Syllabus: Effects of liberalisation on the economy (post-1991 changes), changes in industrial policy and their effects on industrial growth.
The World Trade Organization’s164 members (12th Ministerial Conference) in a historic step approved a series of trade agreements including commitments on fish, a partial waiver of intellectual property (IP) rights for COVID-19 vaccines, and pledges on health and food security.
Important Deals struck:
- On Fisheries: prohibited certain forms of fisheries subsidies that contribute to overcapacity and overfishing, and eliminates subsidies that contribute to IUU-fishing recognizing that appropriate and effective special and differential treatment for developing country Members and least developed countries.
- The accord to curb fishing subsidies is only the second multilateral agreement setting new global trading rules struck in the WTO’s 27-year history and is far more ambitious than the first, which was designed to cut red tape.
- The fishing subsidies deal has the potential to reverse collapsing fish stocks
- On partial IP waiver: Allowed the developing countries to produce and export Covid vaccines
- Maintaining a moratorium on e-commerce tariffs: It is considered vital to allow the free flow of data worldwide.
India has been able to secure a favourable outcome at the WTO after many years, despite a strong global campaign against Indian farmers and fishermen.
What were the concerns raised by India at WTO:
- On issues of Fisheries and E-commerce: Revmoval of subsidies will hurt fishermen. So, India demanded to make extensive exceptions on a 20-year negotiation to cur harmful government fishery subsidies.
India is seeking broad exemptions for its fishing industry, including a 25-year phase-in period and a 200-nautical-mile exclusion for its artisanal anglers.
- On E-commerce: India fears that new rules could provide the pretext for unfair mandatory market access to foreign companies. This will hurt the rapidly growing domestic e-commerce sector, which is still developing in India.
- On Food: WTO should renegotiate subsidy rules for government-backed food purchasing programs aimed at feeding poor citizens in developing and poor countries.
- India wants assurances that its public stock-holding program, which buys exclusively from the nation’s farmers and has exported in the past, cannot be challenged at the WTO as illegal.
- On vaccines: India wants to waive IP rights for vaccines and extend the WTO ban on digital duties
- Special and differential treatment (S&D) must continue, as such treatment has been a treaty-embedded and non-negotiable right for all developing members
- Principles are sacrosanct: Ensure that multilateral rule-making processes are neither bypassed nor diluted. The principles of non-discrimination, predictability, transparency and most importantly, the tradition of decision-making by consensus need to remain sacrosanct.
Q. For India, though the multilateral trading system embodied by the WTO provides security and predictability. India has had a chequered relationship with the World Trade Organisation (WTO). Examine. Also, Suggest reforms that needs to be undertaken in the WTO. (250 words)
Source: World Trade Organization