WTO Threats to India’s Sovereignty and Social Justice: Mounting Dangers for Agriculture, Food Security, Health and Education

“In a victory for the US and EU, which have been pushing for a new path forward for the WTO, trade ministers from its 162 member countries meeting in Nairobi on Saturday failed to “reaffirm” the Doha Round for the first time since it was launched amid great fanfare in 2001. They also opened the door to the discussion of new issues at the WTO such as the digital economy and investment” – Financial Times (New York), 19 December 2015

The WTO talks at Nairobi have ended. India’s chief negotiator, commerce minister, Nirmala Sitharaman has gone on record to admit that India is “thoroughly disappointed” with the outcome of the talks. India and other developing and least developed countries (LDCs) expressed their ‘explicit disagreement’ on the virtual junking of the Doha Development Agenda . And yet, despite the stated disappointment and ‘disagreement’, the final deal was signed and endorsed by India. Despite the Modi government’s tall talk of ’56 inch chests’ and ‘India’s growing image and power’ in the global space as a result of Modi’s frequent foreign visits, India was silenced and forced to accept a BAD deal at Nairobi – a deal which compromises its policy space and its economic sovereignty.

The ‘roaring mouse’ phenomenon: The politics of much ‘protest’ and systematic surrender by India

Whether it is the climate change talks, or the WTO negotiations, the simple fact is that developing countries such as India can extract positive outcomes if and only if they forge strong and united fronts with other developing countries. At Nairobi, Nirmala Sitharaman and India chose to do exactly the opposite. They broke ranks with those who should have been allies, such as other countries of the ‘Global south’. Instead, they entered into closed negotiations with the US, the EU, Brazil and China to finalise and formalise the Nairobi agreement, knowing full well that the composition and format of this group was heavily loaded against India. The inevitable followed: India buckled down after much ‘roaring’ and ‘protest’, and conceded ground to US-EU bullying on several fronts. India and the Modi government neither sought an amendment to the disastrous Nairobi agreement, nor blocked it. The impacts of this surrender will be acutely felt by future Indian negotiators at the WTO, as several observers have noted. Subsequently, to placate the domestic protests in India, Sitharaman pretended to be ‘disappointed’ after virtually having given up even trying to defend India’s interests. As one negotiator told the website The News Minute:  “It looks like India has borrowed a page from Mother Teresa – give, give, give, till it hurts”.

What exactly happened at Nairobi?

• Junking of the agenda of the “Doha Development Round”: The Doha Development Agenda (DDA), has been the only negotiating platform to discuss the concerns of developing countries, particularly with reference to agriculture and farm subsidies. In a sense, DDA was not merely a set of issues but more of a set of negotiating principles and a framework for taking the issues forward. At Nairobi, the DDA has virtually been junked. Thus, from now on, the absence of the DDA framework will make it harder for the Indian negotiators to drive a hard bargain on export competition, market access, public stockholding or the Special Safeguard Mechanism. This is such a huge setback that even Nirmala Sitharaman has been forced to concede and admit its seriousness.
• Opening the doors to contentious “new issues”: In the Nairobi declaration, there is an explicit mention of bringing in “new issues” such as investment, global value chains, competition policy, labour standards, environment, and so on into the future WTO talks. This inclusion has strongly been opposed by developing countries from the start, and was unfortunately suddenly conceded by India on the very last day. This is yet another huge surrender, and in future these “new” issues can and will be used by the US-EU as a major bargaining chip against India.
• No progress on key agricultural concerns such as Food Security and PDS: One of India’s prime concerns clearly should have been defending its right to have a Food Security system in place, complete with a Public Distribution System and Public Stockholding Of Commodities, domestic subsidies to farmers, procurement of crop by the State at a minimum support price etc. This has been frowned upon by the US, even though the US itself heavily subsidises its own farmers! At Nairobi, there has been NO progress in this regard. In other words, India could not extract a permanent guarantee that it has the right to continue with various food security schemes. Neither was there any final and binding agreement on the right of poorer countries to have Special Safeguard Mechanisms (SSM) in order to protect domestic farmers from foreign imports, safeguards that ironically happily exist in the US and other developed nations!

On the other hand, the inclusion of “new” issues has only provided with the US-EU with yet another fresh bargaining chip to use against India whenever crucial issues to defend our Public Distribution System (PDS) are brought up. India surrendered its only bargaining chip by agreeing to the Trade Facilitation Agreement (in which the US was keenly interested) unilaterally, without asking for a quid pro quo in terms of a permanent solution to our public stockholding programme. In other words, India did not even use all legal procedures possible to defend common Indians’ rights!

