Home / Opinion / India eclipsed at WTO ministerial

Finally, the curtain has been brought down on the 10th ministerial meeting of the World Trade Organization (WTO) in Nairobi. Trade ministers from 162 countries seemed suitably exhausted, but most were also left disappointed, many for being left out of the key negotiations.

Barring five countries—the US, European Union (EU), Brazil, China and India, who negotiated among themselves the final outcome based on their respective national interests—the others were left guessing about the outcome of the emerging world trade order. Those excluded could be seen pacing around in the cafeteria as the discussions drew on agonizingly.

The closed-door negotiations among the five trade ministers, an African trade envoy opined, was akin to what the European colonial powers had accomplished during the partition of Africa in 1881-1914.

Unlike then, the Nairobi meeting was different, in which the United States and the European Union were ably assisted by Brazil, a developing country, as they set about forging a new global trade agenda, particularly favourable to them. They succeeded in bypassing crucial aspects of the Doha Development Agenda (DDA) launched in Doha, Qatar, in 2001. Ironically, the US and the EU had launched the round immediately after the 9/11 terrorist attacks in the US, as a way to unite the world.

In the run-up to the Nairobi meeting, a large majority of developing countries led by India, China, South Africa, Indonesia, Ecuador, and Venezuela prepared the ground to ensure that the Doha Round of negotiations are not closed by the two trans-Atlantic trade elephants. They also tabled detailed proposals for a permanent solution for public stockholding programmes for food security and a special safeguard mechanism (SSM) to protect millions of resource-poor and low-income farmers from the import surges from industrialized countries.

The proposal on a permanent solution for public stockholding programmes suggested easy options by expanding the agreement on agriculture to include market price support programmes that can be exempted from aggregate measurement of support calculations. The SSM proposal by India, along with the G-33 farm coalition led by Indonesia, set forth a transparent and effective instrument based on price and volume triggers to impose special safeguard duties.

In fact, on 19 October, Prime Minister Narendra Modi told leaders from Africa in New Delhi that “the Doha Development Agenda of 2001 is not closed without achieving these fundamental principles (at the Nairobi ministerial meeting)". He said that Africa and India should together ensure that there is a permanent solution to public stockholding for food security and a special safeguard mechanism in place to address unforeseen surges in imports of farm products.

In the run-up to the Nairobi meeting, the two proposals were actively opposed by the US, which led a sustained campaign to ensure that there was neither an outcome on continuing DDA negotiations nor a deal on SSM and public stockholdings for food security.

Even while they mounted opposition, the US, the EU, and Brazil along with several farm-exporting countries accelerated their efforts to secure a substantive outcome on export competition at the Nairobi meeting.

Against this backdrop, commerce minister Nirmala Sitharaman’s task was cut out when she landed in Nairobi. By convention, mercantile trade negotiations are based on the principle of give and take. Accordingly, each country agrees to undertake new commitments to liberalize existing rules or eliminate protective barriers in return for outcomes in its areas of interest.

Like others, India too was expected to settle for a trade-off. The trade-off involved securing a permanent solution to public stockholding programmes for food security and SSM, and reaffirmation to continue the DDA negotiations beyond Nairobi. In return, it would commit to a substantive agreement on export competition entailing a phase-out of export subsidies and reducing export credits.

Sitharaman did not mince her words in making out India’s case; neither did she hold back her disappointment at the way things turned out. “It is regrettable that longstanding issues of interest to a large number of developing countries are being put aside for the future and new issues of recent vintage are being taken up with unusual enthusiasm," she said.

But what is inexplicable is that the commerce minister omitted mentioning India’s demand for a permanent solution for public stockholding programmes for food security at a meeting convened by the facilitator, Joshua Setipa, Lesotho’s trade minister. At the same time, she skipped the meeting convened by the facilitator at her request to discuss the SSM. The minister may have well missed out on an opportunity to make it clear that India would not sign on to any draft that ignored the agenda it had proposed.

In his draft issued on 17 December, the facilitator offered vague language on both the SSM and public stockholding programmes for food security without proposing any time-frame for their resolution. Sitharaman duly protested and submitted two proposals together with China and Turkey to ensure that there are clear outcomes at the 11th ministerial meeting in 2017. These proposals also mentioned the DDA negotiations in passing.

During her meeting with the US trade representative, ambassador Michael Froman, in Nairobi, she conveyed categorically that India will need reaffirmation to continue the DDA negotiations until all outstanding issues are resolved. Of course, Froman declined.

According to a person present during the negotiations, among the five countries on the final day, India was unable to forcefully defend positions it had articulated over the past two years. India apparently yielded ground during the marathon negotiations when there was an exchange of proposals with the US, the EU and Brazil—all three refused to accommodate any language on the SSM because of the absence of market access negotiations. Eventually, they agreed to remove the DDA and make a reference to the 2005 Hong Kong Ministerial Declaration. They were unwilling to accommodate India’s demand for a definite time-frame on the SSM and public stockholding programmes for food security.

Then China joined India in fighting another battle on the post-Nairobi work programme for reaffirming to continue the DDA negotiations. The US and the EU vehemently opposed it and only agreed to insert the term “Doha" instead of DDA negotiations. In the process, the US and the EU managed to secure language on new approaches and new issues with few caveats.

In the final analysis it is clear that India failed in its objectives to secure credible outcomes on its demands for SSM, permanent solution for public stockholding programmes for food security and the reaffirmation to continue the DDA negotiations. Perhaps, this is the first time that India left a WTO ministerial meeting so diminished.

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