Explained: WTO talks collapse as US plays spoilsport to India's demands

Overarching indecision at largest multilateral trade meet may plague trade policymaking over next 2 years

The 11th Ministerial Conference of the World Trade Organisation - the largest global meet for multilateral trade talks held biennially - has come to an end without a significant outcome as nations dug into their divergent positions and the US played spoilsport for India's demands on agricultural issues. 

With wide divergences in negotiating positions established before the onset of the summit, trade experts had confidently predicted that few outcomes, if any would come out. This had been hinted at by the government as well with Commerce and Industry Minister Suresh Prabhu telling Business Standard last month that India needs to look beyond the WTO ministerial and clearly lay out how to deal with the multilateral platform in future.

In Buenos Aires, while the developing world led by India and China had thrown their weight behind a demand for an agreed solution on the issue of public stockholding of grain for food security, besides domestic subsidies to the agriculture sector, developed nations such as the United States and the European Union remained staunchly against it, Abhijit Das, head of the Centre for WTO studies said. Das had sounded the alarm before the meet began by saying that no major country apart from India was actively talking about the Doha development agenda.

Agri showdown

The Commerce Ministry on Thursday reiterated that "Unfortunately, the strong position of one member against agricultural reform based on current WTO mandates and rules, led to a deadlock without any outcome on agriculture or even a work programme for the next two years." With the member in question being the United States, which has stood against certain tenets of the multilateral process itself, the talks didn't take time to wrap up, a senior government official part of the official delegation said.   

Instead, the country will have to fast-track its food subsidy notification obligations at the multilateral body to use an interim guarantee allowed under the Bali peace clause of 2013 to ensure it does not violate WTO rules, he added.

As a result, India's food security programmes and its current public distribution system will not be impacted by the indecision. However, to use the peace clause, India has to give information to WTO about the size of its food subsidy bill till last year. Figures show the country has only notified its food subsidy bill till 2013-14.

Other battlegrounds

On the other hand, the richer nations strived to bring into the discussions a stream of issues from rules for small and medium enterprises to gender rights in global trade, which India has categorized as non-trade issues. Many of these proposals run counter to India's interests while also reducing the policy space for governments if norms are decided beforehand,  J S Deepak, India’s ambassador at the WTO had said.

Deepak pointed out that discussing a set of global rules for facilitating trade by SMEs would harm India's interests since there was no decision to define an SME currently at the WTO. The proposal by a group of rich nations revolves around providing trade benefits to such enterprises based on size while India and other developing nations have always argued that benefits should be based on special and differential treatment, currently allowed to such nations in global trade.

This debate reached a head in the field of e-commerce whereby developed nations wanted to start talks on a proposed set of rules for global e-commerce, fiercely opposed by India.

The Way ahead

In the absence of a formal ministerial declaration, the nations would have to go forward based on the few work programmes decided by the WTO. Of these, the only consequential one is on the prevention of providing fisheries subsidies contributing to overfishing - the one area which was expected to see significant progress. Member nations simply committed to securing a deal on fisheries subsidies which delivers on Sustainable Development Goal 14.6 by the end of 2019. They also committed to improving the reporting of existing fisheries subsidy programmes.

The body has also suggested that discussions continue on e-commerce duties, TRIPS non-violation protocol and Work Programme on Small Economies.

Details of the Agri debate :

Following India’s agreement with the US on the issue in 2013, the Bali ministerial conference came up with the ‘peace clause’ that permitted implementation of India’s food security programme till a solution was found. This allows India to procure and stock foodgrain for distribution to the poor without being penalised by WTO members even if it breaches the 10 per cent subsidy cap prescribed by the multilateral trade body.

In the search for a permanent solution, India has proposed either amending the formula to calculate the food subsidy cap of 10 per cent (based on the reference prices of 1986-88) or allowing such schemes outside the purview of subsidy caps. India also plans to formalise the Special Safeguards Mechanism, a long-standing demand of developing nations; these allow countries to temporarily raise tariffs to deal with surging import and subsequent price falls.