As new trading arrangements evolve, India is not in the room

The form and thrust of negotiations are changing at the World Trade Organization (WTO). And India is watching from the sidelines. WTO came into effect in 1995. While trade has become far more liberalised since the 1990s, it has not resulted in egalitarian benefit-sharing. The 2008 financial crisis resulted in a trust deficit in globalisation. Protectionism grew. And the pandemic reinforced economic nationalism.

A significant casualty at WTO has been the lack of any meaningful outcome of the negotiations on rules of trade that members set for themselves under the Doha Development Agenda in 2001. The fissures were officially recorded in the declaration of the 10th ministerial conference in 2015. Adopted by consensus, the Nairobi Declaration had then noted that while “many” members reaffirm the Doha mandate, others do not, and that while “many Members want to carry out the work on the basis of the Doha structure”, “some want to explore new architectures”, as well as “identify and discuss other issues for negotiation”. India had then expressed its deep disappointment at the Declaration.

But the spark lit by the “some” in Nairobi for “new architectures” and “new issues”, resulted in further fragmentation at the 11th ministerial conference in Buenos Aires in 2017. This saw the birth of joint statement initiatives (JSIS) in four areas: E-commerce, investment facilitation, services domestic regulation (DR) and micro, small and medium enterprises (MSMES). The JSI participants claimed that the objective was to have focused discussions among interested members to achieve concrete outcomes. India and South Africa rightly pointed out the risks that fragmented JSIS pose to the foundations of multilateralism.

JSIS have, however, grown. In the build-up to WTO’S 12th ministerial conference scheduled for November, concrete outcomes are envisaged on the services DR and e-commerce, and in investment facilitation. India has remained outside all these negotiations.

This is sad from the perspective of services DR. Aimed at ensuring that requirements and procedures for recognition of qualification foreign service suppliers, this evolved by with the active participation of India other members at WTO’S Working Part Domestic Regulation (WPDR). In 2017, I had also proposed an agreement on t facilitation in services to ease regulatory riers, but did not get sufficient support.

With DR being hived off from the WP and India not being a part of it, its thrust i commercial presence — an area of interes developed economies — as opposed to ea recognition of qualification and licensin professionals — an area in which India other developing countries have a hi advantage. There are now 64 pa pants for the JSI-DR.

WTO does allow “plurilat agreements” which creates ri and obligations only for some m bers. But any new plurilateral ag ment can be incorporated only WTO members agree, which b cally means that JSI non-par pants such as India can block adoption of such new agreeme However, the services DR will not be a “plurilateral agreement”; rather, these JS members will incorporate it as “additi commitments” in their existing schedu commitments on trade in services. The b fits would then be available to all member a most-favoured-nation basis. While this seem fine for JSI non-members such as I it may effectively undermine any meanin multilateral outcome on DR.

India and South Africa have mainta that the JSI outcome on DR cannot be a filment of the mandate for services DR d plines under WTO. They need to demonst commitment and negotiating heft to re multilateral discussions on DR at WPDR with the momentum of the JSI on DR incr ing, the room to manoeuvre this multilat “homecoming” of DR is diminishing.

The JSI headwinds are a threat to mult eralism. But staying out of the room deprives India of an opportunity to influ the outcomes. As an original multilater India needs to play a more constructive