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.