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No consensus in sight ahead of December WTO summit

LiveMint logoLiveMint 09-06-2017 D. Ravi Kanth

Paris: The new US trade representative, ambassador Robert Lightizer, has described India as “a valuable, strategic and economic partner”, underlining the importance of India as a major “player” in shaping the trade agenda at the World Trade Organization (WTO), according to people familiar with the development.

During a brief one-on-one meeting with commerce minister Nirmala Sitharaman on the sidelines of the Organization of Economic Cooperation and Development (OECD) meeting in Paris on 8 June, Lightizer and Sitharaman shared their perspectives on several trade issues, including the 11th ministerial meeting of the global trade body in Buenos Aires due in December.

Trade ministers from over two dozen countries, including the US and India, sharply differed on their priorities for the Buenos Aires meeting. India said it cannot imagine any outcome at Buenos Aires without the mandated permanent solution for public stockholding programmes for food security, said several trade ministers after the meeting.

The commerce minister said an outcome on special safeguard mechanism for developing countries to curb unforeseen surges in imports of agricultural products must be finalized at the ministerial meeting for addressing continued inequities in global agricultural trade.

Indonesia, South Africa and the coordinator for ACP (Africa, Caribbean and Pacific) countries concurred with India that there must be credible outcomes on the permanent solution for public stockholding programmes for food security as well as commitments for reducing farm subsidies, the person said.

India also warned that it will not agree to commitments for reducing trade-distorting domestic agricultural subsidies, maintaining that the Doha Development Agenda mandated the industrialized countries, and not developing countries, to undertake substantial reduction commitments.

Sitharaman made it clear that any outcome on fisheries subsidies—which is being prioritized as a major deliverable for the Buenos Aires meeting—must provide enhanced special and differential flexibilities for India’s tens of millions of poor and artisanal fishermen who survive on fishing, according to a trade minister who asked not to be named.

She also flatly rejected attempts to launch negotiations on e-commerce by the European Union (EU), Japan, Korea and several other countries on grounds that it is not part of the agenda. She said India will not accept any negotiations on investment facilitation or disciplines for small and medium enterprises as proposed by major industrialized and some developing countries.

The US said it will be guided by three principles in international trade. Outcomes in global trade must remain “free, fair, and reciprocal”, Lightizer said, maintaining that there has been no consensus on the possible deliverables for the Buenos Aires meeting.

But several other trade ministers from the EU, Japan, Australia, New Zealand, Brazil, Argentina and Korea, among others, delivered an optimistic assessment about what can be accomplished at Buenos Aires. These countries pressed for outcomes on fisheries subsidies, domestic regulation in services, trade-distorting domestic support, digital trade, investment facilitation, and small and medium enterprises.

Effectively, there is no consensus on what must be accomplished at the Buenos Aires meeting in December, South African trade minister Rob Davies told Mint.

WTO director general Roberto Azevedo delivered a sombre assessment by saying that he cannot see any low-hanging fruits for harvesting in Buenos Aires.

Significantly, on a separate track, members of the OECD failed to agree to a common agenda on trade, investment, and climate change because of vehement opposition from the US, which insisted on having its language incorporated in the ministerial declaration.

Consequently, the chair for the OECD ministerial conference Anders Samuelsen, the foreign minister of Denmark, issued a statement in his own responsibility on international trade, investment and climate change which reflected the views of all other members except the US.

Samuelsen said there is “recognition that trade is an engine for economic growth, job creation and welfare, and we confirm the importance of international investment and free flow of capital.” He suggested that members, except the US, agreed to “the need to stimulate trade by focusing on reducing trade barriers and costs, without lowering international standards, including through trade facilitation and collaboration.”

Ministers attending the OECD meeting also concurred with the chair “for urgent, collective and effective action in order to address overcapacity across all affected sectors, including steel, aluminium and shipbuilding”.

Barring the US, there is near consensus among OECD members “on the importance of a strong commitment to rule-based free international trade and investment so that firms are able to compete in an open market on an international level playing field”.

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