The World Trade Organization (WTO) early on Friday adopted a set of landmark trade deals and consensus on rules as part of its 12th Ministerial Conference (MC12) involving hundreds of trade ministers of various nations. The body is a 164-nation multilateral organization to set the common ground rules for international trade.
The deal is significant for two reasons. First, since it is the first major global trade deal since 2017 at the forum, reconciling disparate stances by a cross-section of countries. Second, given that the WTO makes its rules based on consensus and unanimity, even a single country's veto could have held these the deal hostage.
While the MC12 was scheduled to last for four days in Geneva, Switzerland, co-hosted by Kazakhstan, starting June 12. It extended by another day, with negotiations lasting way into the morning of the sixth day, on June 17. Trade representatives of the United States, United Kingdom, India, China and Canada attended, among others.
The agreements included intellectual property governing the manufacture and export of vaccine to combat COVID-19, the levy of customs duty on digital products, the scaling back of subsidies on fishing and food security.
Indian Union Minister for Commerce Piyush Goyal was part of the negotiations, with India making having a disproportionate say on several issue. India has maintained that its disagreement on commerce rules was to safeguard the interest of developing countries globally.
Here's five things to know about the agreement.
1. COVID-19 vaccine intellectual properties
The WTO agreed to a patent waiver where "eligible members" could produce and supply patents for vaccine without the patent holder's consent for five. It may be produced, even for export, to ensure greater access to vaccines to curb the COVID-19 pandemic.
All developing countries are eligible members, except China, who has voluntarily opted out of the waiver on the insistence of the United States. Developing countries with significant vaccine development capabilities have also been encouraged to opt out of the waiver.
India had insisted on the waiver, who along with South Africa struck a deal with advanced economies: the United States and the European Union, who have significant pharmaceutical industries.
The compromise from the Indian side were that only vaccines were included in the waiver, with India demanding that COVID-19 diagnostics and treatments also be included, as the pandemic had already run its course for only vaccines to be .
However, the inclusion of COVID-19 therapeutics and diagnostics can be brought up for inclusion in the waiver in six months.
2. Preventing future pandemics
The countries assessed the implications of the COVID-19 pandemic through the Ministerial Declaration of WTO on the COVID-19 pandemic, and agreed to prevent future pandemics.
This meant that they agreed to grater information sharing, ensuring that emergency trade measures were equitable and more cooperations on vaccines.
3. Customs on digital products
Members have agreed to maintain a status quo that no customs duty would be levied on the international flow of digital products like music, data, media, software, digital books and journals and video games or similar e-commerce till March 31, 2024.
This moratorium has been in place since 1998. The next MC - MC13 - is slated to take place by December 31, 2023, where a decision to extend this further could be taken.
India wanted this imposition, with Goyal reportedly stating that while products handlooms and artisanal products by small industries were subject to customs, digital products by big tech companies were not. He said that developing countries were losing out on nearly $15 billion in customs.
Developed countries, specifically the United States, wanted the status quo to be maintained.
3. Food security
A significant number are facing a increase in their food prices in the wake of the Russian war in Ukraine, with developed countries like the United Kingdom facing a cost of living crisis to India seeing substantial food inflation.
At the WTO, while countries were permitted to ensure their own food security, they agreed to let flows of food to the United Nations Food Program (UNFP) be exempt from food export restrictions they place locally.
For instance, to curb rising prices in food, Malaysia banned chicken and poultry exports, only to be eased partially after Singapore complained against it. Indonesia banned palm oil export, which was later ended. Similarly, India banned the export of wheat.
4. Fishing subsidies
All countries agreed to scrap any subsidies towards vessels or companies indulging in overfishing and unregulated or unreported fishing to curb the global fish population.
However, a subsidy may be granted to rebuild a fish stock to biologically sustainable levels.
Further, developing countries are exempt from this provision for two years.
The talks on subsidies with respect to fishing has been going on for the past 21 years. Developing countries saw these subsides as key to permit industrial-scale fishing in their waters and to keep it competitive.
India wanted the subsidies to remain. In 2021, when the trade ministers of WTO members met virtually, Goyal was quoted saying that this would be unfair towards developing countries but not affect the developed world, calling this measure "unequal, unjust and unfair."
A member can take its own call on what constitutes unfair and overfishing report to the WTO on existing fishing subsidies.
The declarations by the WTO can be found here.
Also Read: Explained: As Indian Deposits In Swiss Banks Rise 50%, Is It Black Money?