Ignore the Propaganda, India's 'Success' at Recent WTO Meet Is More Show Than Substance

Geneva: Amidst the cacophony of India’s superlative performance at the just-concluded World Trade Organisation’s 12th ministerial conference (MC12), truth seems to be a major casualty.

“PM Modi’s focus on welfare of the poor adopted on the global stage,” says Union commerce minister Piyush Goyal in a press statement.

“India took the lead and turned the tide of negotiations from failure, gloom and doom to optimism, enthusiasm and consensus-based outcome,” Goyal asserted. “Gone are the days, when India could be arm-twisted to accept outcomes that hurt the poor,” he claimed.

India also stated its aims coherently in the opening statement made by the minister at the start of the meeting.

Having covered 1+12 ministerial conferences (one being the Marrakesh meeting in 1994, which led to the establishment of the WTO in 1995, while the rest are all WTO ministerial meetings), Goyal’s statements seemed rather odd.

The recent history of ministerial conferences is there before our eyes – from the late Pranab Mukherjee in 1994 to to Nirmala Sitharaman in 2015.  In this period,  notable results were achieved only by four ministers. They are Murasoli Maran in 1999 and 2001, Arun Jaitley in 2003, Kamal Nath in 2005 and 2008, and Anand Sharma in 2013. These four ministers safeguarded India’s defensive and offensive interests in global trade.

At the WTO’s ministerial conference, decisions are made in the closed-door small group or ‘green room’ meetings of select countries – a permanent characteristic of the WTO’s opaque processes.

This time, India’s performance apparently surprised several developing countries. The reason? India allegedly made statements on the discussion on Food Security and the World Food Programme, wherein it pressed for government-to-government purchases to be allowed from PSH (public stockholding programmes for food security purposes like the public distribution system programme) at the small group meeting.

In the face of opposition from Brazil, Uruguay, Australia, the United States, and Thailand among others in the small group meeting, a senior Indian official allegedly agreed on the WFP decision without protest.

Also read: TRIPS Waiver: How India Abandoned its Own WTO Proposal

So, on the Prime Minister’s statement of seeking WTO’s approval for selling PDS stocks to other governments as well as in the market, India could not get consensus on pursuing its government-to-government purchases in the decision on the World Food Programme.

Take, for example, India’s fight for the permanent solution for public stockholding programmes for food security. This is an issue where more than 80 countries rallied under India’s leadership to ensure that there is a permanent solution for PSH programmes.  The US, the EU, Australia and several other South American countries fiercely pushed back against this issue. Yet, when push came to shove, the whole issue was decimated with no trace of the discussions. Indeed, for the first time in the history of WTO trade negotiations, there is no decision or declaration on agriculture.

So, the interests of India’s tens of millions of farmers are going to be eclipsed if the PSH programmes are systematically chipped away with legal disputes by Uncle Sam and its allies in the coming months and years.

Against this backdrop, an analysis of the decisions here below reveals what are the gains for India, and India’s failures.

Gains for India

In the interim deal on fisheries subsidies, India managed to secure the flexibility to provide “other” subsidies, which are neither for illegal, unreported and unregulated fishing, nor for over-fished stocks.

India’s failures

There is no mention of permanent solution to the issue of public stockholding in the declaration on food insecurity. Developed countries and some developing countries completely checkmated India on this issue. Unlike the outcomes in previous ministerial meetings which provided a specific mandate to intensify efforts for arriving at a permanent solution, India failed to even get a recognition of working towards a permanent solution.

This calls into question India’s commitment to this issue.

On the issue of prohibiting restrictions on exports to the World Food Programme, India failed to stick to its position of opposing this issue. We are now saddled with an outcome that will gradually create a window for prohibiting import restrictions in other areas. This could adversely impact India’s ability to address its domestic food needs, particularly during times of global food shortages. The long-term implications of this decision do not bode well for India.

An important ask for India was the flexibility to export food grains from public stocks. Commonly referred to as government-to-government exports, some hesitant steps were taken in this direction. However, after encountering resistance from the developed countries, in no time India dropped this demand. It completely lost the plot, when it failed to leverage this issue with exports to WFP. Had India held back its support on WFP-related export restrictions, the prospects of securing a decision on government-to-government exports might have brightened.

Perhaps India’s biggest failure was in respect of the TRIPS waiver. Despite being at the forefront in making the demand for a TRIPS waiver in October 2020, by December 2020 its role changed. It joined the Quad process and became a party to undermining the waiver decision. Its role is not only questionable, but also intriguing.

Perhaps the perception, which appears completely unfounded, that India needs strong IP protection, coloured India’s approach to TRIPS waiver. This perspective seems to have driven India down the wrong path. The eventual outcome on TRIPS waiver is not only an extremely diluted version of the initial proposal of India and South Africa, but also has many TRIPS plus obligations.

India has to take the blame for its dubious role on this issue.

The outcome document contains one stand-alone paragraph on WTO reform. However, this paragraph has to be read with another paragraph recognising the role of the Secretariat and international organisations on WTO issues. The stand-alone paragraph provides an almost open-ended mandate to change the institutional architecture of the WTO and align it more with the interests of the developed countries. The paragraph on the Secretariat and international organisations provides an opening for enhancing the role of the Secretariat, as well as according a formal role to industry lobbies, such as the International Chamber of Commerce, in WTO processes. Both these are key elements of EU’s vision on WTO reform. Clearly, India has no understanding of this implication of the paragraph.

On the issue of moratorium on customs duties, India came too late in the game in strongly opposing this issue. Indonesia, Pakistan, and Sri Lanka could have succeeded in their attempts, if India had strongly come to their side. India’s hesitation weakened their efforts.

Environment and sustainability make a forceful presence in the outcome document. This goes a step further in legitimising the multilateral and plurilateral initiatives on environment issues. This will enable the developed countries to negotiate rules, which will be extremely damaging to the developing countries.

In the rush to sign free trade agreements, India under the leadership of its commerce secretary B.V.R. Subrahmanyam, is apparently ready to concede ground on controversial issues like environment, said a European official to this writer.

“If India opposes environment at the WTO, then there won’t be much credibility,” the European official said, preferring not to be quoted.

The biggest winner from MC12 is the European Union. It succeeded in diluting the TRIPS waiver, secured an open-ended mandate on WTO reform with elements of its preference, and almost preserved the flexibility to subsidise distant water fishing.

India has suffered a massive damage to his reputation. Its role in undermining the TRIPS waiver and relative silence on the issue of moratorium on customs duties on electronic transmissions calls into question its reliability as a dependable coalition leader, that fights for its interests as well as those of many other developing countries.

Ravi Kanth Devarakonda is a senior journalist based in Geneva.