THE CONTEXT: The WTO’s 13th Ministerial Conference (MC13) took place from 26 February to 2 March 2024 in Abu Dhabi, United Arab Emirates. Ministers from across the world attended the meeting to review the functioning of the multilateral trading system and to take action on the future work of the WTO, however, it concluded with little progress on key issues that affect global trade.
OUTCOMES:
Ministers representing WTO Members met to discuss a plethora of important topics, ranging from food security and e‑commerce to fisheries subsidies and reform of the WTO, as well as domestic regulations of services and investment facilitation.
I. Accessions: On the first day of MC13, ministers endorsed the accession to the WTO of two least-developed countries—Comoros and Timor-Leste. This brings the organization’s Membership to 166, representing 98 percent of world trade.
II. WTO reform: At MC13, ministers endorsed progress on the WTO reform process, which covers the organization’s deliberative, negotiating and dispute settlement functions.
A. Dispute settlement reform: At MC13, ministers reviewed the valuable contributions made towards fulfilling the commitment of reform. This includes a 36-page draft, setting out reforms to the WTO’s dispute settlement system.
B. Reform of the deliberative and negotiating functions: At MC13, ministers welcomed the work already undertaken to
1. improve the functioning of WTO Councils, Committees and Negotiating Groups
2. enhance the organization’s efficiency and effectiveness
3. facilitate Members’ participation in WTO work
III. E-commerce: At MC13, ministers decided to renew the e‑commerce moratorium until MC14 or 31 March 2026, whichever is earlier.
IV. TRIPS non-violation and situation complaints: The ministers decided to extend also a moratorium on so-called “non-violation” and “situation” complaints under the TRIPS Agreement.
V. Covid 19 related TRIPS waiver: At MC13, ministers took note of the work undertaken and the lack of a consensus on expanding the product scope. Accordingly, these special rules are not going to apply to compulsory licenses for the production of Covid‑19 diagnostics and therapeutics.
VI. Special and differential treatment: Ministers adopted a decision to improve the use of special and differential treatment (S&DT) provisions, particularly those in the Agreement on Technical Barriers to Trade and the Agreement on Sanitary and Phytosanitary Measures. The decision enhances training opportunities and endorses steps to make the S&DT provisions more effective and operational.
VII. Plurilateral agreements and initiatives: At MC13, Members failed to reach consensus on agriculture and food security as well as further disciplines fisheries subsidies. Plurilateral initiatives (covering less than the full Membership) are, therefore, becoming more prominent.
VIII. Fisheries subsidies: At MC13, ministers welcomed the progress over the past 20 months towards the Agreement on Fisheries Subsidies (AFS)’s entry into force. As of 1 March 2024, 71 Members have ratified the agreement. A further 39 ratifications are needed to reach the threshold of 110 for the agreement’s entry into force.
IX. Agriculture and food security: Although updating WTO disciplines on agriculture has been on the agenda of Members since 2000, little progress had been made. Prior to MC13, there appeared to be a more positive dynamic. Yet, ministers failed again to reach consensus on the scope, balance and timeline of agriculture negotiations.
ISSUES
- Shocks to global trading architecture: The world has witnessed significant shocks to the global trading architecture. It includes the ripple effects of conflicts in some parts of the world, the disruptions on critical shipment routes and recalibrations in supply chains to reduce dependence on single suppliers such as China.
- Issue of free and fair trade: There was rising hope for the 13th Ministerial Conference of WTO to deliver on its mandate amid an increasingly fractious environment for the rules of trade it seeks to enforce. However, the World Trade Organization continues to struggle to foster free and fair trade.
- Inward looking tendencies: An increasing inward-looking tendency among nations has also catalysed isolationist, tariff-heavy trade policies that is in contrast of WTO’s primary purpose of open trade for the benefit of all. The Abu Dhabi declaration does refer to some of the challenges, such as the need to ensure open, inclusive and resilient supply chains, but not much has been achieved.
- Divergence among members: Divergences between the WTO’s 164 member-countries persisted on most issues carried forward from Geneva (MC12), including areas of particular interest to India, such as a permanent solution in agriculture for public stock holding to ensure domestic food security or subsidies to the fisheries sector.
- Issue over Dispute Resolution Body: Prospects for the reform of WTO’s dispute resolution body has remained defunct for four years. With countries such as India pushing for a two-tier dispute settlement system, the ministerial meeting ended with countries deciding to have a fully and well-functioning dispute settlement system accessible to all members by the end of 2024.
- No consensus on several issues: Despite intense negotiations over five days, the 13th Ministerial Conference (MC13) of the World Trade Organization (WTO) ended without consensus on some of the key issues.
THE WAY FORWARD:
- Reformative Approach: A permanent long-term solution based on reformative approach having a rule-based order for members is the need of the hour to preserve global trade governance.
- Regular Meeting of the Members: The other long-term solutions include regular meetings of the WTO members with the Appellate body to ensure effective communication and immediate redressal mechanism. It is essential for countries to collaborate and engage in constructive dialogue to address the challenges and opportunities in the evolving global trade landscape.
- Dispute resolution Restoration: Developing countries, including India should advocate for the restoration of the WTO’s dispute settlement mechanism (DSM) to its previous functional state.
- Consensus based decision: Any discussion on WTO reforms must incorporate consensus-based decision-making. Unilateral decisions should not constitute as a means of arbitrary or unjustifiable discrimination for restriction on international trade.
- India’s role: India should actively participate in advocating for reforms in order to achieve its ambition to become a global leader in international trade. It will reflect its commitment to foster a thriving and inclusive global trade environment.
THE CONCLUSION:
The 13th ministerial meeting of the WTO grapples with the critical issue of the crippled dispute settlement mechanism (DSM), lack of consensus on key issues and many more. In this context there is an urgent need for WTO reforms with concerted efforts and global attention to ensure the fairness, transparency, and effectiveness of the multilateral trading system.
UPSC PREVIOUS YEAR QUESTIONS
MAINS PRACTICE QUESTIONS
Q. The recent WTO’s 13th Ministerial Conference has failed to reach consensus on many key issues which is reflecting serious division among the institutions and has raised questions about its relevance in today’s world. Comment.
Q. Discuss the reforms needed for the World Trade Organisation (WTO) to address challenges as WTO members fail to narrow differences on reforming dispute settlement system.
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