Abu Dhabi: India exposed the double-standards of the e-commerce moratorium while making a strong case for its termination at the just-concluded World Trade Organisation’s ministerial conference in Abu Dhabi last week.
Union commerce minister Piyush Goyal said the e-commerce moratorium, which refrains from imposing customs duties, favoured big tech companies and undermined the prospects of competitors in developing countries.
Yet, on the final day of the conference, he took a U-turn. He allowed it to continue for another two years for free, without securing a tangible return.
Goyal said he agreed to the continuation of the e-commerce moratorium because the UAE trade minister, Dr Thani bin Ahmed Al Zeoudi, who is also the chair of the ministerial conference, requested him personally to do so. “He is a friend, and out of friendship, I agreed,” Goyal told reporters.
However, Indonesia, one of India’s staunchest allies in WTO’s farm negotiations, was not even informed by India about its decision to drop the opposition to e-commerce moratorium, a senior Indonesian official told this reporter.
Indonesia, however, went on to block the continuation of the moratorium in the final hours of the meeting. Finally, coming under intense pressure, Indonesia relented. Had India remained firm, the moratorium would not have gone through.
“It’s a relief to see the moratorium survive by the skin of its teeth,” said Tiffany Smith, vice-president of the National Foreign Trade Council, a Washington-based business lobby group.
“Its collapse would be a significant blow to the rules-based trading system.”
“But it’s incredibly frustrating to see the WTO unable to move forward from this Groundhog Day rut that has been dug on the issue.”
“The endless brinkmanship over the moratorium crowds out the ability to make progress on a broader agenda and undermines the viability of the WTO as a useful forum for trade ministers,” she told Financial Times.
India’s stand on moratorium, which had been in place since 1998 with tens of billions of dollars in foregone customs revenues for developing countries, is somewhat perplexing. Is it a reciprocal gesture for the temple that was built in Abu Dhabi recently? Nobody would know.
Curiously, it came days after a new temple was inaugurated by Prime Minister Narendra Modi. Even the commerce minister who came late to the meeting in Abu Dhabi made his first stop at the temple.
After all, in global trade negotiations conducted by the WTO, everything comes with what is called in the negotiating parlance a “payment”. It implies that if country X is asking country Y to agree to accept its demand, that would involve a binding commitment, then the latter has to make a commensurate payment, in return.
A meeting with Union commerce minister
Piyush Goyal
and the Indian delegation, focused on India’s priorities for MC13. Photo: X@NOIweala
Public stockholding
With representatives from powerful American lobbies present at the meeting, India could have forced the US administration and other industrialised countries to agree to the permanent solution for public stockholding programmes for food security. This is a mandated issue hanging in balance since the WTO’s 10th ministerial conference in 2015.
The fierce opposition from the US which reckons that the initial Bali peace clause agreed at the WTO’s ninth ministerial conference in Indonesia is a “mistake” and it should not have happened.
Though India paid for the peace clause by agreeing to a brand new trade facilitation agreement, the US has been consistently blocking the permanent solution for public stockholding programmes.
The discussions on public stockholding at the Abu Dhabi meeting were pretty tense and replete with some heated exchanges. For example, at the meeting of eight countries, India is understood to have said that without a permanent solution for public stockholding, there would not be any outcome in agriculture for the next 100 years.
India also subtly reminded the WTO’s Director General, Ngozi Okonjo-Iweala, who seemingly breached her role as an international civil servant by promoting the controversial plurilateral agreement on investment facilitation, a core priority for China, that she could have helped India in resolving the permanent solution for public stockholding programmes.
Okonjo-Iweala appears to have said it is not for her to negotiate on public stockholding, suggesting that it is for India to negotiate with other members to resolve the issue.
The US Trade Representative Ambassador, Katherine Tai, who left Abu Dhabi early morning on Friday, seems to have opposed the permanent solution, while suggesting continuing work on a permanent solution along with other issues, said delegates who asked not to be quoted.