• Reality of the much trumpeted ‘Declaration’ on elimination of export subsidies in agriculture: Desperate to claim that the poor and developing countries had indeed ‘achieved’ something out the Nairobi agreement, much is being made of elimination of export subsidies in agriculture provided by the developed countries. The fact of the matter is that this has been agreed in principle since 2005, and is thus NOT an ‘achievement’ of the Nairobi agreement. Further, as an expert has pointed out: “…this [removal of export subsidy] will not apply to “processed products and dairy products for the Members who have notified export subsidies for such products or categories of products in their latest notification on export subsidies to the Committee on Agriculture”. It is the processed products and dairy products from the US and EU that are increasingly penetrating into the markets of developing countries and devastating local food industries.” Secondly, the domestic subsidies in ‘production’ and ‘agriculture’ (in contrast to export subsidies) provided by developed nations to their farmers is far far higher, and far more “trade distorting”, to use WTO’s own language. For example, the 2014 US farm legislation has been shown to most likely result in subsidies in excess of the country’s current WTO commitments and well beyond the commitments negotiated in the Doha Round. Yet, NO negotiations have happened in this regard! US and EU farmers and animals continue to receive far higher subsidies than their Indian counterparts, and Nairobi was the first WTO meet since Doha where this issue was not even brought up for discussion by India or any other concerned nation.
• Decision on cotton exports: At Nairobi, it was decided that cotton from lesser developed countries would be given duty-free and quota-free access to the markets of developed countries. But, there is NO change in the current scheme of massive subsidies which the US provides its cotton farmers, by far the greatest source of “trade distortion”. US cotton subsidies $1.5 billion per year will simply continue, thus increasing US exports and suppressing cotton prices.
• Danger still lurking over inclusion of education under GATS: At Nairobi, given the range and complexity of the issues around agriculture, it was decided at the beginning of the meeting that NO other issue except agriculture would be on the agenda. GATS, NAMA (non-agricultural market access) and TRIPS were kept aside. Therefore, the issue of including education under GATS was not discussed for the time being.

In other words, the Nairobi talks were just another tragic display of how the Modi government failed to protect and defend Indian farmers. The Indian delegation simply capitulated – not even resorting to basic minimum of demanding amendments or blocking the agreement, tactics which have been employed in the past!

After this disastrous meeting, the Modi government has to be held responsible for the several acts of commission and omission which led to the surrender to US-EU interests. What has been lost is not just farmers’ rights and India’s negotiating space at the WTO, but the massively damaged unity with G-90 and the Global South.

History and Politics of the WTO

What happened at Nairobi is indeed a sad reiteration of the larger history and politics of the WTO. It has been a platform controlled in many ways by the powers, influences and interests of the US-EU. It is indeed a platform designed as a tool to further economic imperialism and control over third-world economies. In the name of ensuring “free trade” and “removing trade distortions”, the WTO merely uses these as excuses to prevent the poorer nations from protecting themselves. In other words, so-called ‘trade distortions’ such as subsidies are fine, according to those dictating terms at the WTO, as long as the US-EU indulges in these tactics. The only way, if any, to circumvent the use of the WTO as a imperial tool has been for poorer countries to come together as a block and stick firmly together to protect their combined interests. When they fail to do so, as India did at Nairobi, the results are visible for everyone to see.

The US and other developed countries are adept at adopting multiple strategies. Their latest strategy is to enter into “regional trade agreements” (RTAs like Trans Pacific Partnership (TPP) and Trans Atlantic Trade and Investment Partnership (TTIP))  on specific issues with individual countries or small groups of countries, rather than at the WTO table. The reason is simple. They want to undermine the collective influence of the Global South, and to weaken the latter’s negotiating power by preventing collective negotiations and bargaining.  By entering into these regional trade agreements, where the scope of issues on the table is also undoubtedly smaller, the US-EU hope to use their power and influence to extract concessions without room for any quid pro quo.  The undermining of the Doha Agreement at Nairobi is part of this US-EU strategy.

In the days to come, the full impact of the Modi government’s surrender at Nairobi will be felt by Indian farmers and people at large. At the very least, the government should be asked to immediately prepare a White Paper on the WTO negotiations and on the various free trade agreements (FTAs) signed.