KEY HIGHLIGHTS:
The twelfth World Trade Organization Ministerial Conference is scheduled to commence on June 12, 2022, in Geneva.
The Indian delegation, led by Shri Piyush Goyal, will ensure that the country and the developing countries get a fair deal.
Agriculture, fisheries, WTO changes, and pandemic response will be significant themes of discussion.
India will advocate for conversations and outcomes that are fair, just, and transparent.
WTO Quick Overview
The World Trade Agency (WTO) is the sole global international organization that deals with international trade rules. At its center are the WTO accords, which have been drafted, signed, and ratified by the majority of the world’s trading states. The purpose is to assist producers of goods and services, exporters, and importers with their operations.
The World Trade Organization operates by its member countries. All key decisions are taken by the entire membership, or by ministers (who generally meet at least once every two years) or their ambassadors or delegates (who meet regularly in Geneva).
Significance
In a nutshell, the World Trade Agency (WTO) is the sole international organization charged with implementing global trade regulations.
It ensures that trade runs as smoothly, consistently, and freely as possible.
The WTO and India
In 1947, India joined the General Agreement on Tariffs and Trade (GATT) and its successor, the World Trade Organization (WTO).
As a result of India’s WTO membership, other countries are now trading with it, boosting production, employment, living standards, and the opportunity to maximize the use of global resources.
Services make for 40% of India’s total commodities and services exports. More than 55 percent of India’s GDP is generated by the services sector.
The sector (domestic and exports) employs over 142 million people, contributing for 28 percent of the country’s employment.
The majority of India’s exports are in IT and IT-enabled services, travel and transportation, and financial services.
In 2017–18, the trade surplus in services trade is $70 billion. The World Trade Organization puts India fifth in commercial service exports and sixth in commercial service imports, including the European Union.
Under the Trade-related Aspects of Intellectual Property Rights (TRIPS) agreement, India strongly supports giving geographical indications for products such as Basmati rice, Darjeeling tea, and Alphonso mangoes the same degree of protection as wines and spirits.
India opposes any inclusion of non-trade issues aimed at enforcing long-term protectionist measures (based on non-trade issues, developed countries such as the United States and the European Union are attempting to ban imports of certain goods such as textiles, and processed foods, and so on), particularly against developing countries.
Benefits of WTO membership:
The following are some of the benefits of being a member of the WTO:
The World Trade Organization (WTO) strives for free trade by requiring its members to adhere to international obligations in terms of access to goods and services markets, the use of trade-affecting economic policy instruments, and state support for agriculture.
Membership in the WTO brings the following benefits:
— Most Favored Nation Treatment, which means that all WTO Members’ enterprises have equal access to the markets of all WTO Members.
— National treatment, prevents domestic producers from having a competitive edge over importers.
— Lowering trade barriers, particularly tariffs and quantitative limits, allowing Members to trade more freely.
— International trade predictability and transparency
— WTO members have agreed to limit their tariffs and cannot impose other import restrictions, such as bans, or quotas unless there is a compelling justification.
— Increased competitiveness by eliminating unfair trade practices, such as export subsidies and dumping, between trading partners.
— Access to the WTO Dispute Settlement Body to protect trade interests, since all Members will have international commitments to Belarus for non-application of trade barriers.
Membership in the WTO will give further benefits, including:
— Participation in the formulation of new international trade rules and principles:
Participation in WTO activities will allow promoting its national interests while also allowing it to respond to changing global trade norms in a timely manner. The World Trade Organization is working on a number of important issues, including e-commerce, streamlining investment procedures, and involving small and medium-sized businesses in international trade, among others.
— Diversification of exports:
WTO legislation is an effective (and now the only) legal safeguard against all WTO members engaging in discriminatory trade practices. Belarus’ exports of products and services to the area of 164 WTO members have untapped growth potential of more than $ 1.3 billion.
— An investment regime that is transparent, predictable, and appealing:
Taking commitments as part of the WTO membership process defines the limits of legal trade barriers, ensuring legislative stability and lowering investment risks. Belarus may have received a total of $ 12 billion in foreign direct investments in the first five years after joining the WTO.
— Sustained improvement in sovereign credit ratings:
For our country’s creditors and donors, WTO membership is an indication that our national economic strategy is in line with international standards. Raising credit rating has a direct impact on the cost of financial resources. Within three years of the entrance, the credit rating of 80 percent of countries that have joined the WTO since 2004 climbed under the Organization for Economic Development and Cooperation (OECD) categorization.
