Buenos Aires Ministerial Conference: A Fact file

The World Trade Organization’s 11th Ministerial Conference (MC) held at Buenos Aires between 10-13 of December, ended without a Ministerial Declaration. Members failed to reach consensus on already existing major issues like public stockholding of food items and new issues like ecommerce.

This is not the first time that an MC of the WTO ending without signing a Ministerial Declaration.  There were not declarations at the Seattle (1999), Cancun (2003) and Geneva (2009) Ministerial Conferences.

Ministerial Conference is the topmost decision-making body of the 164-member WTO.  Failure at Buenos Aires comes out with a lot of implications for future trade engagements. Disagreement among members indicate the current turbulent situation in world trade. The US is campaigning actively to reshape international trade engagements for its benefit through bilateral trade engagements by surpassing multilateral forums like the WTO. On the other side, the developing countries like to use trade as a platform for development. In these conflicting interests, reaching consensus on trade issues is not going to be easy.

Though the Buenos Aires MC has not produced any outcome, still it is important from the context of future international trade engagements. Following are the main facts related to the MC.

1. The MC ended without progress on substantive issues

The WTO had already several substantive trade issues to be settled. These issues were raised in the previous MCs. A timeline on issues like public buffer stocks were on the card at Buenos Aires. But disagreement in almost all issues stopped countries to get a decision on these issues as well.

2. The main issue of public stockholding of food grains.

There was a strong positive expectation that members will come out with a final decision on public stockholding of food grains. The issue is that in the food subsidy for public stockholding of food grains is given, such subsidies should be considered as permissible subsidy. India, China and around 100 other developing countries demanded such a treatment. A strong discussion on this issue was held at Bali MC and members agreed to reach a final solution at this MC.  But at Buenos Aires, the US refused to sanction such a subsidy without stringent conditions. The issue was a prime one for developing countries including India. Hence the developing countries retaliated by opposing the demand of the US and other developed countries’ demand of making discussion on new issues like ecommerce.

In an official statement, India indirectly criticized the US position on the issue. “A major country (the U.S) stated categorically that they cannot agree to any permanent solution on the public stockholding issue at the current MC.” – the statement observed.

3. No to new issues

In the context of the lack of progress on already existing issues, developing countries opposed to make discussions on new issues like ecommerce.  New issues such as e-commerce, investment facilitation and the package for Small and Medium Enterprises etc.., were not taken for discussion. The new issues are the pets of the developed world and their allied developing country trade partners. These issues will broaden the trade agenda.

About the opposition to new issues, the official Indian press release says that: “The 53-member African Group as well as a large number of developing countries have rallied around and firmly supported us in opposing rules on e-commerce and bringing in new issues such as investment facilitation and (proposed norms on) small enterprises into the WTO’s agenda.”

4. US questioning the centrality of the development agenda within WTO

The WTO has given special consideration to the issues of the developing countries historically. But at the 11th MC, the US questioned centrality of development in WTO negotiations. The US here tried to separate trade from development and objected to mention centrality for development at the preparation of the declaration. The US stand will adversely affect the development interest of the developing world.

Later, the U.S. Trade Representative Robert Lighthizer, accused that the WTO was becoming a litigation-centered organization.

5. Strange emergence of pressure groups that may thwart multilateralism within WTO

At the Buenos Aires MC, the developed countries led by the US and the European Union tried to solve the deadlock at the WTO talks by forming large pressure groups on new issues. Here, they formed groups on e-commerce, investment facilitation and MSMEs within the WTO with more than 70 members in each group. But such a group formation within the WTO will erode the multilateral approach of the organization. The institution has the responsibility to give representation of 164 members and not to less numbered pressure groups.

India and other developing countries saws the formation of pressure groups as an attempt to take out WTO away from multilateralism.

Even there were suggestions that if there is no Ministerial Declaration, member nations may adopt separate texts on various issues based on group decisions.   On this, India declared that it is committed to preserve and promote the WTO and the multilateral trading system.

6. Positives from the Buenos Aires MC

On the positive side, the members decided to secure a deal on fisheries subsidies by the end of 2019. Discussions will continue in the next wo years regarding this. Members also pledged to improve the reporting of existing fisheries subsidy programmes.

In addition, members took several decisions, including extending the practice of not imposing customs duties on electronic transmissions for another two years. Besides the members also decided to continue negotiations in all areas including the new issues.

Indian position about the Buenos Aires outcome

India was disappointed about the failure of the MC. The country expected a final solution for the food buffer stock issue, but opposition from the US blocked it. At the same time, the country sternly resisted the developed block agenda of bringing ecommerce under the trade agenda. India stood for the defence of the multilateral trade system and opposed attempts to reduce its significance by engaging in pressure group formations within the WTO.

In its statement, Indian delegation said: “… any Ministerial Declaration must reaffirm the principles of the multilateral trading system, the completion of the Doha Development Agenda (to improve the trading prospects of developing nations), the centrality of development and the availability of special and differential treatment and other concerns of developing countries.”