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WHAT TO EXPECT OUT OF  WTO MINISTERIAL CONFERENCE, NAIROBI (2015) -CREDIBLE DEVELOPMENTAL OUTCOMES?

*Long Post Ahead.

The issues of Food security, storage subsidies and peace clause are going heat up the negotiations during the World Trade Organization (WTO) 10^th Ministerial Conference scheduled during 15-18 December 2015, at the KICC in Nairobi, Kenya. India had taken a firm stand on the issues at hand stand during the previous Ministerial Conference held in 2013 at Bali, Indonesia. If India manages to get support during this ministerial conference then it will be considered as one of the major political success.

As Joseph Glitz in his book “Globalization and Its Discontents” described, globalization has reduced the sense of isolation felt in much of the developing world and has given many people in the developing countries access to knowledge well beyond the reach of the wealthiest in any country a century ago. Opening up to international trade has helped many countries grow far more quickly than they would otherwise have done. International trade helps economic development when a country’s exports drive its economic growth. Export-led growth is the centerpiece of the industrial policy that enriched much of Asia and left millions of people out there far better off. However, to a major extent, the globalization or international free trade failed to streamline the agricultural exports from the developing countries. For many people in the developing countries, working in the factory is a much better option than staying down on the farm and growing crops which do not get the optimum price in market. Because of the artificial scarcity, farm produce get an escalated price, however, hardly any of those benefits reach directly to the farmer as they had already sold their produce to the agents at a low price. The number of farmers’ suicide in the developing world has gone up over the last decade as the one who feeds the world is famished himself and buried under the huge pile of debt.

Agriculture being fundamental in economic development of India; it contributes 17.95% of the gross domestic product (GDP) and constitutes 10% of the export earnings. This means that India stands to gain significantly from the positive outcomes of the World Trade Organization (WTO) 10^th Ministerial Conference.

Agriculture is the art and business of cultivating soil, producing crops and raising livestock. India in general is an agricultural based economy with many countries relying on agriculture for subsistence and as their main source of income. Few years back, India was among the category countries whose economy largely relies on agriculture compared to other sectors. However, over the period of time, agricultural contribution to GDP has consistently declined from 51% to current 17.95% (Source: Planning Commission, Government of India). The major factors responsible for this decline are poor market scenario for farm produce, rise of the service sector and industrial development in India.

Development of the developing countries by creating better and more opportunities has been the objective of WTO. However, twenty years since the formation of WTO, all we have experienced are the broken promises as the global trade rules tend to make developed countries more developed. In spite of the strengthened voices raised by some of the developing countries, developed countries have grown more aggressive. It appears “to ‘take’ from and not to ‘give’ to developing countries” is an agenda of the developed world.

In India, according to the Cotton Textiles Export Promotion Council (Texprocil), textile and clothing export was $41.4 bn in 2014-15 as against $39.3 bn in 2013-14. While according to the Three Year Export Statement of APEDA Products, the agriculture export for the preceding three years was $21.73bn in 2012-13, $22.72 bn in 2013-14 and $21.51 bn in 2014-15. Agriculture plays a vital role in India’s economy since more than 58% of the rural households depend on agriculture as their principal means of livelihood. Thus, if rightfully promoted, the agriculture sector holds phenomenal potential for holistic rural development while enhancing the foreign exchange for India. What we require is a level playing field!

Furthermore, there has always been a highly contentious issue concerning Geographical Indications in the TRIPS Agreement is the hierarchy in the level of protection between ‘wines and spirits’ and the ‘other products’. Many member countries have been demanding resolution to this hierarchy by removing the restrictions imposed by Article 23 of TRIPS on wines and spirits. Interestingly, member countries opposing the demand for GI extension agree that there is no rational basis to the said hierarchy.

All products are covered by Article 22, which defines a standard level of protection. This says geographical indications have to be protected in order to avoid misleading the public and to prevent unfair competition. Article 23 provides a higher or enhanced level of protection for geographical indications for wines and spirits (subject to a number of exceptions, they have to be protected even if misuse would not cause the public to be misled). A number of countries want to extend this level of protection to a wide range of other products, including food and handicrafts. Since the Doha Round, there hasn’t been any significant outcome on this issue. Realizing the importance of the agriculture, food security for the developing countries like India, the negotiations in WTO Ministerial Conference cannot be concluded without “credible” developmental outcomes.