trade in foodgrains, especially by either potentially pushing up or depressing global grain prices.

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Some of the other key concerns are related to the fisheries sector and a moratorium on customs duties on e-commerce trade. India, as a low subsidiser of the fisheries sector, had mooted that developing countries be allowed to give subsidies to their poor fishermen to catch fish within the nation’s exclusive economic zones (EEZs), or up to 200 nautical miles from the shore. It also proposed rich countries needed to stop providing any kind of subsidies for fishing that their nation’s industrialised vessels may carry out in the high seas beyond the EEZs, at least for the next 25 years.

And on e-commerce, India along with several developing nations has been consistently seeking an end to the moratorium in place since 1998 on their ability to levy customs duties on cross-border e-commerce. India has argued that this undermines its ability to generate revenue from a rapidly burgeoning area of global trade.

What were the outcomes at MC13?

On the agriculture front, as the WTO’s Director General Ngozi Okonjo-Iweala acknowledged in her closing speech, this was the first time that there has been a text. “This has been in the works for the past two decades plus. At MC12 we couldn’t even agree on a text. Even though there are challenges, for the first time we have a text,” she observed. Also, on the fisheries front, a consensus accord now appears close to reaching fruition by mid-year.

However, disappointingly for India, the exemption from customs duties for e-commerce will now carry on for at least two more years.

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