The WTO’s leaky boat could be our best hope in a storm

Russia’s incursion into Ukraine’s territory ushered in a new phase in the existing geoeconomic and geopolitical arrangements. As Western academics debate whether this new European war will spell the end of a liberal regime that has defined world order since the fall of the Berlin Wall (and the collapse of the Soviet Union), the Russia-Ukraine conflict has reactivated many fault-lines, lying dormant in the world economy. And for developing countries like India, multilateral platforms like the World Trade Organization (WTO) offer the best opportunity to address these challenges, despite the many shortcomings that have hampered the institution.

A food crisis tops the list of phantoms emerging from the ravages of that war; it will reignite many second-order effects that the world had temporarily forgotten, which could include renewed clashes between the West and poor nations, or even civil wars in poverty-stricken nations. One of the reasons for the renewed hostilities may be that the notion of trade in the US and EU is still rooted in an outdated economic orthodoxy, even as editorials in leading newspapers and policy papers from think tanks debate the need for a new heterodoxy around to replace the now-defunct canon.

The role of the WTO is therefore no longer negotiable in the face of the severe food crisis facing the planet. A June 6 report by the Food and Agriculture Organization and the United Nations World Food Program (WFP) entitled “Hunger Hotspots” predicts that 20 countries will face a worsening food availability crisis over the next three months.

While it is true that Russian aggression triggered a global food crisis, it is also true that the world was already facing a food crisis before February 2022. About 2.3 billion people were classified as food insecure in 2021. According to the Global Report on Food Crises, another WFP publication, global famine was alarmingly high in 2021, with “nearly 193 million people facing acute food insecurity and needing urgent assistance in 53 countries/territories.” The pandemic and climate change compounded the food crisis in 2020 and 2021. The problem is exacerbated when energy price inflation (affecting fertilizer prices) and disrupted supply chains add affordability to availability issues.

The food emergency drew the world’s attention to India and 29 other countries that banned wheat exports shortly after Russia’s war sent global grain prices skyrocketing. While India may have been forced to impose an export ban as wheat production fell short of forecasts and overall food grain stocks fell, solutions to the supply of grain were indeed proposed at the 12th WTO Ministerial Conference or MC12, held recently in Geneva found the WFP . India and the others agreed to supply wheat to WFP while allowing them to meet their domestic food security needs.

However, the Western media has continued to pillory India’s export ban, even though wheat exports in 2021-22 (before the ban was enforced) amounted to just over US$2 billion, or a mere 0.5% of the country’s total exports deceive. The stance of Western leaders at the WTO on agriculture has long undermined India’s attempts to ensure food security for its citizens through subsidies at both the production and consumer levels. The formula used to determine whether these subsidies are within acceptable limits is based on outdated data; All attempts by India and other developing countries to find a lasting solution have met with repeated filibustering.

A drum roll of anti-India protests have been revived in what appears to be a coordinated move. Seven WTO members – including the US, Japan, the EU and the UK – raised concerns about India’s export bans at the trade organization’s first post-MC12 agriculture meeting.

In parallel, and seemingly unrelated, 12 members of Congress have written to US President Joe Biden asking him to formally object to India’s trade-distorting farm policies at the WTO. Your letter mentions nothing about the antiquated formula or that US subsidies could also be trade-distorting. There are, of course, unfounded suspicions that these protests are being sponsored by major grain traders, who now fear the Indian ban could even extend to rice exports, which were worth about $10 billion between 2021 and 2022.

It’s not just food grain. The duplicity and narrow-minded vision of wealthy nations was shown in full when many of them stubbornly refused to relax intellectual property rights for global vaccine distribution at the height of the pandemic. These advanced nations have chosen to prioritize private profit over public health in times of global crisis. And yet, at the MC12, a solution has been worked out for developing countries to manufacture and sell patented vaccines in both the domestic and international markets, although this comes two years after India and South Africa first proposed such a Covid-19 cause for detente and when the pandemic appears to be abating.

Some of the trade-related moves against India may have stemmed from the western hemisphere’s disappointment with New Delhi’s stance on Russia’s expansionary moves. An old strategy seems to have been resurrected: continue to court Indian leadership at plurilateral meetings, but deliver a thousand cuts across diverse platforms, including the media. India’s best chance of resistance may still lie in forming a coalition of developing countries on multilateral platforms.

Rajrishi Singhal is a political consultant and journalist. His Twitter handle is @rajrisisinghal.

Subscribe to something Mint newsletter

* Enter a valid email address

* Thank you for subscribing to our newsletter.

Comments are closed.