Showing spine at the WTO negotiations

With just weeks left for WTO members to finalise the post-Bali work programme under the Doha Round, India must be ready with a robust strategy to counter being wrongly blamed for lack of progress in the negotiations.

Updated - July 16, 2015 01:52 am IST

Published - July 16, 2015 01:04 am IST

A file photo of  Indian farmers hold on to a railing as they watch their fellow farmers take out a protest rally against World Trade Organization.

A file photo of Indian farmers hold on to a railing as they watch their fellow farmers take out a protest rally against World Trade Organization.

With just a few weeks left for the World Trade Organization (WTO) members to finalise the post-Bali work programme under the Doha Round, the season for wrongfully blaming India for the deadlock in multilateral trade negotiations at the WTO is back. The stand being taken by the developed countries suggests that they are not willing to abide by what had been agreed to earlier in the Doha negotiations. In contrast, they are pressuring India to take onerous commitments that were not even contemplated during the negotiations. They also seem to be preparing grounds for shifting the blame on India for not yielding to these demands. Further, the developed countries have stalled negotiations on a permanent solution to the problem of public stockholding for food security.

This poses triple challenges for the government — securing India’s interests in the multilateral trade negotiations; explaining its negotiating position to its key trade partners, and fighting the perception battle in the media. How the Department of Commerce and other key arms of the government grapple with these challenges will determine whether India will be wrongly blamed, yet again, for a lack of progress in the negotiations.

As decided at the 2013 Bali Ministerial Conference of the WTO, the post-Bali work programme is required to build on the decisions taken at Bali on agriculture, development and least-developed countries’ issues, as well as all other issues under the Doha mandate that are central to concluding the Doha Round. It is also expected to provide for a permanent solution to the problem of public stockholding for food security purposes, an issue that was partially resolved at Bali through the so-called peace clause.

Farm subsidies Over the past six months, WTO members have engaged intensively to address some of the key impediments in a successful completion of the Doha Round. With the objective of showing some concrete outcomes by the Nairobi Ministerial Conference of the WTO, the Director General of the World Trade Organization, Roberto Azevêdo, has repeatedly exhorted countries to focus on issues that are “doable for all members and not just for some”. This has provided an escape route to the developed countries to ward off demands for cuts in their farm subsidies. This is one of the central issues in the Doha Round, on which significant progress was already made by July 2008. But the developed countries are now using various stratagems to wriggle out of their part of the negotiating deal on agriculture.

It is an open secret that a lowering of ambition on farm subsidies is a thinly veiled attempt at shielding the United States from taking commitments that might require it to make changes to its recent Farm Act. Ironically, a lowering of ambition in farm subsidies is sought to be limited only to the developed countries.

Developments in Geneva suggest that the developed countries are aggressively seeking onerous commitments from India and China that are not part of the negotiating agenda on farm subsidies and were not even contemplated during the entire course of the Doha Round. These relate to curtailing flexibilities for granting subsidies on agriculture inputs and imposing fixed monetary ceilings on certain categories of farm support provided by India and China.

Thus, it would be low ambition for commitments by the developed countries, but extremely high ambition for obligations by India and China. Clearly, at the WTO, some of the developed countries do not mean what they say, nor do they say what they mean.

So, are the developed countries being merely unrealistic in their expectation that India and China would yield to their unreasonable demands? Perhaps not.

Behind the strategy Pressuring developing countries, particularly India, to make concessions that go beyond the negotiating mandate is a part of strategy effectively deployed by the developed countries in the course of the Doha Round whereby they have deflected attention from their own repeated failures to do their part for a possible trade deal. Let me illustrate this. From 2005 onwards, the U.S. has successfully diverted attention from its inability to cut cotton subsidies — a crucial element in the negotiating template — and shifted the blame on India for a lack of progress in negotiations.

