June 24, 2022
Good morning. In today’s either/view, we discuss whether the agreements of the WTO Ministerial Conference are good for India. We also look at the revival of the Old Silk Route in Sikkim, among other news.
📰 FEATURE STORY
WTO Meeting Outcomes – Were They A Win For India?
World Trade Organisation (WTO) Director-General Ngozi Okonjo-Iweala recently said multilateralism is alive and well. The WTO and India aren’t exactly the best of friends. While the WTO acts as a referee of sorts in the field of global trade, it’s also a facilitator of treaties that affect economies. One could argue whether it’s biased against developing countries or whether developed countries have too much sway.
This topic of discussion came to the forefront again at the recent WTO’s 12th Ministerial Conference. While India objected to some proposals in the lead-up to the conference, in the end, it came away with what it claimed were victories. Will the proposals agreed upon actually help India?
Context
Following repeated postponements, the WTO held its first Ministerial Conference in five years. As dawn broke out in Geneva, the organisation’s 164 members came to an agreement on a host of issues. Negotiators dubbed it historic as it showed the willingness of countries to keep communications open and work together multilaterally.
Here’s some of what was agreed upon. To have a well-functioning dispute settlement system for all its members by 2024. The appellate body has been dormant since 2020 as the USA refused to appoint new judges. On the pandemic response, eligible countries can override Covid-19 vaccine patents until 2027. It includes most developing countries except China. One of the criticisms of the global response to the pandemic has been vaccine inequity. Rich developed countries had access to vaccines faster and easier than developing ones like in Africa.
Amid a global food crisis, members promised emergency food security measures that are minimally trade distortive. India made the controversial move to ban wheat exports to keep a check on domestic inflation. India wanted special provisions to allow countries to export grains from official reserves under exceptional circumstances to address the food shortage. The established rules made it difficult for countries to do so if they’ve been purchased at a fixed price, like MSP.
Then there’s the issue of fisheries subsidies. Here’s where India wanted to have a bigger say. The WTO was tasked by the UN General Assembly to formulate a plan to remove harmful fisheries subsidies. Before the conference began in earnest, India objected to the negotiation process. They said it wasn’t transparent and thus lacked credibility.
Part of the process involved information collected through questionnaires from ambassadors of 50 countries. India said its ambassadors were in Geneva in their private capacities and not as official representatives. India also objected to the text on the subsidies calling it unfair. In the end, an agreement was reached to end subsidies on illegal, unreported, and unregulated fishing and the fishing of overfished stocks.
With these takeaways, did India get what it wanted, and will it help the economy? Or are things not quite what they seem?
VIEW: The best possible outcomes
Compromise can sometimes be a dirty word. However, when more than 160 countries are trying to agree on issues as complex as those discussed at the conference, India came away victorious. Leading the chorus was Minister for Commerce & Industry, Piyush Goyal who said Prime Minister Narendra Modi’s focus on welfare for the poor was adopted on the global stage. He said the days of other countries arm-twisting India with poor outcomes were over.
Concerning fisheries subsidies, the agreement may not be 100% what India wanted, but given the circumstances, it’s significant. It’s a first-of-its-kind, sustainability-driven trade agreement, the Agreement on Fisheries Subsidies (AFS). India now has a two-year transition period to phase out subsidies on illegal and unreported fishing and on over-exploited stocks. Goyal called it a win-win as there are no restrictions on fishing that would hurt India. As Sheela Rai from the National Law University wrote, the agreement is fair and doesn’t compromise Indian fishermen.
The AFS represents an important milestone in global trade. It’s also no less an achievement amidst a global food shortage and high prices. Despite some differences, India remains committed to the WFP as it recently supplied wheat to Afghanistan. On the vaccine patent waiver, it would allow developing countries in their fight against Covid-19. There are also no limits on exports. India can produce for domestic use and outbound consignments.
COUNTERVIEW: Falls short on key issues
While the government claims victory, the reality is a mixed bag. The fisheries subsidies were probably India’s biggest point of contention ahead of the conference. The outcome isn’t good. India failed to wrangle an originally proposed 25-year period to allow continued government support to build fishing infrastructure. It’s especially bad since developed countries have already invested a lot here. India has a long road ahead to catch up.
Concerning vaccine patents, therapeutics and diagnostics have been left out. The final deal included patent waivers limited to just output and export that India deemed too little too late a while back. India was at the forefront of the TRIPS waiver issue, going back to October 2020. When it joined the QUAD, it joined a party that undermined the waiver decision. The draft text includes the EU’s proposal that has a narrow focus on relaxing compulsory licensing provisions. It would favour the pharmaceutical companies, who opposed the waiver. The deal doesn’t make room for additional flexibility.
