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TWN
Info Service on WTO and Trade Issues (Feb26/15)
WTO: Bilateral deals in hand, India’s resolve faces crucial
test at MC14 Geneva, 13 Feb (D. Ravi Kanth) — The Indian commerce secretary, Mr. Rajesh Agrawal, on 12 February, held meetings with the Director-General of the World Trade Organisation as well as with trade envoys of different coalitions to discuss the state of play in the run-up to the WTO’s 14th ministerial conference (MC14), to be held in Yaounde, Cameroon, on 26-29 March, said people familiar with the development. Amid grave doubts over whether New Delhi will adhere to its hardline positions on proposed WTO reforms, agriculture, the e-commerce moratorium, and the Joint Statement Initiative (JSI) on investment facilitation for development, Mr. Agrawal, in his first exploratory visit to Geneva, held a marathon meeting – including apparently a one-on-one meeting with the DG, Ms. Ngozi Okonjo-Iweala – on several issues, said people familiar with the development. Following the US-India framework for an “Interim Agreement regarding reciprocal and mutually beneficial trade” announced earlier this week, which Mr. Agrawal and his team negotiated, doubts are being cast over whether New Delhi will remain wedded to the positions it echoed two years ago at the WTO’s 13th ministerial conference (MC13) in Abu Dhabi in March 2024. At MC13 in Abu Dhabi, India adopted a hardline position on agriculture, calling for a permanent solution for public stockholding (PSH) programmes for food security purposes in developing countries. During the dying minutes of the meeting, the Indian trade minister seemingly chastised the DG for not brokering an agreement on PSH – as she had done with other issues – said people familiar with the development in the final “green room” meeting, who asked not to be quoted. Also, after initially blocking the continuation of the moratorium on customs duties on electronic transmissions, India changed its stance at the last minute at the Abu Dhabi meeting following an alleged request from the host country and then the European Union trade commissioner, said people familiar with the development. It is against this backdrop that India reportedly allowed the e-commerce moratorium to be extended for two more years. However, at the Abu Dhabi meeting, India had reportedly blocked a decision on investment facilitation for development on grounds that it is not “a trade agreement”. During the meeting with the DG this week, these issues apparently surfaced against the backdrop of Ms. Okonjo- Iweala’s stated positions on these issues. The DG has reportedly called for an endorsement from ministers to start the process of discussions and negotiations on proposed WTO reforms after MC14. She has also repeatedly underscored the need for a decision on digital trade, including the continuation of the moratorium on customs duties on electronic transmissions. Lastly, the DG has publicly called for a decision on the incorporation of the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement at MC14. It is not clear whether the DG succeeded in convincing the Indian commerce secretary to have a rethink during the marathon meeting, given the far-reaching positions on agriculture and digital trade adopted by India in the interim agreement with Washington, said a trade envoy who asked not to be quoted. The Indian commerce secretary, who is seemingly new to multilateral trade negotiations and has not participated in any previous WTO ministerial conference, is apparently in a listening mode and is seeking to learn what countries are planning to do, said people who met him. He also held a lunch meeting with different developing country coalitions, including the African Group and the LDC Group. Interestingly, this is the first time that India has not tabled a proposal on agriculture – particularly on a permanent solution for PSH – based on the interim “peace clause” agreed at the WTO’s ninth ministerial conference in Bali, Indonesia, in December 2013. Though trade ministers had agreed at the Bali meeting to take a decision on the permanent solution for PSH at the WTO’s 10th ministerial conference (MC10) in Nairobi, Kenya in December 2015, the issue continued to be blocked by the United States at the WTO’s 11th ministerial conference (MC11) in Buenos Aires, Argentina in December 2017, which led to the collapse of the conference, a former Indian trade envoy told the SUNS. However, India is now in a seemingly tenuous position due to its sweeping bilateral market access commitments with the EU and the US in agriculture and other areas, which have reportedly been opposed by farmers and industrial workers in India. Therefore, it is not clear whether India will be able to press ahead with its hardline multilateral positions in these areas following the commitments made in the bilateral framework agreements with Brussels and Washington, said a former Indian government official who asked not to be quoted. So far, India has opposed the three proposed WTO reform issues: amending the practice of consensus-based decision-making, altering special and differential treatment (S&DT) based on the self-designation framework, and level-playing field issues arising from policies allegedly adopted by non-market economies such as China, said people familiar with the development. On consensus-based decision-making, India is understood to have stated that negotiations on trade and investment require “explicit consensus” and that such issues were removed from the Doha Work Programme. It stressed that new negotiations require a ministerial decision and that additions of plurilateral agreements in Annex 4 of the WTO Agreement require consensus under Article X.9 of the Marrakesh Agreement. On normalizing plurilateral initiatives without multilateral consensus, India has reportedly argued that IFDA is not a “trade agreement” under Article X.9 and that JSIs cannot be used to reintroduce issues removed from the Doha agenda. India has consistently opposed the incorporation of IFDA into the Annex 4 list of plurilateral agreements, said people familiar with the development. It treats the JSI on investment facilitation as being outside the WTO’s legitimate negotiating remit absent an explicit mandate. India has also fiercely opposed differentiation among developing countries for availing of S&DT, as demanded by the US and other developed countries at the WTO, said people familiar with the development. However, it will be a “litmus test” whether India will hold onto its stated positions or concede ground on WTO reform, agriculture, IFDA, and legitimizing plurilateral agreements, said people familiar with the development. India may stay silent on level-playing field issues because they seem to be targeted against China, said people familiar with the development. When asked for a comment on what transpired during the Indian commerce secretary’s meetings with the DG and trade envoys, the Indian trade envoy Senthil Pandian did not respond to SUNS’s request at the time of writing. +
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