WTO: nations arrive at a crossroads
Context
‘India will have to quickly forge a grand alliance to protect interests and prevent mayhem’
Trump poses problems
According to multiple sources, the Trump administration reneged at the last minute on an earlier commitment by the U.S., and instead sought many onerous conditions — in proposed WTO norms relating to public stockholding of food grains — that developing countries could not accept as binding rules.
No token declaration
The latest meeting ended without even the token Ministerial Declaration mainly due to the Trump administration, leading 40-odd nations to question the centrality of ‘development’ (improving the trading prospects of the ‘developing nations’) in the multilateral trading system as envisaged in the ongoing Doha Round.
TPP withdrawal
In January, the Trump administration withdrew from the Trans-Pacific Partnership, a mega-regional free trade agreement signed by the Obama administration along with 11 other nations.
Favors Bilateralism
With such startling moves, the Trump administration has given further credence to the notion that it favours bilateralism over multilateralism, and protectionism over free trade.
Against continuity of policies
It has also signalled that it would not hesitate to take decisions that upset the continuity of or consistency with earlier U.S. policies.
Blocked appointment of judges
In a much criticised stand, the Trump administration decided to block the appointment of judges to the WTO’s Appellate Body, under the Dispute Settlement Mechanism (DSM) on grounds including that the U.S. was losing far too many cases — something that many have contested.
This amounted to holding the DSM hostage and undermining the mechanism.
Credibility affected
When biennial WTO Ministerial Conferences (MC) end in a deadlock like what was seen in Buenos Aires, it affects the credibility of the multilateral rule-based trading system
‘Sanctity of talks’
Jayant Dasgupta, former Permanent Representative of India to the WTO, referred to the failure in finding a permanent solution to the issue of public stockholding and said by not adhering to the commitments made by a previous (U.S) administration, the Trump administration was setting a dangerous precedent.
Trump administration’s view
Meanwhile, the Trump administration refused to see the talks as a failure. Soon after the Buenos Aires meet, U.S. Trade Representative Robert Lighthizer said”The fact that one WTO Member with an extreme position chose to block a short Ministerial Declaration expressing shared views is no reflection on the excellent work of Minister Malcorra or her team.”
India
The strong position of one member against agricultural reform based on current WTO mandates and rules, led to a deadlock without any outcome on agriculture
Conflicting views
- However, according to Mr. Lighthizer, the Buenos Aires meeting “will be remembered as the moment when the impasse at the WTO was broken.”
- The U.S. will work with willing Members on “e-commerce, scientific standards for agricultural products, and the challenges of unfair trade practices that distort world markets.
- The new direction of the WTO is set: improving trade through sectoral agreements by like-minded countries.
End is near?
Decisions at the WTO are taken by consensus among all member countries. Though all are considered equal, countries like the U.S. wield considerable influence in the manner in which consensus is arrived at.
US Influence
So, when the U.S. decides that sectoral agreements at the WTO is the way forward, it could in turn change the very DNA of the global body and spell the end of WTO in its current form.
Options before India
Opposing the introduction of new and the so-called 21st Century trade issues such as e-commerce, investment facilitation and proposed norms on small firms, without resolving outstanding Doha Round issues such as food security
Bridges with Africa
Already, the Indian government is working on holding a meeting of important WTO members early next year.
Much in common
Pointing out that India’s positions have much in common with the African nations’ stand, Biswajit Dhar, professor, Jawaharlal Nehru University, said, “We have to build bridges with Africa.”
Forge a larger alliance
India needed to quickly forge a larger alliance on issues such as e-commerce and investment facilitation in addition to planning a strategy to counter the moves that are against India’s interests.
Going back to interwar years
If you kick the WTO out, you will be going back to the interwar years (1919-38) when there was total mayhem as there were no rules [to prevent barriers, protectionism and discriminatory trade],” he cautioned.