On food security, no permanent solution to public stockholding of food was discussed. India needs this as it had to secure its rights to continue its food subsidy programme. As India’s exports of food grains increased, several WTO members questioned whether they were from publicly held food stocks. India didn’t address this. If we’re talking about winners, the biggest one is the EU. It succeeded in diluting the agreements on fisheries subsidies and the TRIPS waiver. Overall, India should be disappointed with the 12th WTO Ministerial Conference.
What’s your opinion on this?
(Only subscribers can participate in polls)
a) The agreements of the WTO Ministerial Conference are good for India.
b) The agreements of the WTO Ministerial Conference are bad for India.
🕵️ BEYOND ECHO CHAMBERS
For the Right:
How India’s Blind Admiration For Sages Hurts Our Democracy
For the Left:
How Droupadi Murmu’s Selection As NDA’s Presidential Candidate Was More Than Just A Political Decision
🇮🇳 STATE OF THE STATES
Dilli Bazaar (Delhi) – The Delhi government will launch the Dilli Bazaar e-portal to enable people to virtually visit the capital city’s marketplaces. The portal will go live in December as 10,000 vendors have been empanelled. The experience will be similar to shopping on e-commerce platforms. The goal is to bring one lakh shops onto the portal within six months of its launch. The products will be relatively cheaper because of zero-setup cost.
Why it matters: The government wants to showcase Delhi’s unique markets in a virtual platform and expose them to buyers globally. The portal will opt for the Open Network for Digital Commerce (ONDC) protocol. It will help buyer and seller transactions from closed to open platforms.
Karaikal merger (Puducherry) – Posters placed across Karaikal seeking a merger of the enclave of Puducherry with Tamil Nadu has failed to strike a chord. Instead, it has rekindled the demand of residents wanting Union Territory status. Public welfare organisations have reiterated their demand for this. They feel the town has been neglected by the Puducherry government. Residents have also supported the move.
Why it matters: The Karaikal Struggle Group (KSG) has been demanding Union Territory status for decades. It previously came up when Telangana was formed out of Andhra Pradesh, and Goa was granted statehood. The KSG feels a Union Territory status would help the town develop and ensure its identity as an erstwhile French colony wouldn’t be lost.
Display of rare artefacts (Bihar) – Ratneshwar Singh, the heir of the king of Dharbhanga in Bihar, has voiced his objection to the Bihar museum’s plan to display rare ivory and other artefacts of the Darbhanga Museum in Patna. Singh, in a letter to chief minister Nitish Kumar, said the artefacts were given to the state government, not for display in commercial or other events. He said displaying them might cause damage.
Why it matters: Previously, the state had to retract its decision to shift rare Thanka paints from famous author and traveller Rahul Sankrityayan from Patna Museum to Bihar Museum. It came in response to his daughter Jaya Sankrityayan’s objections. Currently, the Patna Museum has Tibetan paintings donated by the family of Rahul Sankrityayan.
Campaign for free electricity (Gujarat) – AAP activists took to the streets across the state demanding free or cheaper electricity from the ruling BJP government. They cited the Delhi model under which 200 units are provided for free. Its Muft Bilji Andolan was launched on June 15 and will continue till the 26th. AAP cadre has been organising rallies and pad yatras as part of the campaign. Arvind Kejriwal will likely visit the state as the campaign concludes.
Why it matters: The BJP has criticised the AAP for offering freebies like free electricity. Last month, Kejriwal, at a rally, promised better schools and hospitals while citing the BJP’s failure in the state. The state is likely to go to the polls later this year. The AAP is looking to contest all 182 seats in the elections.
Old Silk Route (Sikkim) – Sikkim is mulling the reintroduction of the Old Silk Route which was used by the British. Officials visited the Lingtam Padamchen GPU on an invitation from the panchayat president and members to assess the possibility of bringing back the old route. It was previously used for trade with Tibet. Tourists usually use this place as an overnight destination en route to Zuluk and the Gnathang valley. The deputy commissioner assured necessary help will be given to complete the project.
Why it matters: The goal of bringing back the route is to help increase tourism. They want the place to be used for more than just a pit stop by tourists as they could extend their stay by more days. It would also help the local economy. This route connected India with China, through Bhutan, West Bengal, and Sikkim. It’s marked by zig-zag roads along the mountains.
🔢 KEY NUMBER
₹11.2 crores – The average salary of Indian CEOs for FY2022. It’s more than pre-pandemic levels according to a Deloitte survey. It’s also the first survey year where the CEO Total Compensation crossed the ₹10 crores mark.