Outcome of India’s trade deals focus of Nirmala Sitharaman’s first Geneva visit

Geneva: On her first visit to Geneva as India’s trade minister, commerce minister Nirmala Sitharaman is expected to underline the need to deliver development outcomes of trade deals that would address the asymmetries in the global trading system that deny equitable results to developing and poorest countries, according to people familiar with the visit.

Sitharaman, who will be on a two-day visit to Geneva beginning on 18 July, will meet the chiefs of the World Trade Organization and the United Nations Conference on Trade and Development as well as hold a series of meetings with trade envoys.

During these meetings which will last until 19 July, Sitharaman will assess the state of play in the ongoing negotiations on a range of unresolved issues of the Doha Development Agenda as well as controversial new issues being pushed by major industrialized countries along with some developing countries, said a person familiar with her programme.

The Indian minister will hold an open house at Geneva’s Graduate Institute where she will deliver a lecture on the importance of multilateral trade initiatives as opposed to bilateral arrangements. The Trump administration in the US is increasingly opting for bilateral outcomes under the banner of America First and Buy America and Hire American slogans as opposed to multilateral trade liberalization.

Sitharaman is coming to Geneva at a time when there is still no clarity on the likely scenario for the WTO’s 11th ministerial meeting in Buenos Aires in December.

The leaders of the G20 countries on 8 July merely said that their countries will “work together with all WTO members to make the eleventh WTO Ministerial Conference a success.” WTO members are mandated, as per the Nairobi ministerial decision of December 2015, to negotiate a permanent solution for public stockholdings for food security programs and deliver a meaningful result on special safeguard mechanism for developing countries in Buenos Aires.

But there is little or no progress on these issues, which are meant to guard developing countries against unforeseen surges in the imports of agricultural products and which are at the core India’s trade agenda.

On Friday, trade envoys from select countries held a brief meeting on these two issues without making any progress.

Major industrialized countries continued to resort to stonewalling, insisting that India and other members of the G33 group of countries must table “revised” proposals for making progress.

The G33 developing countries had demanded that market price support for public stockholding programs must be exempt from any subsidy reduction commitments like the green box programs that are exempt under the WTO rules.

But the US and the European Union—which spend more than $200 billion on green box support schemes that are found to be trade-distorting—have rejected the G33’s demand time and time again.

Without addressing the unresolved issues of the Doha work program, major industrialized countries and their allies in the developing world want to embark on new issues such as e-commerce, and disciplines for micro, small, and medium enterprises (MSMEs) among others. The EU, Japan, Australia, Canada, Singapore, Colombia, Qatar, and Russia, for example, circulated proposals on 14 July calling for a new “holistic” work program on electronic commerce for starting negotiations after Buenos Aires.

In three separate proposals, they suggested that the time has come for pursuing a new work programme in place of the existing 1998 work programme because of the importance of e-commerce.

The 1998 work programme required members to make recommendations based on the work conducted in four different WTO bodies—the goods council, the council for trade in services, the TRIPS (trade-related intellectual properties) council, and the development division.

Despite 17 years of the Doha Development Agenda negotiations, in which developing and poorest countries were promised developmental outcomes for integrating into the global trading system, there is little or no progress on development issues such as the permanent solution for public stockholding programmes for food security, the special safeguard mechanism, and movement of short-term services providers.

In sharp contrast, the industrialized countries and their allies in the developing world managed to grab an outcome on trade facilitation for goods which was not part of the Doha agenda as it was dropped from the work program in 2003. India’s then trade minister Arun Jaitley had opposed what are called the four Singapore issues which include trade facilitation. The other three Singapore issues are: investment, competition policy and government procurement.

But in 2004, trade facilitation was included in the Doha work programme after industrialized countries promised that they will address the developmental issues in agriculture, industrial goods, and services based on the principle of less-than-full reciprocity (LTFR).

The LTFR principle mandated developed countries to commit to sharp reduction commitments for reducing their trade-distorting farm subsidies as well as barriers in market access for agricultural and industrial products while the developing countries were required to undertake commensurate commitments.