Host of Crucial Issues to Dominate WTO Meet : Daily Current Affairs

Relevance: GS-2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests; Important International institutions.

Key Phrases: Fisheries subsidies, Public stockholding, WTO conference, General Agreement on Tariffs and Trade, Uruguay Round, Fisheries sector, Food security, Minimum support price, World Food Program, TRIPS, Compulsory licensing, Pharma lobby.

Context:

The twelfth Ministerial Conference (MC12) of the WTO will take place during June 12-15 in Geneva to decide on crucial issues impacting world trade. The Ministerial Conference is the highest decision-making forum of the WTO.
Originally it was scheduled to be held from 8th June to 11th June 2020, however, due to Corona Virus pandemic it was postponed to Nov-Dec 2021 i.e. from 30 November to 3 December 2021 and further postponed due to ongoing pandemic.
The last such meeting, the MC11, was held in Buenos Aires, Argentina in 2017.
MC12 is taking place in the background of the ongoing war in Ukraine and the Covid-induced lockdown in parts of China. The global supply chains were already stressed due to the lingering effects of the US-China trade war and the Covid-19 pandemic.

World Trade Organization (WTO)

It is the only global international organization dealing with the rules of trade between nations. The WTO is the successor to the General Agreement on Tariffs and Trade (GATT), which was created in 1947.
The WTO has 164 members and 23 observer governments. Afghanistan became the 164th member in July 2016. In addition to states, the European Union, and each EU country in its own right is a member.
Headquarters: Geneva, Switzerland
Nigeria's Ngozi Okonjo-Iweala is Director-General of the WTO. She is the first African official and the first woman to hold the position.
The Uruguay Round (1986-94) of the GATT led to the WTO's creation. WTO began operations on 1st January, 1995.The primary purpose of the WTO is to open trade for the benefit of all.
The WTO's top decision-making body is the Ministerial Conference. Below this is the General Council and various other councils and committees. Ministerial conferences usually take place every two years.
The General Council is the top day-to-day decision-making body. It meets a number of times a year in Geneva.

Roles:

It operates a global system of trade rules,
It acts as a forum for negotiating trade agreements,
It settles trade disputes between its members.
It supports the needs of developing countries.

The WTO and the United Nations (UN)

Although the WTO is not a UN specialized agency, it has maintained strong relations with the UN and its agencies since its establishment.
The WTO-UN relations are governed by the “Arrangements for Effective Cooperation with other Intergovernmental Organizations-Relations between the WTO and the United Nations” signed on 15 November 1995.
The WTO Director General participates to the Chief Executive Board which is the organ of coordination within the UN system.

Issues taken up oncoming WTO conference:

These are the five important issues that will be discussed at the MC12.

Fisheries sector:

Overfishing and subsidies are the two major issues the Fisheries sector is facing.
Many subsidies by advanced economies are non-specific, and hence kept out of the scope of fisheries subsidies disciplines. Poor countries mostly give specific support to the fisheries sector, and these will be covered by the disciplines.
India, Indonesia, and the African Caribbean and Pacific (ACP) group want greater flexibility to preserve the policy space and to develop their underdeveloped fisheries sector. The group wants the advanced fishing nations to take greater responsibility for the sustainable exploitation of fisheries resources.
The negotiations aim to
- Eliminate subsidies to Illegal, Unreported and Unregulated (IUU) fishing.
- Prohibit subsidies for fishing overfished stocks.
- Subsidies to fishing contributing to overfishing and overcapacity.
- The idea is to curb subsidies that threaten the sustainability of fishing.

Global Fisheries

34 per cent of global fisheries stocks in 2017 were overfished compared with 10 per cent in 1974. This means the reserves are being exploited at a pace where the fish population cannot replenish itself. China, the EU, the US, South Korea, and Japan provide 58 per cent of the total annual $35-billion fisheries subsidy. Fuel subsidies including fuel specific tax exemptions and non-fuel tax exemptions is the major type of fishery subsidy.

Agriculture and food security:

For India, securing the Permanent Solution to the issue of public stock holding (PSH) would be the top priority. The government uses the PSH mechanism to buy rice and wheat from the farmers at the minimum support price (MSP) which is generally higher than the prevailing market price. The government then stores and sells these at a low price to ensure food security to more than 800 million poor people.
Agreement of Agriculture rules limit the ability of the government to purchase food at higher prices. At the WTO’s Bali Ministerial Conference in 2013, WTO members agreed on an interim “peace clause”, agreeing not to challenge in the dispute settlement system the consistency of the support provided by developing members under public stockholding programmes while searching for a permanent solution.
Another critical area at MC12 is food security which focuses on removing export restrictions on supplies under the World Food Program (WFP) procurements. India has been a crucial participant in the WFP programs. India feels that the Food security declaration, other than tokenism, serves no purpose.

Moratorium on E-comm and TRIPS:

To promote e-commerce, the WTO members in 1998 agreed to not charge (Moratorium) Customs Duties on Electronic Transmission for two years. Similarly, members agreed to a moratorium on the launch of disputes at the WTO over intellectual property rights.
This is known as TRIPS non-violation and situation complaints (NVSC) moratorium. The Moratoriums on E-Commerce and TRIPS issues were renewed every two years. MC12 may likely agree to further extension.

Easing pandemic pain:

WTO’s response to the pandemic is a priority for MC12. India and South Africa proposed for waiving patent protections on Covid-19 vaccines temporarily by more generous application of the ‘compulsory licensing’ procedure allowed under the TRIPS agreement.
Looking at the destruction the pandemic has caused, the decision should have been swift. However, under pressure from the pharma lobby, most developed countries argued for solutions which essentially meant opposing the proposal. The MC12 outcome may not be decisive.

Other issues:

The most awaited reform is restoring the functioning of the Dispute Settlement System (DSS) including the Appellate Body (AB). This is needed to preserve the rights and obligations of WTO Members. DSS must maintain an independent, two-tier dispute settlement system, and decision-making by the negative consensus where provided.
Another area being discussed for reform are the Special and Differential Treatment (S&D) provisions of various WTO Agreements. S&D provisions allow the developing and LDC members to take a longer time to meet the various obligations. Many developed countries seek to limit the application of such flexibilities. India considers S&D provisions as non-negotiable, treaty-embedded rights which should not be diluted

Conclusion:

These are challenging times for global trade. WTO Director-General Ngozi Okonjo-Iweala has exhorted members saying, “Time for members to show restraint and agree on texts for MC12”. Some impactful outcomes will show that the WTO is back on track.

Source: The Hindu BL

Mains Question:

Q. Discuss the role of WTO in dealing with the rules of trade between nations in the world.