WTO Ministerial Conference 2017 Exam Study Notes

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WTO Ministerial Conference 2017 Exam Study Notes

WTO Ministerial Conference

Introduction

  • THE 11th biennial conference of WTO (World Trade Organization) was held at Buenos Aires, Argentina.
  • The Ministerial Conference of WTO is attended by the trade and commerce ministers and other senior officials of the 164 member nations of WTO.
  • It is held once in every two years as per the Marrakesh Agreement.
  • The last Ministerial Conference was held in December 2015, in Nairobi, Kenya.

Highlights of the Conference

  • The Ministerial Conference is the topmost decision-making body of the WTO.
  • The 164 member nations led by India, China and South Africa, demand that the final declaration of the conference should preserve multilateralism and rule-based trading system.
  • There are different views amongst the WTO members on various issues, especially in the Doha Round negotiations.

Doha Round?

  • The Doha Round had started in 2001 in Doha with the development agenda to improve the trading prospects of the developing nations.
  • The Doha Development Agenda include those issues which would prove to be beneficial for the developing countries if this discussion is carried forward and some conclusion is met.
  • But the developed countries do not want this Doha Round to proceed as it would give an edge to the developing countries.
  • The developed countries want the so-called “21st Century trade issues” to be focussed at. These issues include e-commerce, trade facilitation and matters relating to small firms and gender equality.
  • The developing countries are against the new issue being introduced in the Doha Round. They feel that first the ongoing issues like food security should be resolved and then these issues could be discussed in the aftermath.

India’s concerns

  • India has made a firm stand in the Ministerial Conference on issues related to e-commerce, trade facilitation and the proposed norms regarding participation of small firms in the global marketplace.
  • A majority of countries are in support of India.
  • India has the following concerns:

1) Public Distribution System (PDS) and Peace Clause

  • India said that it will not accept the permanent solution because it will make it difficult for the Government of India and other developing countries to meet the food security demands of their people. India needs to give MSP (Minimum Support Price) to its farmers to keep ongoing the PDS.

2) Reaffirmation of Doha Development Agenda

  • According to India, the developed nations are trying to deflect the attention from the Doha Development Agenda to these new “21st-century trade issues”
  • Basically, unity is seen among the developing countries. They are putting pressure on the developed countries due to which they have now resorted to tactical means.
  • India’s GDP is $2 million. India and China have great GDPs and hence they should not be entitled to the exemptions given to the other developing countries like Bangladesh, Myanmar, Bhutan, Maldives etc.
  • India stated that exemptions should be based on GDP per capita instead of aggregate GDP figures as the population in India is very high.
  • Therefore India basically demands special and differential treatment for developing countries including both India and China as well.

3) Rule-based multilateral trading system

  • India stated that the basic idea behind the multilateral trading system was that it would be governed by rules.
  • India urged WTO to give emphasis on the importance of rule-based multilateral trading system since recently developed countries like USA are following the policy of protectionism and bilateralism.
  • There has been a delay in the appointment of the new members of the WTO’s appellate body. This would lead to more pending cases and would tamper the dignity of WTO as it deals with dispute resolutions.

4) India’s proposal for trade facilitation in services

  • India has proposed trade facilitation of goods and services. The liberalization of the rules on the movement of professionals and skilled workers across borders for temporary work projects would give an edge to the employees of the service sectors.

e) Asymmetry in form subsidy norms

  • There is WTO’s AoA (Agreement on Agriculture) for agriculture domestic support.
  • It provides flexibility to the developed countries to provide subsidies and to concentrate these subsidies to few products. This is the most-distorting form of farm subsidies known as the AMS (Aggregate Measurement of Support).
  • Developed countries have more than 90% of these AMS entitlements amounting to $160 billion, whereas the developing nations do not have these entitlements. The developed nations adopt tactical measures to destroy the agricultural sector of the developing countries by giving subsidies on selected items.
  • This asymmetry in the flexibilities given should be addressed first through a post-meeting work programme without shifting the burden of reduction of agricultural subsidies to the developing countries.
  • India can agree to work in future on the issue of limiting harmful fisheries subsidies and come up with a solution by the Ministerial Conference of 2019.
  • Harmful fisheries subsidies are being given which are destroying the ecology. The fishes are caught in such large numbers that it leads to the extinction of fishes or the fishes becoming critically endangered.
  • India will work for this issue by 2019 provided it preserves the policy space for the developing countries as there are millions of people who depend on traditional fishing activity for their livelihood.
  • The policy space is shrinking for domestic governments. Due to globalization, municipal committee level issues which can be addressed in a much better way at the local level, are being discussed globally in such global ministerial conferences.

World Trade Organization (WTO) 

  • It is an organization which deals with international trade which includes selling and buying of goods and services between the countries.
  • International trade is advantageous and is good for overall welfare.
  • It was introduced with the conclusion of the Marrakesh Agreement, 1994.
  • It came into existence on 1 January 1995, with a membership of 128 countries.
  • It is a member-driven institution. The responsibility of negotiating and implementing agreements and implementing the decisions taken in the Ministerial Conference lies with the members themselves. There is no executive body in WTO.
  • There is only a small Secretariat headquartered in Geneva and headed by a Director General.
  • It emphasises on the creation of a global free trade environment among the member countries.

Reasons for the formation of WTO

  • By 1970s countries started using more and more non-tariff barriers and there was no such organization to deal with non-tariff barriers.
  • Developed countries started having comparative advantage in trade of services.
  • Developing countries wanted agriculture and textile to be included within the scope of international trade.

Objectives of WTO

  • To help to remove barriers to the International Trade Agreement with the member nations.
  • To achieve global economic development through optimum utilization of resources.
  • To increase market share of developing countries through assistance in their development efforts.
  • To follow a non-discriminatory policy for all member countries.
  • To act as a dispute settlement machinery as and when disputes arise between member nations.

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