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The story so far: On June 17, member countries of the World Trade Organization (WTO) wrapped up the Ministerial Conference’s twelfth outing (MC12) securing agreements on relaxing patent regulations to achieve global vaccine equity; ensuring food security, according subsidies to the fisheries sector and continuing moratoriums relevant to e-commerce, among others. Together they constitute what WTO’s Director-General Ngozi Okonjo-Iweala referred to as the “Geneva Package.” India saw some successes at the MC12 with respect to the above mentioned sectors.
The MC is at the very top of WTO’s organisational chart. It meets once every two years and can take decisions on all matters under any multilateral trade agreement. Unlike other organisations, such as the International Monetary Fund or World Bank, WTO does not delegate power to a board of directors or an organisational chief. All decisions at the WTO are made collectively and through consensus among member countries at varied councils and committees. This year’s conference took place in Geneva, Switzerland.
The agreements on the subject are of particular significance to India. Referring to its status as a significant contributor to the World Food Programme (WFP), India had earlier stated that it had never imposed export restrictions for procurement under the programme. It put forth that a blanket exemption could constrain its work in ensuring food security back home. In such a situation, it would have to keep its WFP commitments irrespective of its domestic needs. Negotiators agreed that member countries would not impose export prohibitions or restrictions on foodstuffs purchased for humanitarian purposes of the WFP. The decision would however not prevent member countries from adopting measures for ensuring domestic food security.
Negotiators could not reach agreements on issues such as permissible public stockholding threshold for domestic food security, domestic support to agriculture, cotton, and market access. The central premise of the agreements was to ensure availability, accessibility and affordability of food to those in need, especially in humanitarian emergencies. It encouraged member countries with available surplus to release them on international markets in compliance with WTO regulations. Moreover, it instituted a work programme to come up with measures to help LDCs (least-developed countries) and NFIDCs (Not Food Importing Developing Countries) enhance their domestic food security and bolster agricultural production.
India successfully managed to carve out an agreement on eliminating subsidies to those engaged in illegal, unreported and unregulated fishing. The only exception for continuing subsidies for overfished stock is when they are deemed essential to rebuild them to a biologically sustainable level. Overfishing refers to exploiting fishes at a pace faster than they could replenish themselves — currently standing at 34% as per the UN Food and Agriculture Organization (FAO). Declining fish stocks threaten to worsen poverty and endanger communities that rely on aquatic creatures for their livelihood and food security.
Further, the agreements hold that there would be no limitation on subsidies granted or maintained by developing or least-developed countries for fishing within their exclusive economic zones (EEZ).
Member countries agreed to extend the current moratorium on not imposing customs duties on electronic transmission (ET) until MC13 — scheduled to take place in December 2023. 105 countries which includes the U.S. , the U.K., Australia, China and Japan among others , had sought an extension of the moratorium, with India and South Africa being in opposition.
Broadly, ETs consist of online deliveries such as music, e-books, films, software and video games. They differ from other cross-border e-commerce since they are ordered online but not delivered physically.
Proponents had put forth that the moratorium would help maintain certainty and predictability for businesses and consumers particularly in the context of the pandemic. On the other hand, India and South Africa, citing data from the UN Conference on Trade and Development (which calculates the amount of printed matter, music and video downloads, software and video games), submitted that extending duty-free market access due to the moratorium resulted in a loss of $10 billion per annum globally — 95% of which was borne by developing countries. Additionally, they had also sought more clarity on what constitutes electronic transmission.
Customs duties have been traditionally used to avert an undesired surge in imports, allowing nascent domestic industries to remain competitive. Developing countries would need to import sizeable equipment and services for upscaling their digital capabilities. Customs duties provide the necessary capital infusion for capacity building and in turn, attempt to address the digital divide — particularly high in low-income and developing countries, further exacerbated by the COVID-19 pandemic. It is in this context that India and South Africa had sought to preserve policy space for the digital advancement of developing countries by letting them generate more revenues from customs and thereby facilitate more investment.
Member countries agreed on authorising the use of the subject matter of a patent for producing COVID-19 vaccines by a member country, without the consent of the rights holder. Further, it asks member countries to waive requirements, including export restrictions, set forth by WTO regulations to supply domestic markets and member countries with any number of vaccines. The agreement, however, comes too little, too late for economically poorer countries.
Several LDCs have suffered in their efforts to combat the now nearly three-year-old pandemic, owing to factors such as a stressed balance of payments situation , different levels of development, financial capabilities and varying degrees of import dependence on those products.
Within the next six months, members are expected to decide on increasing the scope of the agreement to cover the production and supply of COVID-19 diagnostics and therapeutics as well.
