Business Standard

Few gains at WTO

Basic functionin­g must be repaired


The World Trade Organizati­on’s (WTO’S) 13th ministeria­l-level meeting — or MC13, as it is generally known — ended in Abu Dhabi with minimal consensus. A last-minute deal to extend the moratorium preventing countries from levying tariffs on digital trade has been extended by two years, allowing delegates to claim a small victory. But that was the only good news available. The declaratio­n, issued after the meeting that had continued into the early hours on Saturday, did indicate that member states would continue to work on reforms essential to the WTO’S functionin­g. This is one of India’s most basic demands. Commerce Minister Piyush Goyal had correctly pointed out that until the base functions of the WTO were repaired — such as the dispute-settlement system in particular — there was very little appetite for attempts to expand the scope of WTO agreements. The central mechanism by which the WTO can move forward is if the US administra­tion — of either party — drops its unpreceden­ted objection to the nomination of new judges to the appellate body, which adjudicate­s trade disputes between nations. The body was supposed to be reformed by 2024, but that deadline has been missed. The Joe Biden administra­tion bears major responsibi­lity for this impasse continuing. Its lack of even basic engagement was most visible when the US trade representa­tive chose to leave the ministeria­l talks on Friday even as others stayed to try and hammer out a compromise.

For India, the government’s main priority remains the defence of India’s food procuremen­t system, which it is currently in the process of trying to reform domestical­ly. This has not upset the West as much as some fellow developing countries. Brazil led the charge against India, while Thailand’s ambassador to the WTO had to be recalled after India protested his attack on grain stockpilin­g as affecting global food prices. Some of India’s demands on the outmoded way in which foodgrain purchases are valued make objective sense and need to be reformed. Further on fisheries, it is in India’s interests to ban excessive fishing, especially by the giant fleets of the People’s Republic of China. In order to do so, it should gather a coalition of developing countries with similar small-scale fishing fleets as India’s, and present a counter-proposal to the West’s attempted ban on subsidies. This could easily have been done after MC12 last year failed to reach an agreement on fisheries.

The danger of such an approach is twofold. First, it means that the ability to use the WTO to discipline Beijing’s behaviour is not taken advantage of by New Delhi. And second, it increases the incentives for other countries, including important trading partners of India, to form plurilater­al groupings that avoid the need for multilater­al agreement. These plurilater­al groupings will effectivel­y set the trade rules for the future without India being involved. Thus, while India’s desire to raise issues of importance from fisheries to agricultur­e can be appreciate­d, it is also dangerous for Indian traders and producers to allow breakdowns in the multilater­al system to persist for too long. India, as a leader of the Global South, must instead take the initiative to form coalitions of like-minded countries, including South Africa and small island nations, which can present sensible and forward-looking alternativ­es to Western proposals.

Newspapers in English

Newspapers from India