Recently, member countries of the World Trade Organization (WTO) wrapped up the Ministerial Conference’s twelfth outing (MC12) securing agreements on relaxing patent regulations to achieve global vaccine equity; ensuring food security, according subsidies to the fisheries sector and continuing moratoriums relevant to e-commerce, among others.
GS III- Indian Economy
Dimensions of the Article:
- World Trade Organization (WTO)
- Functions of WTO
- What is the WTO’s Ministerial Conference?
- Key takeaways from the 12th Ministerial Conference of the WTO
World Trade Organization (WTO)
- The World Trade Organization (WTO) is an intergovernmental organization that is concerned with the regulation of international trade between nations.
- It is the largest international economic organization in the world.
- The headquarters of the World Trade Organization is in Geneva, Switzerland.
- The WTO deals with regulation of trade in goods, services and intellectual property between participating countries by providing a framework for negotiating trade agreements and a dispute resolution process aimed at enforcing participants’ adherence to WTO agreements, which are signed by representatives of member governments.
- The WTO prohibits discrimination between trading partners, but provides exceptions for environmental protection, national security, and other important goals.
- Trade-related disputes are resolved by independent judges at the WTO through a dispute resolution process.
- The WTO has 164 members (including European Union) and 23 observer governments (like Iran, Iraq, Bhutan, Libya etc.)
- India is a founder member of the 1947 GATT and its successor, the WTO.
Functions of WTO
- Trade negotiations: The WTO agreements cover goods, services and intellectual property. They spell out the principles of liberalization, and the permitted exceptions. They set procedures for settling disputes.
- Implementation and monitoring: WTO agreements require governments to make their trade policies transparent by notifying the WTO about laws in force and measures adopted. Various WTO councils and committees seek to ensure that these requirements are being followed and that WTO agreements are being properly implemented.
- Dispute settlement: The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly.
- Building trade capacity: WTO agreements contain special provision for developing countries, including longer time periods to implement agreements and commitments, measures to increase their trading opportunities, and support to help them build their trade capacity, to handle disputes and to implement technical standards.
- Outreach: The WTO maintains regular dialogue with non-governmental organizations, parliamentarians, other international organizations, the media and the general public on various aspects of the WTO and the ongoing Doha negotiations, with the aim of enhancing cooperation and increasing awareness of WTO activities.
What is the WTO’s Ministerial Conference?
- The MC is at the very top of WTO’s organisational chart.
- It meets once every two years and can take decisions on all matters under any multilateral trade agreement.
- Unlike other organisations, such as the International Monetary Fund or World Bank, WTO does not delegate power to a board of directors or an organisational chief.
- All decisions at the WTO are made collectively and through consensus among member countries at varied councils and committees.
- This year’s conference took place in Geneva, Switzerland.
Key takeaways from the 12th Ministerial Conference of the WTO:
Curtailing harmful fishing subsidies
- The WTO passed a multilateral agreement that would curb ‘harmful’ subsidies on illegal, unreported and unregulated fishing for the next four years, to better protect global fish stocks.
- Since 2001, member states have been negotiating the banning of subsidies that promote overfishing.
- The current agreement, which establishes new trading rules, is the second multilateral agreement in WTO’s history.
- India and other developing countries were able to win some concessions in this agreement.
- They successfully lobbied to remove a section of the proposal that would threaten some subsidies which would assist small-scale artisanal fishing.
- Critics argued that this agreement would only restrict and not eradicate subsidies on illegal fishing.
Global Food Security
- Members agreed to a binding decision to exempt food purchased by the UN’s World Food Programme (WFP) for humanitarian purposes, from any export restrictions.
- In light of the global food shortages and rising prices caused by the war between Ukraine and Russia, the group’s members issued a declaration on the importance of trade in global food security and that they would avoid bans on food exports.
- However, countries would be allowed to restrict food supplies to ensure domestic food security needs.
- India’s key demand to allow it to export food from its public stockholdings to other countries will reportedly be discussed in the next Ministerial Conference in 2023.
- During the MC12 session, India has asked the WTO to review the extension of the moratorium on custom duties on e-commerce transactions, which include digitally-traded goods and services
- From 2017-2020, developing countries lost a potential tariff revenue of around $50 billion on imports from only 49 digital products.
- WTO members had first agreed to not impose custom duties on electronic transmissions in 1998, when the internet was still relatively new. The moratorium has been periodically extended since then.
Covid-19 vaccine production
- WTO members agreed to temporarily waive intellectual property patents on Covid-19 vaccines without the consent of the patent holder for 5 years, so that they can more easily manufacture them domestically.
- The current agreement is a watered down version of the original proposal made by India and South Africa in 2020.
- They had wanted broader intellectual property waivers on vaccines, treatments and tests.
- Rich pharmaceutical companies had strongly opposed this, arguing that IP’s do not restrict access to Covid vaccines and that the removal of patent protections gives researchers that quickly produced life saving vaccines.
- The waiver agreed by the WTO was criticized by advocacy groups for being narrow in scope, as it did not cover all medical tools like diagnostics and treatments.
- The agreements passed by the WTO come after an intense week of negotiations.
-Source: The Hindu, Indian Express