Business Today

India, Africa Join Hands on WTO

Will the recent bonhomie between New Delhi and African countries help poorer nations get preferential access to developed markets?
twitter-logo Joe C Mathew        Print Edition: November 22, 2015
India, Africa Join Hands on WTO
India, Africa Join Hands on WTO (Photo: Vikram Sharma)

Between December 15 and 18, World Trade Organisation (WTO) member countries will meet in Nairobi, Kenya, for its 10th ministerial conference. According to Roberto Azevedo, Director-General, WTO, the meeting "will be a milestone" for the future of the organisation for multiple reasons.

There are growing challenges from within WTO, as well as outside, that could undermine the supremacy of the multilateral trade body in negotiating global norms. Tiding over such challenges will thus be of prime importance to member countries, especially India and the African nations, with whom Delhi has just concluded the biggest ever partnership summit.

The major problem plaguing WTO from within is the increasing difficulty in decision-making. The consensus-based decision-making process followed by the organisation necessitates all 161 members - rich, poor and developing nations - to approve a decision. And there is a clear divergence among the developed and developing nations on the current round of negotiations going on since 2001. While developed countries find this round - Doha Development Agenda (DDA) or Doha round - less interesting, third world countries consider this as critical to their growth.

The Doha round was supposed to focus on helping developing countries enter global markets through reduced tariffs and preferential treatment. As part of the initiative, developed countries were supposed to work towards opening up their markets through rationalisation of agricultural subsidies and allow a level-playing marketplace for agricultural products to the poorer nations.



OBJECTIVE: Reduce distortions in agricultural trade caused by high tariffs and other trade barriers. Rationalising export subsidies and domestic support

WHY IT MATTERS: India must ensure that rationalisation of domestic support does not hamper its existing public procurement policy for foodgrain to ensure food security, or come in the way of farmers' sustenance

Non-Agricultural Market Access (NAMA)

OBJECTIVE: To cut tariffs, give flexible options to developing countries and special treatment for poor nations on 90 per cent of the world's merchandise exports

WHY IT MATTERS: Unless discussed, NAMA proposals may severely limit domestic industrialisation and job creation prospects in India

Intellectual Property and Biodiversity

OBJECTIVE: Reconcile Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement with convention on biodiversity

WHY IT MATTERS: It will prevent bio-piracy

The only issue that was of interest to the developed country block led by the US and the European Union was a Trade Facilitation Agreement that called for modernisation of ports and streamlining of customs procedures. This was approved during the last ministerial conference held in Bali, Indonesia, two years ago.

Developed countries were supposed to work towards opening up their markets and allow a level-playing marketplace for agri products from poor nations

On October 21, at a meeting of trade ministers from the African, Caribbean and Pacific Group of States in Brussels, Azevedo had made it clear that, as it stands today, "we will not be able to deliver (in Nairobi) on many of the major DDA issues such as agricultural domestic support or on market access". He had also hinted at the possibility of developed countries agreeing to take forward the pending issues in the DDA as and when WTO enters into a new round of negotiations to discuss fresh ideas. "It seems to me that all members had agreed to continue negotiations in the future on all DDA core issues, such as agriculture, market access and services. They would remain on the agenda. I think there is consensus on that. However, there is no agreement on how these negotiations should take place: whether under the present Doha framework or under some new architecture," he says.

Besides, the developed country block wants to push the poorer nations to sign a mega trade pact, the Trans Pacific Partnership, or TPP, involving the US and 11 other countries. However, several issues which are part of the TPP, including one that deals with higher intellectual property rights for medicines, have been opposed by developing countries. Trans-Atlantic Trade and Investment Partnership (TTIP), another mega trade pact between the US and European Union, is yet another example of an emerging external threat that can impact the relevance of WTO. Despite the challenges, India will have to be very clear about the position it wants to take in Nairobi.

Dumping the Doha Agenda will not be in India's interest as it has always maintained that addressing all issues in the current round of negotiations, including a permanent solution for public stock holding of grains for food security purposes, is critical not just for India, but for all developing and least developed nations.

Agreeing to more global rules and regulations that bind its trade, industry and services, will also not be in India's interest as it is looking to strengthen manufacturing by leveraging the potential of its domestic market and increased access to emerging markets that continue to grow in the midst of a global economic slowdown.

The joint press conference by African Union representative Mike Bimha (Minister of Industry and Commerce, Zimbabwe) and Commerce Minister Nirmala Sitharaman on October 23, therefore, seemed reassuring. Both sides maintained that India and the African Union are on the same page with regard to their WTO positions. If the bonhomie generated between India and 54 African countries during the summit sustains for a few more weeks, developing countries could be in a position to take a strong position in Nairobi.

The continuation of the Doha round until all core development issues are addressed is in the interest of India as well as Africa.

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