India reiterates its development oriented position, pressure builds up at WTO meet

Even as Commerce Minister Suresh Prabhu is stressing on India's preference to engage in a development oriented negotiation at the ongoing 11th ministerial conference of World Trade Organisation (WTO) in Buenos Aires, participating delegates have reasons to believe that developed nations such as the US is putting immense pressure on India to agree for a permanent freeze on customs duty on e-commerce transactions.

Currently WTO member countries do not impose customs duties on electronic transmissions on the basis of a moratorium that gets extended in ministerial conferences held once in two years. While India has been agreeing to the temporary moratorium, it had expressed reservation on making it duty free in perpetuity, given the ever changing behavior and scope of e-commerce transactions.

The buzz among the participating delegates is that US wants India to agree for a permanent freeze, if it has to consider India's proposal to extend the current moratorium on Non-Violation and Situation Complaints under the WTO TRIPS Agreement. Like moratorium on e-transactions, every WTO ministerial has been giving a two-year extension on the moratorium on the provision that allows non-violation complaints against activities that are perfectly WTO compliant, but still prone to result in some unintended consequences that harm the business interests of the complainant nation.

Trade experts point out that introduction of non-violation complaints under TRIPS could enable legal challenges to regulatory and public policy measures that may be consistent with the obligations under the TRIPS Agreement. Public health measures such as issuance of compulsory licenses, or packaging restrictions on harmful products could thus be challenged even if these are consistent with TRIPS obligations if non-violation complaints are allowed, a South Centre note points out.

Meanwhile some delegates hint at scheduled close door meetings which they feel are not in the spirit of the transparency that has been promised by the WTO secretariat. In a tweet, activist group, Our World Is Not for Sale alleges that "negotiation schedule" is just formal statements and secret "Green Room" discussions are being planned. The push for talks on investment facilitation is another concern flagged by some participants.  

Meanwhile, Commerce Minister Suresh Prabhu, in his opening remarks during a media interaction on 11 December reiterated India's position as a strong supporter of the multilateral system and said the country re-endorses the centrality of development in WTO negotiations, without introducing differentiation among developing countries.

"India is looking forward to constructive engagement of all members for taking final decisions in areas where specific mandates were provided at Nairobi. The discourse should be on development at the WTO and not to be deflected based on aggregate GDP figures. While in India we are proud of our GDP and growth rates of recent years, propelled by innovative economic policies of my government, we cannot ignore that India is home to more than 600 million poor people. Therefore, we are legitimate demanders for special and differential treatment for developing countries", Prabhu said.

According to him, India wishes to see an outcome in the permanent solution for public stockholding for food security purposes. "A successful resolution of this issue would send a strong signal that trade openness and addressing hunger need not be in conflict", he said.

On the issue on the negotiating table of agricultural domestic support, he reminded that the agreed objectives of  agriculture negotiations in the Doha Round, called for continuation of the reform process in this area, rather than further widening and perpetuating of the imbalance between developed and developing countries. "Any meaningful reform in agriculture must first seek to reduce the disproportionately large subsidies of the developed countries".

Prabhu also emphasized that Special and differential treatment for developing countries is a very important part of the WTO's mandate and must be preserved.

As regards new issues that are sought to be introduced into the negotiating agenda of the WTO, such as e-commerce, investment facilitation and MSMEs, in India's view agreeing to these would be extremely onerous and would curtail our policy space to implement appropriate development policies, he pointed out.

The minister also added that while India is not opposed to taking cognizance of change, the country cannot ignore the legacy issues of the Doha Round. "Discussions on new issues are distracting attention from priority areas for which mandates exist. India sees little rationale for new issues when so many issues are awaiting resolution. The fact of the matter is that new issues are yet to be fully understood by the membership in terms of their scope, definitions and implications", he said.