World Trade Organization (WTO)

• The World Trade Organization (WTO) is a global organization that promotes and regulates global trade.
• It was established in 1995 and includes the European Union among its 164 members.
• It gives member nations a place to negotiate and enforce trade agreements, settle disputes, and encourage economic development and growth.
• Geneva, Switzerland, is where it is headquartered.

The WTO’s origins:

• The WTO is the replacement to the Overall Settlement on Duties and Exchange (GATT), which was made in 1947.
• The WTO was established as a result of the GATT’s Uruguay Round (1986–1994).
• WTO operations began on January 1, 1995.
• The Arrangement Laying out the WTO, generally known as the “Marrakesh Understanding”, was endorsed in Marrakesh, Morocco in 1994.
• India was one of the founding members of the 1947 GATT and its successor, the WTO.
• Principal contrast among GATT and WTO was that GATT for the most part managed exchange products, the WTO and its arrangements couldn’t cover merchandise yet in addition exchange administrations and other scholarly properties like exchange manifestations, plans, and developments.

In light of the COVID-19 pandemic and the war between Russia and Ukraine, India’s finance minister has urged the World Trade Organization (WTO) to examine the issue of farm subsidies with an open mind because it affects the food security needs of emerging economies.

WTO subsidies

Amber Box:

• Subsidies that can sway international trade by making a nation’s goods cheaper than those of other nations are known as amber box subsidies.
  • Examples: Endowments for data sources like manures, seeds, power, water system, and Least Help Value (MSP).
• As indicated by the WTO, horticulture’s golden box is utilized for all homegrown help estimates that are considered to contort creation and exchange.
  • Consequently, signatories to the trade agreement are obligated to reduce domestic supports that fall under the amber box and distort trade.
• Members who fail to fulfill these commitments are required to keep their amber box support within five to ten percent of their production value. (Di Minimus Clause) 10 percent for developing nations and 5 percent for developed nations 

• Blue box:
  • It is the “amber box with conditions,” which refers to conditions that are intended to lessen distortion.
  • Any help that would ordinarily be in the golden box is put in the blue box assuming it expects ranchers to restrict creation.
  • By imposing production quotas or requiring farmers to reserve a portion of their land, these subsidies aim to restrict production.
  • At present there are no restrictions on spending on blue box endowments.
• Green Box:
  • Domestic support measures that do not cause trade distortion or at most minimal distortion are referred to as the “Green Box.”
  • There is no price support for crops in the Green Box subsidies, which are funded by the government.
  • Programs for regional development and environmental protection are also included.
  • Therefore, there are no restrictions on “Green Box” subsidies (with the exception of certain circumstances).

Why are new guidelines for subsidies required?

• Disparate Opportunities for the South:
  • There has been a complaint about the export of agricultural goods ever since the WTO was established. 
  • In general, the perspectives of the Global South and emerging markets have not been given the same weight in trade discussions as those of developed nations.
  • The majority of countries in Asia, Africa, and South America are referred to as the “Global South.”
• Problems with the Food Subsidy Cap:A WTO member country’s food subsidy bill should not exceed the limit of 10% of the value of production based on the reference price of 1986-88. 
  • This is an issue with the reference price that was adopted under global trade norms.
  • The World Trade Organization (WTO) froze subsidies for poor farmers and agriculture in developing nations because they were not counted at all.
  • Due to the unbalanced nature of trade agreements, developed nations have a greater level of food security than developing nations.
• Food insecurity is rising: The challenges to food security posed by the COVID-19 pandemic and the conflict between Russia and Ukraine have reaffirmed the need to reevaluate the subsidy norms, as food and fertilizer security has increased in importance.
• Demand from India:India has requested changes to the formula for calculating the food subsidy cap and the inclusion of programs implemented after 2013 under the “Peace Clause” as part of a permanent solution.

Peace Clause of the WTO

• As a break measure, the WTO individuals settled on a component called the ‘Harmony Statement’ in December 2013 and swore to arrange a long-lasting arrangement.
• Members of the WTO agreed, as part of the Peace Clause, not to challenge any developing nation’s breach of the prescribed ceiling in the WTO’s dispute resolution forum.
• This clause will remain till a super durable arrangement is found to the food storing issue.

