Expectations from WTO’s 12th ministerial meet

Thus, trade has become a driver for many economies including India, compensating for the continued sluggishness in domestic demand.

Published: 07th November 2021 07:10 AM  |   Last Updated: 07th November 2021 07:10 AM   |  A+A-

New Director-General of the World Trade Organisation Ngozi Okonjo-Iweala

New Director-General of the World Trade Organisation Ngozi Okonjo-Iweala (Photo | AP)

In less than four weeks, the 12th Ministerial Conference (MC12) of the World Trade Organisation (WTO) will be convened in Geneva, almost 18 months after it was originally scheduled in Kazakhstan. MC12 is being organised as global trade is witnessing a sharp rebound, after a precipitous COVID-induced fall.

According to the latest WTO estimates, global trade volumes are expected to increase by almost 11 per cent in 2021 and are expected to grow at nearly 5 per cent in 2022, well above its immediate pre-COVID growth trajectory. Thus, trade has become a driver for many economies including India, compensating for the continued sluggishness in domestic demand.

Not surprisingly, therefore, expectations from the MC12 are running high as the decisions taken by the trade ministers of the WTO member states to rejig the trade rules and to agree on a work programme for the organisation will be crucial not only for the maintenance of the growth momentum of trade, but also to ensure that the economically weaker countries can partake in the benefits from trade. The question is whether MC12 can realise the crucial latter objective.

However, as MC12 is being convened, the WTO is battling a severe legitimacy crisis on several counts that are striking at its foundations. The negotiating arm of the WTO is in jeopardy, having delivered just the Agreement on Trade Facilitation since the formation of the organisation. Negotiations to rebalance the major WTO agreements, especially to factor-in the needs and aspirations of developing countries, which were being conducted under the rubric of the Doha Development Agenda (DDA) since 2002, came to a virtual standstill after the economic recession in 2008. Worse still, in the Buenos Aires Ministerial Conference held in 2017, there was no consensus among members on continuing with the DDA, and recent discussions show that the development agenda is off WTO’s agenda. WTO is keener to serve the interests of the dominant commercial entities and not the interests of the majority of its members, the developing countries.

Equally damaging for WTO’s legitimacy was the then US President Donald Trump’s move to scuttle WTO’s dispute settlement mechanism, considered vital for enforcing global trade rules. President Trump had refused to join the consensus for appointing new members of the Appellate Body, without whom disputes between members cannot be resolved. Unfortunately, the Biden administration has shown no signs to reverse the previous administration’s decision, leaving the future of the Appellate Body in a limbo. Clearly, the role of the WTO as an enforcer of global trade rules and to thus facilitate conduct global trade in a seamless manner, are seriously compromised in the absence of a functioning Appellate Body.

The legitimacy question facing the WTO has become even louder in the wake of the COVID pandemic when the rules of the organisation on Intellectual Property Rights (IPRs) became formidable barriers for equitable access to vaccines. Major pharmaceutical companies used the monopoly power granted by their IPRs to deny technology and know-how to developing countries, thus preventing production of vaccines in these countries. Large involvement of developing countries in vaccine production could not only have increased supplies, but more importantly, vaccines would have become more affordable. In October 2020, India and South Africa tabled a proposal in the WTO arguing that enforcement of several forms of IPRs must be waived during the COVID-pandemic, to facilitate access to technologies for “health products and technologies including diagnostics, therapeutics, vaccines, medical devices, personal protective equipment, their materials or components.”

This proposal was co-sponsored by 61 WTO members and was supported by nearly two-thirds of the membership. For several months, developed countries opposed this proposal, but after the United States broke ranks under the Biden Administration lending limited support, there were expectations that WTO members would take a collective decision to see the back of the pandemic by making COVID-related vaccines and medicines more affordable and accessible, at least by MC12. Unfortunately, this possibility seems unlikely as this critically important issue is conspicuous by its absence in the recent musings of WTO Director General Ngozi Okonjo-Iweala on the state-of-play of negotiations in The Economist.

While India will be disappointed at not seeing any forward movement on its proposal to waive IPRs, can it expect any other favourable outcome? Among the issues on which there could be an agreement in MC12 is disciplining subsidies on fisheries. However, the outcome may not be what India has desired for its small fishermen. Further, India is looking for a resolution of the issue of public stockholding for food security purposes, on which the implementation of the country’s public distribution system depends. The current WTO rules raise question marks over the ability of the government to provide subsidised foodstuffs through the public distribution system, which is clearly unacceptable. The Government of India has made it clear that the WTO must allow the policy space for it to continue with the public distribution system in the existing form. Surely, the trade body cannot do otherwise.

Biswajit Dhar, Professor, Centre for Economic Studies and Planning, School of Social Sciences, JNU


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