WTO talks: beset by developing, developed divide

Thu Jul 14, 2022

Over 160 countries are taking part in the 12th ministerial meeting of the World Trade Organization at Geneva. And divergences between developed and developing countries may make it challenging for them to agree on issues plaguing the global economy.

What key issues are being negotiated?

The WTO’s 164 member-countries are engaged in talks on five broad themes—food security and agriculture; fisheries subsidies; intellectual property rights waiver on covid-19 vaccines and pandemic response; WTO reforms; and extension of a moratorium on customs duty on e-transmission. While India and other developing countries are pressing for a fair, equitable and balanced outcome, the draft agreements on the table seem to favour developed countries. India is fighting for the right to stockpile and export foodgrains, the right to subsidise the fisheries sector, and taxing digital imports.

Why is stockholding important?

A “permanent solution” on public stockholding of foodgrains would allow countries such as India to give out higher farm support. India and other developing nations run public stockholding programmes to benefit the poor. However, developed countries consider them as trade distortions and WTO rules, currently, limit the support that countries can directly give to its farmers at 10% of the value of production calculated on a base of 1986-88. Although a ‘peace clause’ negotiated by India in 2013 gives developing nations protection against legal action if limits are breached, it is subject to onerous conditions.

Has India breached the subsidy limits yet?

While India has not exceeded the 10% ceiling for wheat, it has had to invoke the ‘peace clause’ for rice for three years now. Currently, the peace clause only includes government programmes started before 2013. India wants government programmes started after 2013 to be included in the calculation as it wants to expand the scope of farm support.

What is the fisheries subsidies proposal?

This proposal aims to eliminate subsidies that contribute to overfishing, curb support for illegal, unreported and unregulated fishing, and promote sustainable fishing. As per the latest draft text, developing countries will need to do away with subsidies that contribute to overfishing within seven years of the agreement coming into effect, or up to 2030. India wants this period of exemption to be extended 25 years, arguing its fisheries industry is still at a nascent stage.

What is India’s stand on e-transmission?

This issue dates back to 1998, when WTO members agreed not to impose any customs duty on electronic transmission. But the moratorium has been periodically extended at ministerial conferences and many countries want to make the moratorium permanent. India is opposed to an extension citing that developing countries have been losing revenue. Officials argued that since digital trade is dominated by big tech and developed countries, the moratorium squarely favours developed nations.

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