India has proved to be a soft target in the past for papering over negotiating inaction by the developed countries. The example of sectoral initiatives in tariffs is particularly relevant. Although the negotiating mandate merely contemplated non-mandatory participation in sectoral initiatives for elimination of tariffs, in an unusual twist to the English language, the developed countries sought to interpret “non-mandatory” to imply mandatory participation by Brazil, China and India in the sectoral initiatives. Understandably, India firmly resisted such pressures, and was wrongly blamed for impeding progress in the negotiations.

Coming to the recent developments, the developed countries would surely be aware that the concessions being sought from India are beyond the scope of the current negotiations and not in conformity with the negotiating mandate. However, India is at a risk of being caught between a rock and a hard place.

How India must respond Agreeing to the commitments sought from it would limit the policy space of the government in respect of certain categories of farm subsidies. This could jeopardise the livelihood of millions of farm households and further exacerbate the agrarian distress. India is fully within its rights to resist pressures for commitments that are beyond the agreed negotiating mandate. However, a resolute stand by India against the unjustified and onerous demands being made on it would provide grounds to the developed countries to blame India, if the post-Bali work programme is not agreed upon by the end of this month, or the Nairobi Ministerial Conference in December 2015 fails to deliver significant results.

This brings us to another crucial question. How should India respond to the onerous demands being made on it? India’s response should have at least four distinct dimensions. First, at the WTO, India should unequivocally resist requests for concessions that are beyond the negotiating mandate. The government would need to replicate the resolve and firmness shown by it last year during the impasse on trade facilitation and food security issues. However, India could indicate its willingness to show movement within the confines of the mandate, provided the developed countries are willing to reciprocate by cutting their farm subsidies and addressing issues of food security and farm livelihood.

India should also actively galvanise support from other developing countries for ensuring that the Doha Round is not concluded without the developed countries making meaningful cuts in their farm support. It should also seek simplification in the tariff structure of the European Union, which is extremely complex and impedes farm exports of developing countries.

Second, the Department of Commerce and the Ministry of External Affairs should work closely to clearly articulate India’s negotiating approach to the capital-based officials of its key trade partners. In the past, at crucial stages in the negotiations, considerable misinformation was circulated and an impression created that India was being rigid and difficult in the negotiations. India was also wrongly projected as being isolated. This pattern could be repeated in the coming few weeks. This needs to be forcefully countered.

India should clearly bring out the unreasonable demands being made on it and elucidate how the onus for slow progress in the negotiations actually lies on the developed countries. Further, India should unequivocally convey to the developed countries that it would not acquiesce to demands that go beyond the negotiating modalities, while the developed countries fail to honour their side of the negotiating mandate.

Third, the Department of Commerce should regularly brief the media about key developments in the negotiations for ensuring that the battle of perception is not lost. Otherwise, there is a risk that the government’s perspective might get drowned in the blitzkrieg by commentators sympathetic to the economic interests of the developed countries.

Assuring the farmer Fourth, the government should assure the stakeholders, particularly the farming community, that it would not bend under unfair demands and pressures of the developed countries. In the absence of such an assurance, the farmers may feel apprehensive about continuity in government support schemes for agriculture.

It is important that the government works out a detailed strategy for each of these four dimensions. Failure to act decisively and firmly on any of these aspects could result in devastating consequences for the country.

During the tea party in Alice in Wonderland, the March Hare and Hatter advise Alice that she should say what she means and mean what she says. If the developed countries had followed this sagacious advice, the Doha Round would not have been in the negotiating equivalent of a rabbit hole for more than a decade. Wisdom lies in concluding the Doha Round by matching the intent of various WTO ministerial declarations and the content of modalities texts with a balanced final outcome. Any further attempt at shielding the U.S. from taking cuts in farm subsidies as required in the Doha negotiating modalities texts on the one hand, but expecting India to take onerous commitments in respect of its farm subsidies that go beyond the existing negotiating mandate on the other, can only erode the credibility of the rule-based multilateral trading system of the WTO.

(Abhijit Das is Head, Centre for WTO Studies, Indian Institute of Foreign Trade, New Delhi. The views expressed are personal.)

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