WTO talks end sans decision on key issues; duty moratorium on e-commerce trade extended again

PTI, Mar 2, 2024, 9:18 AM IST

Credit: X / @NOIweala

Abu Dhabi: The talks at the WTO’s ministerial conference ended with no decision on key issues such as finding a permanent solution to public food stockpile and on curbing fisheries subsidies, but the members agreed to further extend the moratorium on imposing import duties on e-commerce trade for two more years.

The 13th ministerial conference (MC13) also managed to get at least five more outcomes such as new disciplines on domestic regulation for services, formal joining of Comoros and Timor-Leste as members of the WTO, and least developing countries continuing to get the benefits of LDC even three years after graduation.

Commerce and Industry Minister Piyush Goyal said it is a ”good outcome and we are completely satisfied”.

He said that a lot of issues continue to make progress in terms of discussions.

”Progress was made on several contentious issues which have not been closed for many years but forward movement is always a sign of possible closure going forward,” he told reporters here.

India successfully pushed the food security issue and the country did not yield any ground on protecting the interest of poor farmers and fishermen as well as on other issues.

Despite the four days of hectic parleys getting extended for a day, the 166-member World Trade Organisation (WTO) was not able to reach a common ground for resolving the food security issue, a demand raised prominently by India as it was crucial for the livelihood of 800 million people across the globe, and curbing subsidies that leads to overfishing and over capacity.

The Cairns group, comprising countries like Australia and Brazil, has claimed that public stockholding is market-distorting and that there should be no export restrictions. Food-importing countries like Japan and Singapore are pushing for predictability in farm policies.

On the other hand, the US wants market access for its agri commodities, and the EU wants a cut in subsidies.

New Delhi was pressing for a permanent solution to the issue of public stock holding (PSH) of grains for food security programmes and has asked developed countries engaged in distant water fishing to stop providing any kind of subsidies for 25 years.

Experts said that there should not be any comparison between the fishermen of rich nations and those of developing countries. In one of the developed countries, the fisheries subsidies is over USD 80,000 per fisherman, while in India it is about USD 38 per fisherman.

India and South Africa also blocked a proposal led by China on investment facilitation stating that the agenda is out of the WTO mandate. India has also blocked a proposal of the European Union on industrial policy.

PSH programme is a policy tool under which the government procures crops like rice and wheat from farmers at a minimum support price (MSP), stores and distributes foodgrains to the poor under various welfare schemes.

As part of a permanent solution, India has asked for measures like amendments in the formula to calculate the food subsidy cap.

Developing nations including India were asking for updating the external reference prices used to calculate market price support in public stockholding, which are currently based on 1986-88 reference prices.

Lack of decision on public stockholding does not impact government procurement of foodgrains and public distribution system as India has had a permanent peace clause in perpetuity since 2014.

Under the peace clause, India’s intervention in the food grain markets like procuring certain agri commodities at a minimum support price for livelihood security of farmers and poor cannot be challenged in the dispute settlement system of the WTO.

On another key demand by India on reviving the system of appeal in the dispute settlement system, the ministers decided to speed up the discussions on the issue of appeal and review.

According to a draft ministerial declaration, the discussion by officials on a fully and well-functioning dispute settlement system accessible to all members by 2024 would also focus on all unresolved issues.

On fisheries where India is asking for a moratorium on subsidies for distant water fishing for 25 years by countries like China, Norway, Japan which have large fleets, there has been no agreement as members were not able to converge their views.

Fishing beyond 200 nautical miles from the seashores of a country is termed distant water fishing. Due to no word in the declaration on the issue, India also gets to keep its subsidy to its fishermen.

Another outcome of the conference was related to an agreement on LDC Graduation.

At the meeting, it was decided to keep this concession for LDCs for 3 years.

Though the e-commerce taxation moratorium got extended, the ministers agreed to continue to re-invigorate the work under the Work Programme on Electronic Commerce, taking into account the economic, financial and development needs of developing and least-developed country members.

India also successfully managed to keep non-trade issues out of the agenda.

India and South Africa blocked an attempt to get the China-inspired pact — Investment Promotion for Development — included in the WTO even though it had a backing of more than 120 countries. Another non-trade issue of linking trade to gender has also been successfully opposed.

The declaration also noted that women’s economic empowerment and women’s participation in trade contributes to economic growth and sustainable development.