The 13th Ministerial Conference of the World Trade Organisation (WTO) took place in Abu Dhabi, United Arab Emirates, during 26-29 February. In spite of extending its duration by an additional day, this conference failed to resolve any of the major contradictions that have thrown the WTO into crisis in recent years.
The WTO, established in 1995, is a forum for its member countries to agree on common rules governing international trade. It is expected to provide a mechanism for resolving disputes between member countries relating to their exports and imports. The Ministerial Conference is the highest decision-making body of the WTO and takes place once every two years. The Abu Dhabi conference was attended by trade and commerce ministers from 166 countries of the world.
For nearly three decades, the WTO has championed the drive of the US, other imperialist powers and their multinational companies to penetrate and dominate all markets, under the banner of trade liberalisation. There has been pressure on all member states to reduce their import duties and get rid of any bans or quantitative restrictions on imports. For instance, the average rate of import duty in India fell from 24 percent in 1996 to 6 percent in 2020. This resulted in an enormous increase in imports and the ruination of many small producers, including peasants.
The WTO has been in crisis ever since the USA, which had played a leading role in pushing the liberalisation agenda, made an about turn with respect to its position on “free trade”. In 2017, the US government started raising the rates of duty on steel, aluminium and other goods that were imported largely from China. The raising of import duties by the USA prompted China to also take similar action, targeting US imports into that country.
The trade war with China has confirmed that while US wants other countries to open their markets to US multinational companies in the name of “free trade”, it will not hesitate to take measures to prevent the monopoly capitalists of other countries from capturing the US market.
There are several issues that have remained contentious at successive WTO ministerial conferences in recent years; and no agreement was reached at Abu Dhabi as well. These include, among others, (i) policy on agricultural subsidy and public food stocks; (ii) policy on subsidy for fisheries; (ii) taxation of sales through e-commerce; and (iii) revival of the dispute resolution mechanism of the WTO.
Agriculture and Public Food Stocks
This is a longstanding issue on which there is a major contradiction between the leading imperialist countries that are major exporters of food grains and several less developed countries, including India.
According to the Agreement on Agriculture (AOA), formulated by the imperialist states in 1995, public procurement of agricultural products at state regulated prices is considered to be a distortion of the “free market” principle, and hence in violation of WTO rules. However, the massive subsidies which the US and various European states give to their agri-business companies in the form of direct cash transfers are not considered to be a distortion of free trade.
An extremely illogical and unfair provision included in the AOA is a 10 percent limit on the ratio of subsidy to output value of any agricultural product, where the subsidy is to be calculated using international prices and exchange rates which prevailed during 1986-88. On this basis, the US, Australia, Canada and the EU have been arguing that the minimum support prices (MSPs) paid to Indian farmers for wheat and rice are more than 60 percent of the output value of these crops. They have claimed that India’s public stockholding (PSH) programme is highly subsidised and the farm support that India gives is “distorting” global food prices and “hurting” food security of other countries.
Many countries, including India, have been seeking a permanent waiver of the low limit on subsidies of food grains. However, the US and other leading imperialist states have not agreed because this goes against the interests of the agri-business monopolies which are interested in penetrating and dominating the food market in all countries.
Every country has the sovereign right to have public food stocks. Without such food stocks, countries are at the mercy of global trading multinationals in food, with disastrous consequences for the people of these countries. This is what has happened with many countries of Asia and Africa following the Ukraine war.
The Indian ruling class does not want to give up the right to have public food stocks. However, defending the right to have public food stocks is being approached from the narrow viewpoint of being able to address crisis situations (as during the lockdowns in 2020 and 2021). It is motivated by the desire to avoid food riots. It is not based on commitment to ensure secure livelihood to farmers and food security for all. This is shown by the refusal of the Government of India to fulfil the demand for guaranteed public procurement of all agricultural produce in all regions of the country, at a price not below MSP.
This stand of the Government of India reflects the interests of the monopoly capitalists of our country. The monopoly capitalists want to expand their domination over trade in agricultural produce, both within the country and globally. They have contradictions with foreign multinationals involved in agricultural trade who want to capture the Indian market.
Subsidy for Fisheries
The issue of fisheries subsidies was first taken up in 2001, at the Doha Ministerial Conference. This was given a push after the adoption of the United Nations’ Sustainable Development Goals (SDGs) in 2015. Under the garb of preventing excessive fishing (fishing in excess of stock and rate of reproduction of stock), an agreement was adopted at the 12th Ministerial Conference, proposing the target of eliminating subsidies by 2020. The agreement requires acceptance by two-thirds of the WTO members to become operational. However, despite several rounds of discussion, the required acceptance could not be realised in Abu Dhabi.
There are a handful of large corporations of a few countries in the world – China, the EU, Japan, South Korea, Taiwan, Thailand and the US among them, which have large industrial fishing fleets owned by giant sized capitalist companies. The governments of such countries have extended subsidy support to their fishing industries for many years in the past. They now want to consolidate and strengthen their dominant position by imposing limits on other countries. They are pushing for various regulations in the name of preventing the depletion of fish stocks.
In India, the National Fish workers’ Forum (NFF) has been fighting for a policy that will ensure adequate government support to secure livelihood for the lakhs of poor fisher folk. In the run up to the 13th Ministerial Conference, the NFF had raised its demand that the Government of India must not agree to the proposed WTO agreement on fisheries, as that would block the path for guaranteeing secure livelihood to the fisher folk.
Customs duties on e-commerce trade
Members of the WTO had first agreed in 1998 not to impose any customs duties on electronic transactions. This served the interests of American and other e-commerce monopolies, while it deprived the importing countries of potential tax revenue. The moratorium has been periodically extended since then, for the benefit of the e-commerce monopolies.
India, alongside several other countries including South Africa, has been calling for the termination of the moratorium. The Conference failed to result in any agreement on this issue. The existing situation will continue for at least two more years, until the next Ministerial Conference in 2026.
Dispute settlement
The Dispute Settlement Body (DSB) of the WTO has been non-functional since the last four years because of continued U.S. opposition to the appointment of new judges to fill vacancies.
The US imperialists have sabotaged this function of the WTO because they do not want to follow the rules that have been imposed on all other member states. In 2018, the US invoked an exception clause, citing national security, to justify its hike in import duties on steel and aluminium. Various countries including China, Russia and India, lodged a complaint against this, which was accepted by the WTO panel. The US appealed against this decision. At the same time, it rendered the appellate body dysfunctional by refusing to consent to the appointment of new judges. This has resulted in some 30 appeals worth billions of dollars remaining unresolved.
The 13th Ministerial Conference could not resolve this issue. It could only come to an agreement that there will be a fully and well-functioning Dispute Settlement system by the end of 2024.
Conclusion
The crisis in the WTO continues. It is bound to continue because of the contradictions between imperialism and the oppressed nations and peoples, as well as the contradictions among rival imperialist states and monopoly companies.
The agenda of trade liberalisation, which was successfully pushed in the 1990s, is facing increasing resistance today. Life experience has exposed it as an agenda in the service of the most powerful imperialist states and monopoly capitalists, at the expense of poorer countries and the working peoples and small-scale producers of all countries. The claim that “free trade” will benefit all has become highly discredited.