Don’t blame India for blocking the WTO

Ngozi Okonjo-Iweala is due to visit New Delhi this week and, to be honest, nobody in India knows why she’s coming. Trade experts elsewhere are aware that the World Trade Organization’s (WTO) new director-general has staked her credibility — and the organisation’s — on completing a long-delayed agreement to curb subsidies that have encouraged massive overfishing. As far as the rest of the world is concerned, India is holding up that agreement. In New Delhi, though, most think Okonjo-Iweala is coming to discuss India’s demand for an intellectual-property waiver for Covid-19 vaccines.
The fisheries talks have been trundling along since 2001, while deep-sea overfishing has become a bigger problem every year; perhaps one-third of fish reserves globally are now unsustainable. Shortly after assuming office, Okonjo-Iweala decided to make the issue a priority, hoping to cobble together an agreement at the ministerial-level WTO meeting set to take place in a fortnight. It’s easy to see why: The WTO desperately needs a win, this is the only active multilateral negotiation it is currently hosting and surely no one could have a problem with saving the world’s fisheries, right?
Indian officials — and some others, from African and Caribbean countries in particular — don’t see it that way. They ask why their subsistence fishing communities — “artisanal fishermen,” as the negotiators put it, which makes these poverty-stricken communities sound like hipsters — should be lumped in with the big trawling fleets that plow the deep seas.
If the director-general had wanted to pick an issue that encapsulated all the ways in which the WTO has become dysfunctional, she couldn’t have done a better job. Poorer nations are irritated that their right to “special and differential” treatment under WTO rules is being eroded. They’re insisting on exemptions and carve-outs for their subsistence fishermen.
Rich countries, meanwhile, think developing nations aren’t pulling their weight. Except, by “developing nations,” they really mean “the People’s Republic of China.” Heavily subsidised Chinese fleets are now being sighted ever further afield: They “plundered” the Galápagos Islands last year, for example, netting thousands of tons of squid and fish.
China spends over $7 billion subsidizing its fishing fleets, according to a Congressional Research Service report released this September. That’s by far the most in the world, more than twice what the US shells out. And yet few doubt Beijing will cheerily sign whatever agreement is reached — and then quietly make its subsidies even more opaque than they are now. That’s arguably how it has always handled its promises at the WTO.
By contrast, India barely spends any money supporting its fishermen — less than $300 million for about 16 million people, according to the CRS. That’s a drop in the ocean of the Indian federal budget.
Indeed, given how paltry the sum is, it should be possible to find some other, WTO-compliant mechanism to compensate and support these communities. For the moment, the Indians are proposing that subsidies for deep-sea fishing be phased out, leaving room to support small fleets that operate close to a country’s shore.
Few seem to be interested in such a compromise: Trust in the WTO has broken down completely. The West is right to think that developing-country exemptions are being exploited by the world’s largest trader and deep-sea fisher, China. The developing world is justifiably tired of paying the price for Beijing’s rule-breaking.
And nobody trusts the US to play honest broker, given that the new administration in Washington has chosen to maintain its predecessor’s approach to the WTO, if wrapping it up in more supportive rhetoric. Trump broke the WTO’s core dispute-settlement process by vetoing the nomination of judges to the appellate body in Geneva and Biden has yet to reverse course. And then his trade negotiators undermined the fishing talks by demanding, at the last minute, that a “forced labor” clause targeting China be introduced. In Geneva last week, I repeatedly heard Biden described as “Trump without the tweets.”

—Bloomberg