Commerce ministry likely to soften stance on 21st century issues at WTO

The commerce ministry has hinted at a gradual softening of stance on contentious trade issues such as government procurement, e-commerce, and the environment at the World Trade Organization (WTO), by first negotiating such deals bilaterally with countries under ongoing free-trade agreements (FTAs).

A large number of countries are negotiating plurilaterals or joint-statement initiatives on 21st century issues such as e-commerce, the environment, and investment facilitation at the WTO. This India has challenged, holding that they do not have the sanction of the multilateral body and must not lead to modifications to its rule book.

On Wednesday, co-sponsors of three new environmental initiatives met jointly and agreed to put environmental concerns at the heart of future trade discussions. One hundred and eleven countries are negotiating an investment facilitation agreement.

Earlier this month, 67 members of the WTO concluded a plurilateral on services domestic regulations aimed at making it easier for foreign service providers to access, understand, and follow the procedures for getting authorisations or licences for operating in the host country.

Though India is not opposed to such agreements at multilateral levels, it is including the same issues in bilateral deals. Answering a question whether India is ready for the new areas it is entering in bilateral trade agreements, Commerce Secretary B V R Subrahma­nyam said India did not have a choice.

“The question is either you don’t en­gage or engage. If you want to talk to the EU, the UK, Australia, and Canada, they will say let’s talk environment, gender, and government procurement. While India is not part of the WTO plurilateral on government procurement agreement, it is talking government procurement bilaterally,” he said while speaking at the Confederation of Indian Industry Partnership Summit on Tuesday.  

Subrahmanyam said though India did not have much experience or capacity in these new areas as the department concerned never looked at international agreements, the bilateral FTAs will build up capacity in a secure environment.

“In the WTO, you are facing a full-blown 180 membership. Here we do it bilaterally. Cut our teeth and once you have a certain comfort level, when you have broken down domestic opponents to understand the benefits of these particular areas, then you actually multilateralise it. We actually look at these as stepping stones on which we will build up a larger multilateral agreement. I foresee a future, 10 years down the road when we will be having a different approach at the WTO,” he said.

The commerce secretary said including 21st century issues in bilateral deals would bring both opportunities and challenges for Indian industry.

“There will be tremendous access to new markets. They will lose a lot of tariff disadvantages they suffer from. There will be a lot of non-tariff barriers which will go away. The FTA with the UAE will open huge avenues for our pharma sector. But on the other side, you are opening up your market. So industry will have to realise that competition will increase. Protectionist barriers will come down to a significant extent. Therefore, to survive, industry has to focus on high value addition; it has to move up the value chain and go for branding. More importantly, Indian companies will have to become members of global supply chains and develop solid market intelligence,” he added.