India at MC13
Beijing, however, is busy exploring all strategic options at its disposal, to further its economic and trade interests, including the strengthening of the Asia-Pacific axis (RCEP and CPTPP), and the stage provided by the WTO. So, as the WTO’s 13th ministerial conference (MC13) begins in Abu Dhabi today, it looks certain that with nearly 130 countries on board, the China-led Investment Facilitation for Development (IFD) plan would pass muster, and carve out a legitimate “plurilateral” space within the WTO framework. It’s interesting that the US finds itself on the side of key emerging market economies like India, Brazil and South Africa that oppose the IFD. But the “Doha Agenda” or further liberalisation of world trade via a rule-based, inclusive system, would likely remain in deep freeze for a longer period.
To be sure, a key Doha mandate was “to reduce, or… eliminate tariffs …as well as non-tariff barriers, in particular on products of export interest to developing countries.” MC13 is seen to offer precious little to this end. With the core mandate intractable, the conference is expected to focus on issues like “trade and environment”, labour and gender. These are fast becoming important tools to influence trade, but aren’t going to do as much to impart a strong impetus to the stagnant world trade, and could hurt the interests of India. The good thing is that New Delhi is now much wiser and is keenly aware of the pitfalls of bad trade deals, as much as of the potential gains from “free trade” in the real sense of the term.
At MC13, India has a high stake to protect, and that is the integrity of WTO. As a low middle income economy still at the early high-growth phase, WTO remedies for dumping, non-tariff barriers etc. are very useful for the country. It’s crucial for India to get the dispute settlement body revived, as a reasonably neutral arbiter. The country would continue to need reprieve on public stock-holding of food grains, though this is an issue that was unfairly pitted against it, in the first place. The discontinuation of PMGKAY, the scheme for extra free grains for PDS, and the likely expansion of the cash-transfer-for-food-subsidy project would reduce public grain stocks, and resolve the issue over time. Liberal trade helps only if the economy is globally competitive, and here is where India’s policymakers still have a big task at hand. The stunted growth in labour-intensive exports doesn’t behove a fast-growing country.