Agreement on Fisheries Subsidies (Agreement)

• The Agreement on Fisheries Subsidies (Agreement) agreed at the recently concluded WTO Ministerial meeting will prohibit subsidies from being provided for Illegal, Unreported and Unregulated (IUU) fishing and overfished stocks.
• Under the Special and Differential Treatment (S&DT), Developing Countries and Least Developed Countries (LDCs) have been allowed a transition period of two years from the date of entry into force of this Agreement.
• The Agreement also prohibits providing subsidies for fishing on high seas, which are outside the jurisdiction of coastal countries and Regional Fisheries Management Organizations/ Arrangements (RFMO/As).
• As per the Agreement, no prohibition has been imposed on a WTO Member regarding granting or maintaining subsidy to its vessel or operator as long as it is not carrying out IUU.
• Similarly, no prohibition on providing subsidies has been imposed for fishing regarding overfished stocks as long as such subsidies are implemented to rebuild the stock to a biologically sustainable level.
  • • Significance
• The Agreement will eliminate the subsidies granted to fishing vessels or fishing operators engaged in IUU fishing.
• Such disciplining will check large-scale IUU fishing which deprives coastal countries like India of fisheries resources, thereby significantly impacting the livelihoods of our fishing communities.
• This Agreement also provides flexibility to extend subsidies concerning overfished stocks if measures are taken to rebuild fish stocks to a biologically sustainable level, which supports our fishing communities.
  • • Fisheries Sector in India
• India is the second largest fish producing country in the world accounting for 7.56% of global production and contributing about 24% to the country’s Gross Value Added (GVA)
• India is the 4^th largest exporter of fish in the world as it contributes 7.7% to the global fish production.
• Currently, this sector provides livelihood to more than 2.8 crore people within the country. Nevertheless, this is a sector with untapped potential.
• The fisheries sector has demonstrated double-digit average annual growth of 10.87 % since 2014-15 with record fish production of 145 lakh tons during 2020-21 as per the Economic Survey for 2021-22
• Indian Fisheries and Aquaculture sector registering an average annual growth of 7.53% during the last 5 years.
  • • Challenges faced by Fisheries in India
• The FAO points out that nearly 90% of the global marine fish stocks have either been fully exploited or overfished or depleted to the extent that recovery may not be biologically possible
• In the Tropical regions, multiple varieties of fishes occur, but in smaller groups, which is not good for large scale commercial exploitation.
• Sector suffers from Lack of a reliable database relating to aquatic & fisheries resources.
• Aquatic pollution, destruction of fish habitats & frequent occurrence of Dead Zones/Hypoxic zones leading to shifting or permanent loss of Fishing zone.
• Lack of access to quality seed & feed, inadequate availability of credit.
• Increased use of Fibre Reinforced plastic (FRB), & poor-quality boats leading to ill effects on marine culture
• Poor infrastructure such as cold storage facilities, leading to an estimated 15-20% post-harvest loss.
• Issue of Formalin leads to negative branding of Indian fisheries.
  • • Steps taken to improve the fisheries sector
• Foreseeing the vast resource potential & possibilities in the fisheries sector, a separate Department of Fisheries was created in February 2019.
• The Government has merged all the schemes of fisheries Sector into an umbrella scheme of ‘Blue Revolution: Integrated Development & Management of Fisheries’.
• Fisheries & Aquaculture Infrastructure Development Fund (FIDF) was approved with a total fund size of Rs 7522.48 crore.
• FIDF provides concessional finance to the eligible entities, cooperatives, individuals & entrepreneurs for development of identified fisheries infrastructure.
• Pradhan Mantri Matsya Sampada Yojana (PMMSY)
• Rs 11,000 crore for activities in Marine, Inland fisheries, & Aquaculture & Rs. 9000 crores for Infrastructure – Fishing Harbours, Cold chain, Markets etc shall be provided.
• There are provisions of Ban Period Support to fishermen
• Kisan credit cards for Fishermen
• Kissan Credit Cards (KCC) to fishers & fish farmers to help them in meeting their working capital needs.
• GEMINI: Gagan Enabled Mariner’s Instrument for Navigation & Information
• For dissemination of information on disaster warnings, Potential Fishing Zones (PFZ) and Ocean States Forecasts (OSF) to fishermen, GOI launched GEMINI device and mobile application.
• GOI has issued an advisory to all coastal States & UTs to make mandatory the use of Automatic Identification System (AIS) & Vessel Monitoring Systems (VMS) in fishing vessels for safe navigation.
  • • Looking Forward
• The Fishing Sector has been instrumental in sustaining the livelihoods of over 28 million people in India especially for marginalized and vulnerable communities and has contributed towards encourage socio-economic development.
• In order to face these above challenges, the fisheries sector must develop the capacity to build and run effective quality assurance systems to comply with increasing stringent international standards of international markets as well as extending these to the domestic markets.
• Similarly, it should promote efforts to improve selective fishing gears to minimize by-catches of juveniles and non-target species and to develop technologies to make economical utilization of unavoidable by-catches.

India’s long coastline has the potential of becoming the strength of the economy particularly through the exploitation of the Blue Revolution. India needs to develop more scientifically its fishing system and related infrastructure aspects.