WTO Mini-Ministerial Meeting- What Should be Expectation Profile?

March 21, 2018: The mini-ministerial informal meeting of close to 50 countries is being held in New Delhi. This is an initiative of the Indian government to garner support for its agenda of focusing on matters that are pending solutions at the multilateral body rather than taking up new issues.

Last year’s meeting of the WTO at Buenos Aires was a washout primarily because a number of new issues were suggested for negotiations like e-commerce, SMEs, investment facilitation, women empowerment and the list goes on. The stand taken by India was to address the problems faced by farmers and fishermen stemming out from the WTO rules on trade facilitation, such as quantum of subsidies, threshold limit for granting subsidies etc . The developed world led by the US had their own agenda to push through. Indeed, India got some support from some developing countries, particularly African countries.

Ever since, WTO has been in turmoil mainly triggered by the US’s stiff stand on Buy America or America First. India is not the only country, which attracted the wrath of the US. It had named 17 countries including India, EU, China, Russia etc which are in the hit list and evolving its punitive steps to increase the import duty on import from these countries. Initially, trade experts thought the axe had fallen only on steel and aluminum, two important products that the US imported mainly from China, Japan and South Korea. Japan, Mexico and Australia were taken off the hit list because they are allies, part of NATO agreemnt, though for all practical purpose it is not as strong as it was during the cold war days.

There is a strong lobby in the US, which are against the imposition of higher duty on steel and aluminum, because their manufacturing industries very much dependent on steel and aluminum imports. GE, Boeing and some of the defense equipment manufacturers are the ones who are taking cudgels against the imposition of the duty.

It is also true that there is a strong lobby of pharmaceuticals and medical device industries, who are lobbying hard to take retaliatory actions against countries like India. Their grouse is that Indian laws on intellectual property rights governing these sectors are heavily loaded against the US business interests. The recent capping of stent prices, compulsory licensing, reluctance on the part of the India to approve incremental innovation etc. had not gone well with the US pharmaceutical lobby. It is reported that they are strongly behind the Trump administration to pursue protectionist policies.

The WTO has come out openly against the US unilateral stand on trade matters when its director general Roberto Azevedo has said at the day one of the mini ministerial meeting in Delhi that the dispute settlement mechanism of WTO would be compromised if countries continue to take unilateral decisions to protect their trade interests. It is not the first time multilateral bodies like WTO had come under severe stress. Unilateral decisions were taken earlier also. But, world political leadership had brought some order either by cajoling the erring parties or allowing the differences to sink on its own after sometime. Will it happen this time as well is the being debated over.

That said, to expect a lot from the New Delhi mini-ministerial meeting, which is reported to be attending by over 50 countries or so, will be bit too much since one does not even know the names of countries participating. The Modi administration, which used to demonstrate great alert to put in public domain even trivial things and to lap them up, is seemingly silent on what is happening inside the close door meetings. Yet, engaging contracting parties of WTO across the table to discuss and negotiate can help in evolving new approaches to resolve the trade issues of complex nature.

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