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Nairobi meeting faces questions on WTO’s ability to deliver deals

While developing countries want a deal for a permanent solution on public stockholding for food security purposes and safeguards to protect themselves from sudden import surges from highly subsidized farm products of developed nations, developed countries are looking for a deal in export competition. Photo: AFPPremium
While developing countries want a deal for a permanent solution on public stockholding for food security purposes and safeguards to protect themselves from sudden import surges from highly subsidized farm products of developed nations, developed countries are looking for a deal in export competition. Photo: AFP

The meeting will begin without any substantial item on the agenda or negotiating text, which would make it all the more difficult to arrive at a deal

New Delhi: Negotiating officials at the 10th ministerial meeting of the World Trade Organization (WTO) which begins on Tuesday will be hard-pressed to show that the multilateral body can still deliver deals, amid widely divergent expectations and rising bilateral and plurilateral deals.

The four-day meeting, however, will begin without any substantial item on the agenda or negotiating text, which would make it all the more difficult to arrive at a deal that would satisfy both sides.

While developing countries want a deal for a permanent solution on public stockholding for food security purposes and safeguards to protect themselves from sudden import surges from highly subsidized farm products of developed nations (special safeguard mechanism or SSM), developed countries are looking for a deal in export competition, through which they expect to ask developing countries to reduce their hidden export subsidies.

WTO succeeded in delivering its first deal since inception at the Bali ministerial conference in December 2013, where a four-year reprieve from challenge was provided to developing countries to continue their farmer subsidies while procuring food for distribution through the public distribution system and a trade facilitation agreement was sealed to reduce customs barriers for cross-border movement of goods. Later, the Narendra Modi government which took charge in May 2014 insisted that the Bali deal was an unfair one and successfully forced member countries to amend it, giving developing countries an indefinite reprieve on public stockholding until a permanent solution is found.

The developing vs the developed: a tug of war

However, members failed to continue with the momentum of success at Bali to prepare a post-Bali work programme as was agreed upon. The consensus-driven approach at the multilateral forum has also proved difficult to reach a deal. However, when it comes to hard negotiations, it is mostly a group of developing countries such as India, China and Indonesia and developed countries such as the US and Japan as well as the European Union which make or break a deal. The key contention of developed countries recently has been that China and India have achieved certain economic stature and hence should bear more burden of trade liberalization and should not insist to be treated equally with other developing countries demanding similar treatment. However, India and China insist that large sections of their population are still poor and hence they also should benefit from differential treatment that developing countries deserve under the development mandate of the Doha trade negotiations.

Recent attempts by developed countries to form a new category of developing nations—Low Income Developing Countries—is seen as an attempt to weaken the developing country agenda by excluding countries such as India and China, an Indian trade official said, speaking on condition of anonymity.

“We are still struggling to provide basic infrastructure to all our people. Therefore, to treat us different from other developing countries is too early and too soon," trade minister Nirmala Sitharaman said on 7 December.

India wants a permanent solution on public stockholding for food security purposes which it hopes will allow it to roll out new food programmes that is not permitted under the current arrangement. It has also rejected a proposal by the developed countries to scrap the Doha round as it has not made much progress and has insisted that without harvesting the key features of the Doha round, it will not agree to a new round of trade talks. India is also against giving up the limited headroom that it has in giving export subsidies under export competition.

Way forward

Though differences seem unbridgeable, countries may come down from their extreme positions and work towards a deal at Nairobi. “The EU is committed to multilateralism and although the Doha development round has stalled we are working to achieve a more limited set of Doha outcomes that would be particularly beneficial to developing countries," EU trade commissioner Cecilia Malmström wrote in a blog post on the European Commission website.

Jonathan Hepburn, agricultural programme manager at the International Centre for Trade and Sustainable Development (ICTSD), said the WTO’s first ministerial conference in Africa could be an opportunity for nations to agree on how they’ll ensure global markets for food and agriculture are more efficient, equitable and sustainable in the future. “It could also see governments agree on concrete outcomes in areas like food aid or cotton, which are very important for some of the world’s poorest countries. It’s important that governments move beyond debating the fate of Doha, and start actually writing new farm trade rules that improve food security, create decent jobs and raise rural incomes for the poor," he added.

T.S. Vishwanath, principal adviser at APJ-SLG Law Offices, said it is important for the Nairobi conference to succeed, as a setback will further dilute multilateralism in trade negotiations, especially at a time when the US-led mega-regional trade agreement Trans-Pacific Partnership has been finalized. “Anybody who is interested in multilateralism should work towards the success of the Nairobi ministerial (conference)," he added.

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