WTO agreements will shape government policy

There is plenty to ponder about the implications of the outcomes of MC12 on India. How they’ll play out over the next few years and shape government policy and negotiation stances will be important to watch

The 12th Ministerial Conference of the World Trade Organization (WTO), or MC12, raised questions about the ability of its members to arrive at decisions. Five years ago, the institution was left without a work programme as the 11th conference in Buenos Aires failed. Therefore, when MC12 arrived at a set of outcomes, the mood was one of celebration. However, it is essential to analyse the outcomes for assessing their implications for India.

The 12th Ministerial Conference of the World Trade Organization (WTO), or MC12, raised questions about the ability of its members to arrive at decisions. (file photo)

In the wake of Covid-19, India joined hands with one of its traditional allies, South Africa, to ensure access and affordability of vaccines, therapeutics, and other necessary treatment. In October 2020, the two countries tabled a proposal seeking temporary waiver from the implementation, application, and enforcement of four forms of intellectual property rights (IPRs), namely, patents, copyright, industrial designs and protection of undisclosed information or trade secrets. This proposal was co-sponsored by 63 other members and supported by almost two-thirds of WTO’s membership. Waiving of IPRs and freeing vaccines and medicines from the monopoly control of Big Pharma could facilitate vaccine production in developing countries, which would have, in turn, improved affordability of these products. The fact that over 80% of people in low-income countries are yet to receive their first vaccine shot speaks about the significance of this initiative.

This proposal was co-sponsored by 63 other members and supported by almost two-thirds of WTO members. Waiving of IPRs and freeing vaccines and medicines from the monopoly control of Big Pharma could facilitate production in developing countries, which would have, in turn, improved affordability of these products.

However, at the end of MC12, ministers did not endorse this proposal; instead, they recommended that WTO members issue compulsory licences (CLs) for increasing production of patented vaccines. Two aspects of this outcome are significant: One, there is no mention of any other form of IPR identified by the proponents of the waiver proposal, and two, therapeutics and other treatments are excluded for the time being.

It should be pointed out that it was the European Union (EU) that first proposed CLs in July 2021, countering the India-South Africa proposal. Surprisingly, this proposal was legitimised earlier this year through an informal process of consultations, involving the United States, and curiously, the two original proponents of the waiver. It is not clear why India joined the so-called Quad to effectively back the EU proposal and, in the process, undermine its own waiver proposal. The EU’s proposal was not offering any additional benefits as the 2001 Doha Declaration on the TRIPS Agreement and Public Health had agreed that WTO members can grant CLs to address public health emergencies.

Moreover, the Indian Patents Act includes a comprehensive set of provisions for granting CLs. The government’s decision seems even more strange as the NITI Aayog questioned the utility of this instrument not too long ago, saying that “Compulsory Licensing is not a very attractive option …”.

A second key issue for India was protecting the interests of the country’s small fisherfolk in the agreement on “fisheries subsidies”, seeking to limit the use of harmful forms of subsidies, threatening the sustainability of fish stocks. Negotiations on “fisheries subsidies” commenced in 2001 and India has consistently maintained that it must have the right to subsidise small fisherfolk for an extended period. MC12 finally endorsed an agreement to check subsidies that promote illegal, unreported, and unregulated (IUU) fishing and/or fishing an overfished stock. India has accepted a two-year transition period for removing these egregious subsidies. A feature of this agreement is that it does not have any explicit provisions on special and differential treatment, other than the two-year window mentioned here.

The agreement allows India to grant such subsidies as long as fishing takes place in its Exclusive Economic Zone (EEZ). The mention of EEZ is only a reiteration of the rights under the UN Convention on the Law of the Sea. The decision taken in MC12 provides that further negotiations to introduce “comprehensive disciplines” on such subsidies must be adopted within four years. How India will protect the interests of small fisherfolk of in the ensuing negotiations without any explicit provisions on Special & Differential Treatment in the agreement on “fisheries subsidies” will be key.

India should be disappointed as a permanent solution on public stockholding of food grains didn’t find a mention in the MC12 outcome document. This issue is vitally important for India must secure its rights to continue its food subsidy programme, overcoming the stipulation in the Agreement on Agriculture that subsidies cannot exceed 10% of the value of agricultural production. Another critical issue is that currently New Delhi is not allowed to export food grains from publicly held stocks. As India’s exports of food grains rise, several WTO members have sought clarification as to whether the source of these exports is publicly held stock.

But MC12 did not provide a window of opportunity to address India’s concerns. Finally, MC12 recognised that a WTO member can impose export restrictions on food grains to “ensure its domestic food security”. This is no more than old wine in a new bottle as the predecessor institution of the WTO, the General Agreement on Tariffs and Trade, allowed the imposition of such restrictions in 1948. There is plenty to ponder about the implications of the outcomes of MC12 on India. How they’ll play out over the next few years and shape government policy and negotiation stances will be important to watch.

Biswajit Dhar is professor of economics, Jawaharlal Nehru University. KM Gopakumar is senior researcher and legal adviser, Third World Network

The views expressed are personal