MC12 over, it’s ‘gains’ for the developed world

Source: This post is based on the article “MC12 over, it’s ‘gains’ for the developed world” published in The Hindu on 25th July 2022.

Syllabus: GS 3 – Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.

Relevance: About the 12th Ministerial Conference (MC12) of WTO.

News: About the recently concluded 12th Ministerial Conference (MC12) of the World Trade Organization (WTO). The European Union (EU) and some other developed countries are the overwhelming winners, while India finds itself on the losing side.

How developed countries gain at MC12 on the Covid-19 fight?

In October 2020, India and South Africa put forth a proposal seeking to temporarily suspend the protection of intellectual property rights such as patents, copyrights, industrial designs and trade secrets. The proposal garnered the support of almost 100 countries at the WTO.

However, Germany, the United Kingdom, Japan, Switzerland and the United States opposed the proposal. Later, the US agreed to limit the proposal only to vaccines.

Counterproposal: The European Union (EU) made a counter-proposal to undermine the proposal made by India and South Africa. This counter proposal provided a cosmetic simplification in certain procedural aspects of compulsory licensing in patent rules. This formed the basis of the final outcome at the MC12.

Significance of the proposal: It adds stringent conditions that are not in the WTO rulebook.

What are the other gains for the EU at MC12?

WTO reforms: The EU sought to make fundamental changes to the institutional architecture of the WTO. It also sought to give a formal role to the private sector in WTO processes. The EU has secured both these objectives in the ministerial outcome.

Environment issues: The EU has also managed to create a window to pursue negotiations on issues related to trade and the environment at the WTO. This is an issue of concern for many developing countries.

What were the failures of India at MC12?

A permanent solution to public stockholding: Despite having the support of more than 80 developing countries, this issue has not found mentioned anywhere in the ministerial outcome.

Instead, the developed countries have succeeded in diverting attention from India’s interest by agreeing that food security is multidimensional, requiring a comprehensive solution.

On other issues: 1) India failed to secure the right to raise revenues by taxing electronic transmissions, 2) On fisheries subsidies, India gets two years to have suitable regulatory mechanisms in place to monitor fish catch and reporting. If not, then the subsidies to traditional fishermen will be prohibited.

Overall, India’s negotiators need to undertake a careful examination to learn lessons from the dynamics at the MC12 and make course corrections.