— In trade disputes, boosting positions:
The ability to appeal to the WTO Dispute Settlement Body (DSB) provides a compelling motive for foreign partners to negotiate trade bargains. Since the DSB’s inception, more than half of the 610 cases that have been initiated have been resolved during the initial consultation stage.
Ministerial Meetings
The WTO’s highest decision-making body is the Ministerial Conference, which meets every two years. It brings together all WTO members, who are all countries or customs unions. The Ministerial Conference has the authority to make decisions under any of the multilateral trade agreements.
Twelfth WTO Ministerial Conference
After a five-year hiatus, the twelfth World Trade Organization Ministerial Conference is planned to commence on June 12, 2022, in Geneva, Switzerland. This year’s conference will focus on the WTO’s reaction to the pandemic, negotiations on fisheries subsidies, agriculture concerns such as public stockholding for food security, WTO reforms, and a moratorium on customs duties on electronic transmission.
Ministers from around the world are in attendance to assess the operation of the global trading system, make general statements, and take action on the WTO’s future work. Kazakhstan is co-hosting the Conference, which will be led by Mr. Timur Suleimenov, Kazakhstan’s Deputy Chief of Staff. Kazakhstan was supposed to host MC12 in June 2020, but the conference was pushed back owing to the COVID-19 outbreak. The meeting is set to end on June 16.
How the conference is organized?
The Conference’s Opening Session began at 15.00 on Sunday, June 12. Pre-recorded and written remarks provided by ministers and heads of the delegation were released on the WTO website at the conclusion of this session. At 16.00, ministers had the chance to offer prepared speeches on the problems confronting the multilateral trading system.
Thematic seminars on specific areas of WTO activities are being held from Monday to Wednesday. These are followed by a meeting of delegation heads at the end of each day.
The Closing Session is scheduled for Thursday, June 16th.
Trade Ministers meet in Geneva for the Twelfth Ministerial Conference of the World Trade Organization.
In May, a preliminary agreement was reached amongst significant parties — India, South Africa, the United States, and the European Union – confined to vaccinations, and this is virtually what has been implemented.
India has been a member of the WTO since January 1, 1995, and the GATT since July 8, 1948. India believes in a global trading system that is transparent and inclusive, and we are committed to working to enhance the WTO.
The essential principles of the WTO, like non-discrimination, consensus-based decision making, and special and unequal treatment for developing nations, must be preserved.
After more than five days of tough discussions, the World Trade Organization’s 164 members agreed on a series of trade accords early on Friday, including obligations on fish and pledges on health and food security.
India scores big at the WTO, as the ministerial session results in some historic decisions.
GENEVA: According to sources, India adjusted the narrative and controlled it well from beginning to end at the World Trade Organization ministerial session, which saw several landmark decisions, and the country’s image has risen enormously in the global community.
After seven years, there was a ministerial conference outcome. Ministerial decisions were made on all issues except agriculture, as was expected. A total of eight or nine, with several important judgments.
After the meeting, Union Commerce Minister Piyush Goyal stated that the Indian delegation, led by Prime Minister Narendra Modi, was completely effective in presenting to the globe the top problems for India and the developing world.
Goyal stated that the Indian delegation capitalized on India’s good connection with the rest of the globe, which Prime Minister Modi has fostered in recent years.
Goyal said today at the WTO was a happy day for 135 crore Indians since India took the lead and was at the center of the discussion.
“It shifted the negotiation tide from complete failure, doom, and gloom to optimism, enthusiasm, and consensus-based decision-making. India’s efforts to bring members together to discuss concerns regardless of the present geopolitical order have assured that the world order remains intact “he remarked.
Admitting that India and developing countries accepted certain compromising decisions when the WTO was established 30 years ago and during the Uruguay Round of negotiations, Goyal stated that India now bats on the front foot rather than being fearful on a variety of issues, including the environment, startups, SMEs, and gender equality.
This is a result of New India’s confidence. He believes India is capable of achieving global agreement and achieving a win-win conclusion.
“As we return to India today, there is no worry about which we should be least concerned,” Shri Goyal added. “Even if it is agriculture, such as MSP, emphasizing the significance of the PM Garib Kalyan Scheme, Public Stockholding Program in fulfilling the National Food Safety Program or the e-commerce moratorium, response to COVID, TRIPS Waiver, or fisheries.”
