Amidst media hype, the 13th biennial ministerial meeting of the World Trade Organisation (WTO) ended without significant accomplishment. The WTO member countries could not agree on how to solve several issues staring at the international community. First is whether countries have the right to purchase, stockpile, and distribute food to their citizens in need. Also known as the public stockholding (PSH) programme, while this is the sovereign right of countries, the WTO rules throw a spanner in the works.
One of the central objectives of the WTO is to cut trade-distorting domestic subsidies. There are limits to the subsidies a country can provide, such as minimum support price (MSP). The WTO rules provide that this price support will be assessed using an average price of the base years 1986-88, which is more than three-and-a-half-decades old. It thus becomes challenging for countries like India to pursue PSH programmes using the instrumentality of MSP. This issue is significant as the farmers of Punjab have hit the streets again demanding a legal guarantee to MSP.
While countries agreed upon a peace clause in 2013, which provides some legal immunity to India’s MSP policy, it is insufficient. Conscious of this, India has been negotiating hard for a permanent solution. But the recent ministerial meet came a cropper on this. It seems the US and other agricultural exporting nations, also known as the Cairns group, have, again, succeeded in blocking any meaningful movement on this issue. India must continue striving for the PSH solution. But it will also have to think of new ways to support farmers, such as augmenting existing income support schemes like the Pradhan Mantri Kisan Samman Nidhi that are WTO-compatible.
The next important issue on which the ministerial failed is regulating subsidies given by the industrialised world to their industrial shipping fleets indulging in overcapacity and over-fishing (OCOF). OCOF has led to a substantial depletion of fishing stock posing a grave threat to the marine environment. India has been demanding binding rules to rein in these subsidies, with a transition period for developing countries to implement these rules. But, once again, the richer countries prevailed by ensuring that no rules were adopted.
Another major letdown has been the failure to make any significant headway toward solving the crisis affecting the dispute settlement mechanism (DSM). Hailed as a feather in the WTO’s cap, the DSM has been paralysed since 2019 due to the US blocking the appointment of the members to the Appellate Body (AB) — the second tier of the two-tier DSM. While WTO member countries have reiterated their commitment to having a well-functioning DSM by the end of 2024, the writing on the wall is clear. The US will not allow the restoration of the AB as it existed till 2019.
The most significant proof of this is how the developed countries led informal and non-transparent negotiations on dispute settlement last year. Perplexingly, the talks focussed, not on the dysfunctionality of the AB, but on other issues that perhaps don’t need critical attention.
India, one of those demanding the restoration of the body, must understand the US game plan — the de-judicialisation of trade multilateralism. The WTO was created when the neoliberal consensus emerged after the Cold War and the collapse of communism. This period saw not just the legalisation of international relations (countries subjecting themselves to international law) but also its judicialisation (the expansion of international courts and tribunals that dominate decision-making in place of national actors). De-judicialisation, as Daniel Abebe and Tom Ginsburg define it, is the reverse phenomenon where countries weaken international courts to take back decision-making power. This is what the US seems to be doing with the WTO’s dispute settlement. It has wrested control from the AB to unilaterally respond to the geo-economic challenges that a rising China presents.
This ministerial deepened WTO’s existential crisis. It shows that trade multilateralism is beset with problems, pushing the world to higher levels of uncertainty and volatility.
The writer teaches at the Faculty of Legal Studies, South Asian University. Views are personal
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