Why is WTO's 13th Ministerial Conference important for Bangladesh?

The 13th Ministerial Conference (MC13) of the World Trade Organization (WTO) held in Abu Dhabi from February 26 to March 2 has significance for Bangladesh. The multilateral organisation has been working on increasing trade through negotiations among the member countries on various trade-related aspects. The ongoing negotiation of the WTO is the Doha Development Round (DDR), launched in 2001 in Doha, Qatar committed to completing agreements on various issues including agriculture, non-agricultural market access, services, trade-related intellectual property rights (TRIPS) and fisheries subsidies, among others. However, the Doha Round remains unfinished due to the complexities arising from differences among WTO's member countries, particularly the larger countries.

WTO ministerial meetings always hold particular importance for Bangladesh as we have active interests on several trade issues. The MC13 is even more important now since Bangladesh is set to graduate from its LDC status and become a developing country by 2026. Another important point to note is that the MC13 was held at a time when world trade has been facing various challenges in view of the changing global economic and geopolitical landscapes. This is affecting global trade, which plays a role in economic advancement and ensuring human well-being.

Indeed, due to the lack of a common position among WTO member countries on multilateral trade issues, expectations from these high-profile meetings have been low. The MC13 was no different. Some of the key issues on the MC13 agenda included fisheries subsidies, WTO reform, agriculture, e-commerce, development agenda for LDCs, and TRIPS waiver.

In terms of fisheries subsidies, no agreement was achieved. At the previous ministerial conference—MC12—member countries had agreed on prohibiting subsidies for illegal, unreported, and unregulated fishing. However, the most damaging subsidies globally are those contributing to overfishing and overcapacity. This was to be negotiated at MC13. The worry is that the large amount of fisheries subsidies provided in the EU, the US, China, Japan, and Korea benefit their fisheries sector immensely. Moreover, the objective was also to extend the ban on subsidies, including those for fishery-related activities like shipbuilding, labour, and fuel at MC13. India took on a leading role and argued that its fishermen should be allowed unlimited subsidies when fishing in sovereign waters. Their proposal suggested that developed countries should fully prohibit deepwater subsidies and developing countries should be allowed to continue such support for a specified period, set at 25 years.

For Bangladesh, the decision on fisheries subsidies holds crucial relevance as we are a major fishing country, globally ranking third. Fishing ensures a major source of protein, employment, and contributes to the gross domestic product (GDP) of the country. Therefore, from a livelihood perspective, small artisanal fishers will require support.

There was no agreement on agriculture at MC13. The objective of the Doha Round was to work for a fair and market-oriented agricultural trading system. This was to be accomplished through significant cuts in trade-distorting domestic support for agricultural products, enhancements in market access for agricultural goods, and the gradual elimination of export subsidies. However, reaching an agreement on agricultural subsidies has proven challenging. This is primarily because developing countries have been pressing for reforms in the trade-distorting farm policies adopted by developed nations. India demands the "peace clause" agreed upon in 2013 for agriculture to be permanent in the agriculture package. To put it simply, this clause protects countries from legal repercussions if they surpass the permitted limits for farm subsidies in their public stockholding initiatives. WTO regulations allow for the establishment of food stocks. India purchases rice from farmers at a higher price, which encourages higher production. Developed countries are against using such market price support mechanisms. From the perspective of developing countries, special treatment for their small farmers should be allowed. Countries should be allowed to build public stocks of food grains for food security purposes. Even though Bangladesh is a net importer of food and agricultural products, it is not included in the Net Food-Importing Developing Countries (NFIDC) category. As an LDC, Bangladesh can provide export subsidies for non-agricultural products. It also provides export subsidies on various agricultural products. And given its LDC graduation, Bangladesh has an active interest in agricultural negotiations as well.

Currently, a moratorium exists on customs duties for electronic transmissions like email and online content. Developing countries advocate for lifting the moratorium to allow them to collect tariffs on such services. The meeting secured a two-year extension of the moratorium, delaying the imposition of tariffs on these services until 2026. This has implications for Bangladesh and other developing countries as revenue generation from e-commerce may be affected.

In the Doha Round negotiations, the central focus was placed on "development," aiming to address the specific needs of developing countries, especially those of the LDCs. The MC13 has limited commitments for the LDCs and graduating LDCs. These countries will receive LDC-specific support, including duty-free market access, technical assistance, and capacity-building programmes, for three years after graduation. Preferential market access holds the greatest significance for Bangladesh's smooth LDC graduation. However, there is no binding commitment guaranteeing the continuation of this support after graduation.

LDCs are exempt from enforcing exclusive patents under the TRIPS agreement. However, upon graduation, Bangladesh will need to comply with patent regulations. Previously, the WTO agreed on waiving the TRIPS requirement for Covid vaccines, enabling countries to manufacture these vaccines without patent restrictions. While this waiver was approved, large pharmaceutical companies which have heavily invested in these patents are reluctant to relinquish control. A separate proposal for waiving TRIPS requirements for diagnostics and therapeutics, previously discussed at MC12, did not see any headway this time.

While the WTO director-general defended the progress achieved, critics labelled the meeting as another missed opportunity. The issue of trade's impact on the environment entered discussions. However, some argue that this broadens the WTO's agenda unnecessarily, suggesting that existing platforms like the UNFCCC and COP are better suited for climate discussions.

Developing countries like Bangladesh face a critical challenge. To comply with carbon emission reduction goals, particularly when exporting, we require access to advanced climate technologies. As of now, technology transfer to LDCs, stipulated in the TRIPS Agreement, has not materialised, leaving these countries at a disadvantage. This lack of access, coupled with the high cost of these technologies, further complicates their ability to meet stricter environmental regulations after graduating from LDC status.

Writer: Dr Fahmida Khatun is executive director at the Centre for Policy Dialogue (CPD) and non-resident senior fellow of the Atlantic Council.

Source: The Daily Star