“Similarly, there have been no fishing limitations that our fishermen were concerned about, which would constrain India’s artisanal and traditional fishermen in the future. India has been completely successful; no restrictions or terms have been imposed on India or the government; rather, we have been successful in introducing checks on illegal fishing, under-reporting, or fishing outside of the rules, i.e. IUU fishing.”
Goyal stated that India will continue to support the World Food Program (WFP). He stated that the government has imposed no export limits on WFP purchases for food security in other countries, citing India’s recent wheat supplies to Afghanistan. Domestic food security, on the other hand, takes precedence.
Goyal stated that the Trade-Related Aspects of Intellectual Property Rights (TRIPS) ruling will improve vaccine fairness, accessibility, and affordability in the worldwide fight against Covid-19. It would facilitate the production of patented vaccines, and India will be able to produce for both domestic and international markets.
On the WTO Reforms agenda, Goyal stated that the essential framework and core concepts of the WTO, such as Consensus, S&DT norms, and SDG goals, will be kept while being modernized.
“I think it will be fantastic in the future for the World Trade Organization, as well as for emerging and underprivileged countries, and will enhance global trade through transparent means,” he said.
According to Goyal, India’s slogan of ‘Vasudhaiva Kutumbakam’ is repeated in the WTO.
He stated that India not only raised its own issues, but also those of other developing countries, Least Developed Countries (LDCs), the poor, and the vulnerable, and battled heroically for their cause.
According to Commerce and Industry Minister Piyush Goyal, this may be the first ministerial where India sets the agenda. “We were on the offensive. We were informing other countries about what needed to be done.”
The WTO conclusion not only exemplifies the value of a multilateral trade system but is also considered an image makeover campaign by India to be perceived as a deal maker rather than a deal-breaker.
Here are the details of those agreements
According to insiders, what was accomplished at the WTO was magnificent.
According to the insiders, India’s reputation has shifted from deal-breaker to deal creator, which was impossible a year ago. The 12th World Trade Organization Ministerial Conference closed on Friday in Geneva.
PANDEMIC RESPONSE
For more than a year, India, South Africa, and other developing countries have sought a waiver of intellectual property rights for COVID-19 vaccines, treatments, and diagnostics, but have been met with opposition from numerous rich countries that are significant pharmaceutical producers.
In May, a preliminary agreement was reached amongst significant parties — India, South Africa, the United States, and the European Union – confined to vaccinations, and this is virtually what has been implemented.
Developing countries will be permitted to use a patent for manufacturing and supply without the approval of the patent holder for a period of five years, with the possibility of an extension. Production does not have to be primarily for the home market, which means that greater exports are permitted to ensure equitable access.
WTO members must consider extending the waiver to pharmaceuticals and diagnostics within six months.
China has willingly withdrawn from the waiver, which the US had insisted on.
Campaign organizations pushed members to reject the language, claiming it was too restrictive and not a true intellectual property waiver at all.
The WTO also agreed on a declaration on its reaction to COVID-19 and readiness for future pandemics, emphasizing the needs of LDCs.
Members also agreed that any emergency trade measures should be proportional and temporary, and should not disrupt supply networks. Members should also use caution when placing export restrictions on vital medical supplies.
FISHING
Fisheries are a global public commons, a shared endowment to humanity. As a result, the distribution of such resources should be fair and equitable. Any inconsistency in the agreement would bind us to existing fishing arrangements, which may not be sufficient for everyone’s future needs.
Big subsidizers must take greater responsibility for reducing their subsidies and fishing capacities in order to ensure long-term sustainability. The fisheries pact, according to India, must be viewed from the perspective of existing international agreements as well as the laws of the sea.
WTO members agreed to restrict subsidies that lead to overfishing, which environmentalists say is critical to helping fish stocks recover.
The talks have been ongoing for 20 years, and the agreement marks only the WTO’s second multilateral agreement on new global trade rules in its 27-year history. The resolution of the fisheries dispute was viewed as a litmus test for the WTO’s own credibility.
According to the agreement, no WTO member shall offer any subsidy to vessels or operators engaging in illicit, unreported, and unregulated fishing, or fishing off an overfished stock. For the next two years, developing countries will be exempt.
Members will conduct their own investigations into activity off their shores, and all members must notify the WTO of their fishing subsidy schemes.
The 12th Ministerial meeting secured an agreement on illegal fishing that did not jeopardize the interests of India’s poor and marginal fishermen.
