The WTO’s leaky boat may be our best hope in a storm
PremiumA coalition of developing nations could help India weather international adversities
Russia’s incursion into Ukraine’s sovereign territory has catalysed a new phase in the extant geo-economic and geopolitical arrangements. While Western academics have been debating whether this new European war spells the end of a liberal regime that defined the world order since the fall of the Berlin Wall (and break-up of the Soviet Union), the Russia-Ukraine conflict has reactivated many fault-lines that lay dormant in the global economy. And, for developing countries like India, multilateral platforms like the World Trade Organization (WTO) hold out the best chance of confronting these challenges, despite the many shortcomings that have hobbled the institution.
A food crisis tops the list of phantoms emerging from the ravages of this war; it will rekindle many second order effects that the world had temporarily forgotten, which could include renewed contestation between the West and poor nations, or even civil wars in poverty-stricken nations. One of the reasons for hostilities reviving could be because the notion of trade in the US and EU is still rooted in an outdated economic orthodoxy, even while op-eds in leading newspapers and policy briefs from think-tanks debate the need for a new heterodoxy to replace the now-defunct canon.
The WTO’s role has, hence, become non-negotiable, given the severe food crisis confronting the planet. A 6 June report from the Food and Agriculture Organisation and the United Nation’s World Food Programme (WFP), titled Hunger Hotspots, predicts that 20 countries will face a heightened food availability crisis over the next three months.
While it is true that Russian aggression has triggered a global food crisis, it is equally true that the world was already facing a food emergency before February 2022. About 2.3 billion people were classified as food insecure during 2021. According to the Global Report on Food Crises, another WFP publication, global hunger levels were alarmingly high in 2021, with “close to 193 million people acutely food insecure and in need of urgent assistance across 53 countries/territories." The pandemic and climate change amplified the food crisis during 2020 and 2021. The problem is compounded when energy price inflation (which bleeds into fertilizer prices) and fractured supply chains add affordability to availability problems.
The food emergency shifted the world’s attention towards India and 29 other countries which banned wheat exports soon after Russia’s war sent grain prices skyrocketing globally. While India may have been compelled to impose an export ban, with wheat production falling short of forecasts and total foodgrain stocks dipping, solutions for the supply of grains to the WFP were actually found at the WTO’s 12th Ministerial Conference, or MC12 held recently in Geneva. India and the others agreed to supply wheat to the WFP, while being allowed to meet their domestic food security needs.
The Western media, though, has not stopped pillorying India’s export ban, even though wheat exports during 2021-22 (before the ban was enforced) were only slightly over $2 billion, or a mere 0.5% of the country’s total exports. The Western leadership’s stance at the WTO on agriculture has long undermined India’s attempts to ensure food security for its citizens through subsidies at both the production and consumption stages. The formula being used to determine whether these subsidies are within permissible limits is based on outdated data; all attempts by India and other developing countries to seek a permanent solution have met with repeated filibustering.
A drumbeat of protests against India has been revived in a seemingly coordinated move. Seven WTO members—including the US, Japan, the EU and UK—raised concerns over India’s export bans at the trade body’s first agriculture meet after MC12.
In parallel, and a seemingly unconnected move, 12 Congressmen have written to US President Joe Biden, requesting him to lodge formal objections at the WTO against India’s trade-distorting agricultural policies. Their letter does not mention anything about the antiquated formula, or how US subsidies could also be trade distorting. There are suspicions, unfounded of course, that these protests are sponsored by large grain traders who now fear that India’s ban may extend to even rice exports, which were worth about $10 billion during 2021-22.
It’s not only foodgrains. The duplicity and blinkered vision of rich nations was on full display when many of them stubbornly refused to relax intellectual property rights for global vaccine distribution at the height of the pandemic. These advanced nations decided to put private profit ahead of public health in times of global crisis. And, yet, it was at the MC12 that a solution was hammered out for developing countries to produce and sell patented vaccines, both in the domestic and international markets, even though this comes two years after India and South Africa had first proposed such a covid occasioned relaxation and when the pandemic seems to be on the wane.
Some of the trade-related moves against India possibly have their genesis in the Western hemisphere’s disappointment with New Delhi’s stand vis-à-vis Russia’s expansionary moves. An old strategy seems to be re-emerging: continue to court the Indian leadership at plurilateral meetings, but deliver a thousand cuts via diverse platforms, including the media. India’s best chance of resistance may yet lie in creating a coalition of developing nations on multilateral platforms.
Rajrishi Singhal is a policy consultant and journalist. His Twitter handle is @rajrishisinghal.