Ministerial Conference 13 (MC13) of WTO and India
By
Dr H A C Prasad
Former Senior Economic Adviser, Ministry of Finance, GOI
MC13 ended in Abu Dhabi on March 2nd 2024 with no major achievements, though India has reason to be satisfied as there were no adverse decisions for India in an election year.
In the Agriculture front, no permanent solution on public stockholding (PSH) for Food Security purpose could be reached and the status quo continues. The developing countries including India had made the biggest blunder in the Agreement on Agriculture (AoA) negotiated during the Uruguay Round of GATT formally ratified in 1994 at Marrakesh of allowing developed countries to reduce their subsidies from a high base, while they themselves had a low base of subsidies. With the subsidies classified under different boxes, no real reduction of subsidies by developed countries happened except some shifting of subsidies from one box to another. In Abu Dhabi, India stood firm on its ground to protect the interests of the Indian farmers. Similarly, India did not yield ground in the issue of Fisheries subsidies. Thus there was no headway in these 2 major MC13 Agenda areas.
On the issue of E-Commerce, the WTO members including India agreed to extend the moratorium on import duties on E-Commerce by another two years, thus maintaining the status quo.
India along with South Africa, successfully blocked the Chinese led Investment Facilitation Agreement as it is a non-trade issue, just like Environment and Labour, which are outside the purview of the WTO and can be discussed in other relevant forums.
While Industrial tariffs was not a part of the MC13 agenda, efforts by some countries to discuss Industrial Policy Issues were also not agreed to as they were not a part of the Original Marrakesh Framework.
The only major decision to which India agreed was the new disciplines on services domestic regulations supported by 72 WTO members. Though India is not a part of the plurilateral agreement and need not give any new additional commitments, it can benefit from any additional commitments given by other countries. While this agreement is expected to lower trade costs and facilitate services trade by streamlining and simplifying procedures, my hunch is that the OECD’s Services Trade Restrictiveness Index could make a back entry through these regulations and pressurize countries including India to liberalize many services, based on the priorities of developed countries supported by a highly subjective STRI index. This however is not something we should be afraid of, but be prepared with our strategies. Since we are not a part of the plurilateral agreement, but benefit from any liberalization by other countries, we are in a better position to use the opportunity. However , discussing services at WTO as a part of the complete negotiations with give and take between different sectors and areas is still the First Best if agreed to by WTO members.