India had previously been one of the most vocal opponents.
What India desired:
Subsidy cuts are waived for developing countries fishing within EEZs.
Subsidies for countries fishing in areas outside their EEZs are prohibited for 25 years.
What India received:
There are no restrictions on subsidies for fishing within EEZs.
There will be no subsidies for fishing outside of EEZs.
Check on developed countries and China’s illicit, unreported, and unregulated (IUU) fishing.
However, discussions will continue in order to get a more comprehensive agreement to further restrict fisheries subsidies, ideally for the next ministerial meeting, which is expected to take place in 2023.
FOOD SECURITY
In the agriculture sector, the Director-General of the World Trade Organization (DG-WTO) presented three draught texts on agriculture, trade, and food security, as well as an exemption for the World Food Program from export limits, for discussions in May 2022. The protection of India’s food grain purchase program at Minimum Support Prices is a key subject under discussion at the WTO (MSP).
The World Trade Organization attempted to respond to a food supply and price increase issue aggravated by export disruptions from key wheat producers Ukraine and Russia.
In a declaration, WTO members resolved to take specific actions to improve trade in food and agriculture, particularly grains, fertilizers, and other agricultural inputs and emphasized the significance of lowering export restrictions.
What India desired:
A long-term answer to public stockholding for food security.
There are no exemptions from export restrictions for WFP food purchases.
Permission to export food grains from public inventories on a government-to-government basis.
What India Got:
No export limits on World Food Program purchases.
Concerns about internal food security will take primacy.
The issue of public stockholding has been postponed until the next ministerial meeting.
E-COMMERCE MORATORIUM
Many WTO countries are asking for a short extension of the moratorium till MC13 during the MC12 meeting. India and South Africa have submitted several joint submissions highlighting the moratorium’s negative impact on developing countries and arguing that the moratorium should be reconsidered so that developing countries can maintain policy space for digital advancement, regulate imports, and generate revenue through customs duties.
WTO members have extended a moratorium on imposing customs taxes on electronic communications worth hundreds of billions of dollars per year, ranging from streaming services to financial transactions and corporate data flows.
The ban has been in effect since 1998. South Africa and India were initially opposed to an extension, arguing that they should not lose customs money.
The extension is valid until the next ministerial meeting, which is expected to be convened by the end of 2023, but will expire on March 31, 2024.
What India desired was that the customs tariff embargo on electronic transmissions is lifted.
What India Got: An 18-month extension of the ban on e-commerce.
Examine the extent, definition, and impact of the moratorium.
Examine the extent, definition, and impact of the moratorium.
WTO REFORM
All WTO members agree that the organization’s rulebook needs to be updated, although they disagree on what revisions are needed.
Most pressingly, the WTO’s dispute appeals court has been paralyzed for nearly two years because then-US President Donald Trump rejected new adjudicator appointments, limiting the WTO’s ability to adjudicate trade disputes.
Members agreed to work on WTO reforms to strengthen the organization’s activities. This work should be transparent and satisfy the needs of all members, particularly developing countries that are given preferential treatment.
The WTO agreed to hold discussions in order to have a fully functional dispute settlement system by 2024.
The proclamation emphasized the growing importance of services trade and the necessity for poorer countries to participate more.
Members also acknowledged global environmental issues such as climate change and related natural disasters, biodiversity loss, and pollution. Some scientists believe that environmental issues have the potential to offer the body fresh vigor and purpose.
The Future of WTO Reform
Conversations about the process of “WTO reform,” a term that has grown in use over the years as various groups of WTO members have outlined topics that they would like to see added to the negotiating agenda, such as rules on industrial subsidies, and aspects of the Organization’s current functioning that they would like to see changed will be another key item to watch at MC12.
The content and nature of the MC12 ministerial declaration will also be considered in the coming days, as will whether a ministerial declaration will be agreed alongside any decisions adopted at the conference – or if the ministerial conference chair will instead need to release a statement or summary under his own responsibility, as is usually the case when consensus on a declaration is not possible.
“It has been nearly a decade since ministers agreed to a ministerial declaration,” MC12 Chair Suleimenov remarked on Sunday, emphasizing the importance of having such political guidance for the WTO’s future work by agreement.
Finally, the trade community and the larger world of international policymakers and influencers will be watching MC12 to see if the conclusions and dialogues that take place this week in Geneva pave the way for a promising new chapter in the WTO’s history, and for sustainable development in general.
