What's New :
Target PT, Batch Starts: 27th August, 2022
GS Mains Classes 2023, Batch Starts: 5th Sept.

WTO’s Twelfth Ministerial Conference in Geneva

  • Category
    Economy
  • Published
    6th Jul, 2022

Overview

  • Key highlights of the conference
  • Outcomes
  • Challenges-
    • Implementation challenge
    • Developed Countries interruptions
    • TRIPS
  • About WTO
  • Impact on India
  • Future steps by India

Context

The 12th Ministerial Conference (MC12) of the World Trade Organization (WTO) concluded in Geneva.

  • The 164-member World Trade Organization held its first ministerial conference in nearly five years, following Covid-19 postponements.

Background

Key Highlights of the Conference

  • Aim: To review the functioning of the multilateral trading system, to make general statements and to take action on the future work of the WTO.
  • Key areas of discussions:
    • WTO’s response to the pandemic
    • Fisheries subsidies negotiations
    • Agriculture issues including Public Stockholding for Food security
    • WTO Reforms and Moratorium on Custom Duties on Electronic Transmission
  • India’s demand to seek a permanent solution on public stockholdings (PSH) of food grains being pushed to next MC13 in

>

WTO’s Ministerial Conference

  • The MC is at the very top of WTO’s organisational chart.
  • It meets once every two years and can take decisions on all matters under any multilateral trade agreement.
  • All decisions at the WTO are made collectively and through consensus among member countries at varied councils and committees.

What is the need to focus on WTO reforms?

  • Issue of MSP: Agriculture is the major source of livelihood for India’s 70% of the population. Hence negotiations for issues due to Minimum support price under WTO restrictions are unavoidable for India.
  • Coordination for food security: Food security challenges faced by world after pandemic has shown need to develop coordination for food grains from surplus to deficient regions and helping others.
  • To manage international issues: Vaccine reforms and manufacturing allegations on several developed countries has made important intervention of WTO for such an issue.

Analysis

What are the Outcomes of the conference?

  • WTO Reform:
    • Members reaffirmed the foundational principles of the WTOand committed to an open and inclusive process to reform all its functions, from deliberation to negotiation to monitoring.
    • Notably, they committed to work towards having a well-functioning dispute settlement system accessible to all members by 2024.
  • Agreement on Curtailing Harmful Fishing Subsidies:
    • It would curb ‘harmful’ subsidies on illegal, unreported and unregulated fishing for the next four years, to better protect global fish stocks.
    • Since 2001, member states have been negotiating the banning of subsidies that promote overfishing.
    • India and other developing countries were able to win some concessions in this agreement. They successfully lobbied to remove a section of the proposal that would threaten some subsidies which would assist small-scale artisanal fishing Artisanal and traditional farmers would not face any restrictions under this agreement.
  • Agreement on Global Food Security:
    • Members agreed to a binding decision to exempt food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes, from any export restrictions.
    • In light of the global food shortages and rising prices caused by the war between Ukraine and Russia, the group’s members issued a declaration on the importance of trade in global food security and that they would avoid bans on food exports.
    • However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
  • Agreement on E-commerce Transactions:
    • From 2017-2020, developing countries lost a potential tariff revenue of around USD 50 billion on imports from only 49 digital products.
    • WTO members had first agreed to not impose custom duties on electronic transmissions in 1998, when the internet was still relatively new. The moratorium has been periodically extended since then.
    • However, all members agreed to continue the long standing moratorium on custom duties on e-commerce transmissions until the subsequent Ministerial Conference or until 31st March 2024, depending on whichever comes first.
  • Agreement on ‘Covid-19’ Vaccine Production:
    • WTO members agreed to temporarily waive intellectual property patents on Covid-19 vaccines without the consent of the patent holder for 5 years, so that they can more easily manufacture them domestically.
    • This “will contribute to on-going efforts to concentrate and diversify vaccine manufacturing capacity so that a crisis in one region does not leave others cut off.”
    • The current agreement is a watered down version of the original proposal made by India and South Africa in 2020. They had wanted broader intellectual property waivers on vaccines, treatments and tests.
    • Rich pharmaceutical companies had strongly opposed this, arguing that IP’s do not restrict access to COVID vaccines and that the removal of patent protections gives researchers that quickly produced life-saving vaccines, a negative message.
    • The waiver agreed by the WTO was criticized by advocacy groups for being narrow in scope, as it did not cover all medical tools like diagnostics and treatments.
    • This agreement fails overall to offer an effective and meaningful solution to help increase people’s access to needed medical tools during the pandemic as it does not adequately waive IP on all essential Covid-19 medical tools and it does not apply to all countries.

Issues raised by India

  • On structural balances: India believes that WTO reforms discussions must focus on strengthening its fundamental principles.
  • At this time, reserving Special and Differential Treatment (S&DT), which includes consensus-based decision making, non-discrimination, and special and differential treatment, should not result in the preservation of inherited disparities or aggravate the imbalances.
  • E-commerce Transactions:
  • India had asked the WTO to review the extension of the moratorium on custom duties on e-commerce transactions, which include digitally-traded goods and services.
  • It argued that developing countries faced the brunt of the financial consequences of such a moratorium.
  • On Food Security:
  • WTO should renegotiate subsidy rules for government-backed food purchasing programs aimed at feeding poor citizens in developing and poor countries.
  • Policies of WTO- Government Procurement Agreement (GPA): This was the first time India had included government procurement in a free-trade pact, however, it is only limited to a few central ministries.

What can be the solutions for issues in decisions made under the conference?

  • India offered a proposal in which it took the lead in criticizing the European Union and Brazil's suggestions, both on the process and its goals. It was against an open-ended exercise on WTO amendments.
  • India takes the initiative to suggest reforms for developing countries (Developing countries reform paper "Strengthening the WTO to Promote Development and Inclusion").
  • India wants assurances that its public stock-holding program, which buys exclusively from the nation’s farmers and has exported in the past, cannot be challenged at the WTO as illegal.

About World Trade Organization (WTO)

  • It came into being in 1995. 
  • The WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.
  • Its objective is to help trade flow smoothly, freely and predictably.
  • It has 164 members, accounting for 98% of world trade.
    • It was developed through a series of trade negotiations, or rounds, held under the GATT.
    • GATT is a set of multilateral trade agreements aimed at the abolition of quotas and the reduction of tariff duties among the contracting nations.
    • The WTO’s rules – the agreements – are the result of negotiations between the members.
  • The current set is largely the outcome of the 1986- 94 Uruguay Round negotiations, which included a major revision of the original GATT.
    • The WTO Secretariat is based in Geneva (Switzerland).
  • WTO Ministerial Conference:
    • It is the WTO’s top decision-making body and usually meets every two years.
    • All members of the WTO are involved in the MC and they can take decisions on all matters covered under any multilateral trade agreements.

Conclusion

The issues discussed under the conference are very much significant for Today’s scenario for India and world as a whole especially after pandemic shocks for the economy. However India’s stand on Public stockholdings was unheard but it assured for its consideration.

PRACTICE QUESTION

Q1. What have been the recent issue related to dispute settlement at WTO? Have the policies at WTO worked against the interest of emerging economies like India?

Q2. World trade organisation (WTO) as a multilateral body is facing challenges on various counts. In this light discuss the relevance of WTO and also suggest suitable reform in its functioning.

X

Verifying, please be patient.

Enquire Now