The indefinite postponement of the 12th Ministerial Conference of the World Trade Organisation (WTO) is a setback for developing countries as critical issues that affect them are hanging in the balance. The Global South, including India, have major stakes in WTO foundational reforms on special and differentiated treatment (S&DT) of developing countries, public procurement for food security, a patent waiver proposal floated by India and South Africa when a new variant, Omicron, is fast spreading and there is inequity in the access to vaccines in low-income countries. However, all will not be if lost these countries use this interregnum to stay united and strengthen their negotiating positions.

Developing countries are concerned that developed nations are pushing proposals on WTO reforms which dilute provisions on S&DT, besides trade and environment linkages, dispute monitoring, inclusion of plurilaterals or agreements between few like-minded members to negotiate over particular issues and ending the system of consensus for every decision that must be made. S&DT allows developing and poor countries to enjoy benefits, including longer time periods for implementing agreements and binding commitments.

India has indicated that it will fight for preserving S&DT for the developing world. "S&DT is a fundamental principle that needs to be retained. Along with that we need to maintain the policy space that developing countries need... that India as a developing country needs,” stated Shyamal Mishra, Joint Secretary, Commerce Ministry, at a discussion organized by the think-tank Research and Information
System for Developing Countries.

Rich-poor divide

At a different function, India's Commerce Minister Piyush Goyal forcefully articulated that to deprive countries having low per capita income of $600-3,000 from differentiated treatment and placing them alongside those having $60,000–80,000 per capita income as “grossly unfair”.

One major battleground for S&DT is over WTO’s efforts to eliminate subsidies for illegal, unreported and unregulated fishing and to prohibit certain forms of fisheries subsidies that contribute to overcapacity and overfishing. Global fisheries subsidies, amounting to an estimated $34.5 billion, contributed to the over-exploitation of 34 percent of the global stocks of fish, endangering coastal fishing communities in the developing world.

In the Eastern Indian Ocean, 31.4 percent of the stock was over-exploited. Over 20 varieties of fish have reportedly disappeared off the coastal waters of Andhra Pradesh, leading to an exodus of fishermen. 

Protests by Pakistani fishermen

Both the Arabian Sea and the Bay of Bengal harbour migratory as well as straddling fish stocks such as tuna and tuna-like species, sharks and mackerels, which India - and countries of South Asia - cannot harvest due to their handicap in deep-sea fishing. These waters have seen the presence of highly subsidized distant water fishing fleets of China that has triggered protests of late even by Pakistani fishermen in the Gwadar region. To make up its capability deficit, India has added around 832 vessels under the Blue Revolution Scheme till 2019-20, according to the Handbook of Fisheries Statistics 2020 brought by the Department of Fisheries, Ministry of Fisheries, Animal Husbandry & Dairying.

Overfishing by highly subsidized distant water fishing fleets threaten the low-income countries that depend on fish for food sovereignty, hurting livelihoods of the fisherfolk of this region like India, Sri Lanka, Bangladesh and Pakistan. To bring the right balance and fairness to the WTO draft agreement, India has forcefully argued that big subsidy providers – Japan, Spain, China, South Korea, the US among others -- who provide massive state funding for distant water fishing that lower cost of fuel and vessel construction to take greater responsibilities to first reduce their subsidies and fishing capacities in accordance with the principles of “polluter pays”.

China too guilty

China’s subsidies are $7.2 billion, of which 81 percent are capacity-enhancing subsidies that contribute to overfishing. India’s subsidies are $277 million according to researchers led by U. Rashid Sumaila of the University of British Columbia.

On the S&DT front, although the WTO draft mentions that that subsidy granted or maintained by developing country members, including LDC members, for low income, resource-poor and livelihood fishing or fishing related activities up to 12 nautical miles measured from the baselines shall be exempt, the problem is more with fishing in the Exclusive Economic Zones.

WTO mentions that developing countries may grant or maintain subsidies for fishing within their EEZ for a maximum number of unspecified years. India’s stance is that developing countries that are not engaged in distant water fishing be exempted from subsidy prohibitions for 25 years.

All eyes will therefore be on whether the developing countries are able to secure a more balanced and equitable WTO agreement – when the ministerial does reconvene in Geneva -- on reducing global fisheries subsidies. The efforts by the developed countries to dilute S&DT must be resisted. 

India is taking the lead in firmly articulating the stance of developing countries while making concrete proposals to strengthen a rules-based multilateral trading organization and ensure that WTO remains relevant to the orderly functioning of global trade.

(The writer is an economics and business commentator based in New Delhi. The views are personal. He may be contacted at nchandramohan@rediffmail.com)