Every two years the 164 Members of the Word Trade Organization (“WTO”) gather in a Ministerial Conference to give political direction to the world trade body and negotiate new instruments to better regulate international trade. The next meeting is scheduled to be held in Buenos Aires on 10-13 December 2017 and the agenda is yet to be decided. Over the last few months, developed and developing countries have been battling to impose their own items for the discussions. On the one hand, developed countries are pushing for discussions on new issues such as e-commerce and investment. On the other hand, developing countries led by India first wish to reach a deal on issues still under negotiation before moving on to open new discussions. The outcome of the Ministerial Conference is likely to reflect the diverging interests of WTO Members. Over the last few years, India has adopted a strong stance at the WTO and has battled to clinch a peace clause on food security at the Bali Ministerial Conference in 2013. India is expected to play hard ball on this issue in Buenos Aires but what about the other issues?
India’s stance and priorities
India has been a key player in WTO negotiations and the position taken by India is likely to influence the talks in Buenos Aires. Indeed, India has often led the discussions on behalf of the developing countries. Ahead of the Ministerial Conference, India has argued that the negotiations of the Doha Development Round should first be concluded before turning to new issues. The Doha Development Round has been ongoing since 2001 without any agreement so far. The discussions have dragged on due to the fact that “nothing will be agreed unless everything is agreed”. Two elements of the Doha Development Round are of particular interest for India: agriculture and trade in services. Over the last few months, India has been at the forefront of discussions on trade in services and even called for a trade facilitation agreement for services by submitting a proposal in February 2017. The priorities of India are clear for the upcoming WTO gathering - Circumscribe the discussions to the pending issues of the Doha Development Round and rally around the proposal on trade facilitation for services.
Developed countries including the United States and the European Union are pushing for discussions on e-commerce in Buenos Aires. India appears extremely reluctant to make any commitments on these issues as it believes that they could limit its policy space. Despite the huge discrepancy between developed and developing countries on e-commerce capacity, developing countries do not form a homogeneous group on e-commerce. China has said they are open to engage in discussions on new rules to liberalize cross-border e-commerce. While China argues the new rules should focus on the promotion and facilitation of cross-border trade in goods sold on the internet and take into account the specific needs of developing countries, India claims that the proposal supported by developed countries could provide unfair market access to foreign companies and threaten the domestic e-commerce platforms.
Important developments in the field of investment recently happened in India. In July 2016, India decided to unilaterally terminate Bilateral Investment Treaties (BITs) signed with 58 countries. Reportedly, the BITs were allowed to expire on April 1, 2017. India has been pushing for the conclusion of new BITs based on a template text providing for new provisions. The decision to negotiate new BITs has been guided by the disputes initiated by several foreign investors suing India under multiple BITs. Proposals to launch discussions on investment facilitation have been made by developed countries and several WTO Members, including China, Korea and Russia. The strategy followed by India is to negotiate investment provisions on bilateral ground and not to support any multilateral talks on investment facilitation at the WTO.
[The author is a Principal Associate, International Trade Practice, Lakshmikumaran & Sridharan, New Delhi]