Venu Menon
Wellington, March 3,2024
The World Trade Organisation (WTO), which concluded its 13th Ministerial Conference (MC13) in the United Arab Emirates (UAE) on Friday, 1 March 2024, remained deadlocked on setting new rules for global trade.
The biennial meeting of trade ministers drawn from 166 WTO member states to sort out bottlenecks in global commerce through consensus failed to reach agreement on the key sticking point: curbing subsidies to fisheries and agriculture.
There was partial progress on extending a moratorium on digital trade tariffs when India and South Africa, who are opposed to the move, agreed to a temporary extension of the waiver.
The outcomes (or the lack thereof) of the multilateral trade body’s protracted five-day conclave in the UAE capital Abu Dhabi reflected the knots in the trade ties among members.
Consensus bid
US Trade Representative Katherine Tai summed up the mood when she hinted to media that the onus for the failure to achieve consensus fell on the BRICS bloc of emerging economies.
But New Zealand’s Minister of Trade Todd McClay spun it differently.
“There is a desire for an outcome but there are delegations on both sides of issues saying: the only way we can have an outcome is if our concerns are addressed,” he told media on Friday after the conference was extended by a day in a vain bid to end the stalemate.
It is worth noting that McClay, who was one of three vice-chairs at the summit (chaired by the UAE’s Thani Al Zeyoudi) and also the facilitator for talks to extend the 25-year waiver on digital tariffs, had met his Indian counterpart in New Delhi prior to arriving in Abu Dhabi.
India was viewed as the major holdout in efforts to overcome the deadlock around fisheries, agriculture, and extending the digital tariffs moratorium.
But India’s Minister of Commerce Piyush Goyal was prioritising reforms to the WTO’s dispute appellate system.
“The first and highest priority is to get the appellate body of the dispute resolution mechanism [of the WTO] in place because, without that, all the decisions we are taking cannot be adjudicated upon,” he noted.
The WTO’s top appeals court has been in limbo for the past four years after the US opposed the process of appointing its judges.
Fisheries
The Abu Dhabi talks failed to build on progress achieved at the WTO’s 2022 ministerial conclave in Geneva, which spawned a deal on fisheries.
The Geneva deal banned subsidies that promoted illegal and unregulated fishing. The hope in Abu Dhabi was to build a consensus around overfishing, an issue close to the hearts of the Pacific Islands grouping at the summit who attached a dissenting note to a draft deal on changes to fisheries subsidies because they “did not go far enough” in capping the level of subsidies.
India, on the contrary, opposed the draft fisheries deal for not being liberal enough in granting concessions to developing countries, and was seen by some member states as a consensus-breaker on the issue.
Agriculture
Farmer protests at home and an impending general election likely prompted India to block an agricultural package at the MC13. Goyal demanded “permanent rules governing public stockholding (PSH) of food reserves,” and sought exemption from the WTO’s cap on domestic agricultural subsidies on grains, such as rice, that were critical to India’s food security.
“Our objective was that our farmers and our fishermen should not face any kind of harm, no crisis should come, and in that we successfully did not allow any such decision to be taken that would harm any farmers or fishermen,” Goyal said.
E-commerce
But India relented on the issue of extending the moratorium on digital goods sought by most countries by agreeing to hold back customs duties on digital products for two years.
Dispute settlement
India’s crusade for dispute settlement reform at the WTO resulted in the reiteration of the commitment made at MC12 to have a system in place by 2024.
India-NZ trade
But the big takeaway from MC13 for India-New Zealand trade relations, symbolised by the presence of their trade ministers at the WTO summit in Abu Dhabi, is that the economic headwinds stalling multilateral trade will also have to be navigated on the bilateral front.
Venu Menon is an Indian Newslink reporter based in Wellington