At the tough stance adopted by India on the public stockholding issue, a US official seems to have suggested that the MC-13 is an “India party”, implying that India is dominating the proceedings on every issue, according to delegates familiar with the discussions.
However, several developing countries pointed fingers at the US for blocking the public stockholding matter, resulting in an overall negative impact on other issues, said a developing country delegate, who asked not to be quoted.
Ultimately, India blocked the Investment Facilitation for Development agreement.
Goyal made the right noises about the restoration of the appellate body, the highest limb for adjudicating trade disputes. The appellate body has remained dysfunctional since 2019 after Washington blocked the selection of members to the appellate body.
Consequently, the WTO’s enforcement mechanism has become ineffective, even though the panel process, serving as the lower court beneath the appellate body, remains operational.
India should have put in strong language in the Abu Dhabi mandate for reforming the broken dispute settlement system. In light of this, there seems to be no justification in concluding new agreements at the WTO.
The 13th WTO ministerial conference in Abu Dhabi. Photo: X@ThaniAlZeyoudi
Fisheries subsidies
Regarding the so-called second wave of fisheries subsidies negotiations aimed at addressing subsidies that contribute to overcapacity and overfishing, the final text presented on the negotiating table appears to have undermined commitments to curtail significant subsidies responsible for the depletion of global fish stocks.
The agreement appeared devoid of any significance with tailored exemptions allowing the European Union, the US, China, Japan, Korea, and Taipei to continue with their subsidies contributing to overcapacity and overfishing.
Regrettably, provisions for special and differential treatment aimed at aiding the development of marine sectors in developing countries were sparse.
India’s decision to block the fisheries subsidies agreement seems justified in this context.
Overall, India has done some things right at the Abu Dhabi meeting. However, it blundered on one issue: giving up on the termination of the e-commerce moratorium. It is a jewel in the crown for the US and other industrialised countries.
Tense exchanges
Before the meeting came to a close, it witnessed some intense moments marked by tense exchanges between Okonjo-Iweala and Goyal. He seemed piqued over alleged attempts to cast India in a bad light over its refusal to agree with the fisheries subsidies agreement.
Goyal apparently learned from Fiji’s Deputy Prime Minister and Minister for Trade, Manoa Kamikamica, that he is issuing a statement on fisheries subsidies after India blocked the fisheries subsidies agreement.
It appears that the Fijian minister is understood to have told India that Okonjo-Iweala had asked him to issue the statement on the fisheries subsidies, after which Goyal rushed to the podium to tell her about what he heard on fisheries subsidies from his Fijian counterpart.
Seemingly enraged at the development, the Indian minister appears to have threatened the Director-General that India would withdraw its approval extended to the e-commerce moratorium. This threat stemmed from allegations that she advised the Fijian deputy prime minister to issue a statement, despite an agreement that there will be no statement on the fisheries subsidies.
That created a panic and a visibly shaken Director-General tried to convince Goyal that she did not tell the Fijian minister.
Okonjo-Iweala appears to have challenged the Fijian minister whether she told him to issue the statement on the fisheries subsidies. The Director-General appears to have said, “Piyush you know me, why would I do that,” according to ministers who heard the conversation.
When asked whether the Director-General put up Fiji to issue a statement on fisheries subsidies to single out India at the meeting on fisheries subsidies, the WTO spokesperson referred this writer to check with the Fijian deputy prime minister.
“As the spokesperson for the WTO, I highly recommend reaching out to the Fijian delegation for exact information concerning any statements made or not made. It is our customary practice to refrain from addressing or commenting on unfounded rumours or hearsay,” said Ismail Dieng, WTO’s spokesperson.
Nevertheless, the tense exchange between the Director-General and the Indian minister seems to have vitiated the overall climate during the MC-13, said ministers familiar with the differences between an international civil servant and a trade minister of a sovereign country.
