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Why India should Buttress WTO
Business Today, April 05, 2018
By Pradeep S Mehta and Bipul
The world is witnessing a dirty trade war with countries, including
the US and India, adopting nonsensical protectionist tariffs. This
will dirty the already muddy waters at the World Trade Organisation
(WTO) whose integrity is under siege by the US, without any national
gains. The comity of nations has to come forward to ensure that the
WTO continues to function effectively.
However, as every crisis beckons opportunities, there is the need
for thinking and acting on how to make best out of it. Here India's
role is exemplary as it has tried to buttress its faith in the
multilateral system by calling a mini-ministerial meeting in March
after the collapse of the 11th Ministerial Conference in Buenos
Aires late last year.
It's a fact that as compared to bilateral/regional/plurilateral
trading regimes, the multilateral trading system is much better in
every which way. Notwithstanding a functioning dispute settlement
mechanism, it operates on a number of non-discriminatory principles,
which are mainly to the advantage of small trading nations.
Since the WTO's establishment in 1995, India has benefitted hugely
from its participation in this system. It has helped India to more
than double its share of global exports in goods and services,
create new jobs and reduce poverty. More importantly it helped us in
undertaking crucial domestic reforms in a number of areas.
Therefore, restoring the WTO's integrity and status is in India's
interest. Some pundits have argued that this is possible if there is
forward movement in having disciplines on new issues such as
investment facilitation, electronic commerce, micro & small
enterprises, gender, etc.
is true that India has huge interest in resolving some remaining
Doha Round issues in the areas of agriculture and fisheries
subsidies, the argument in favour of not engaging on new issues is
flawed on several grounds. Most important is the fact that both the
global economy and the Indian economy have undergone significant
changes over the last two decades. For India to develop in future by
creating new jobs and income opportunities and play a much greater
role in global affairs, it is in our interest to engage in
discussions on these issues at the WTO.
This is not to say that while agreeing to discuss and/or negotiate
new issues at the WTO, there will not be any red lines for India.
There are and will be, such as in having special safeguard
mechanisms for protecting the interests of our small and marginal
farmers, in having more effective special and differential
treatments by linking them with our objective of achieving the
Sustainable Development Goals, and in preserving the sanctity of the
WTO's dispute settlement system with some reforms as necessary.
In other words, India will not have to make unilateral concessions
to other WTO members. What is needed is constructive engagement on
the part of India and other major players in resolving some Doha
Round legacy issues and in negotiating new issues by keeping in mind
and balancing their role in the delivery on development.
However, this can happen under a crucial assumption - that the US
will not wreck the system by making unjustifiable demands, such as
complete overhaul of the WTO's dispute settlement system by taking
away its enforcement power.
This is time for India to show its leadership and once-and-for-all
dispel a popular notion, particularly in the west, that we are not a
good sport in trade negotiations.
Pradeep S. Mehta is the Secretary General while Bipul Chatterjee
is the Executive Director at CUTS International, a global think- and
action-tank on economic policy issues.
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