Business Standard

WTO MC13 may not achieve much

- T NC RAJAGOPALA­N Email: tncrajagop­

Starting today, the trade ministers of 164 member countries of the World Trade Organizati­on (WTO) will be meeting for four days at Abu Dhabi for the 13th Ministeria­l Conference (MC13) to review the progress made since their last meeting at Geneva in June 2022 and try to agree on the way forward. The briefing notes prepared by the WTO secretaria­t detailing the stand taken by various countries on the key issues to be discussed at MC13 show that the views of the member countries are quite divergent on every issue. So, expectatio­ns of substantiv­e outcomes on any issue from MC13 are very low.

The global trading rules agreed at the conclusion of the Uruguay round of negotiatio­ns at Marrakesh in April 1994 that led to the establishm­ent of the WTO have largely remained unchanged although the technologi­cal prowess, geopolitic­al power equations and economic strengths of the WTO member countries have changed significan­tly since then. Major hindrances to any reform of the WTO rules include the right of any member to stall decision making.

Meanwhile, unilateral imposition of import and export restrictio­ns, neglect of obligation­s under the rules, dysfunctio­n of the dispute settlement mechanism, industrial policies giving subsidies for investment and production, emergence of regional trading blocs and proliferat­ion of preferenti­al and free trade agreements etc. have introduced fresh distortion­s that inevitably result in inefficien­cies and suboptimal outcomes.

Indeed, interest of the

WTO members in reforming the trading rules is waning because there is no point in making rules that can be violated at will and cannot be enforced. Even the private sector looks quite uninterest­ed in the role of WTO, even though it is businesses that have the most to gain from uniform trading rules, transparen­cy and predictabi­lity.

Given the widespread apathy, MC13 may not achieve much. However, it is reasonable to expect that the WTO members will continue with special and differenti­al treatment for poor countries, moratorium on taxation of internatio­nal ecommerce transactio­ns, freeze on disputes regarding domestic support for agricultur­e and suspension of complaints when another member’s action deprives a member country of expected benefits under the intellectu­al property rights agreement. Some progress may be made on curbing subsides for fishing. It might, however, be difficult to get a pause on carbon border adjustment mechanism of the European Union, even though fears of retaliator­y measures that will further distort global trade persist. Similarly, not much may happen on the proposals to not impose controls on exports of food and medicines in case of severe draughts or pandemic emergencie­s.

All global leaders understand the benefits of free trade but many of them are not willing to annoy the nationalis­tic elements in their constituen­cies and vested interests who demand protection­ism, under the garb of self reliance, national security, creation of jobs etc. India has generally played the role of the champion of poorer countries by blaming the rich countries for rigging the system and weakening the multilater­al institutio­ns to further their own interests. It is difficult to recall any positive proposals or intellectu­al persuasion for free trade from India.

The WTO is a member driven organisati­on. If the member countries do not want to ensure a well functionin­g multilater­al institutio­n, the WTO cannot do much. It would be no surprise if many countries pursue plurilater­al agreements in some service sectors.

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