Shaping future trade

India should prepare for changing dynamics

The future of the World Trade Organization (WTO) remains deeply uncertain. The possible return of Donald Trump to the White House has concentrated attention, particularly in the West. Mr Trump has made no secret of the fact that he disapproves of the way international trade is currently governed, and that the United States has got a raw deal in it. The change brought by a second Trump term might be overstated, as the current Democratic administration has hardly been pro-trade either — the WTO remains hobbled by the US’ continued veto of new judges to the appellate body that determines trade disputes. But, even so, some countries are reportedly seeking to move ahead on reviving the WTO in at least two new areas: Control over international fisheries and e-commerce. These are issues that were not major concerns when the original trade talks were taking place under the auspices of the General Agreement on Tariffs and Trade, or GATT. However, they are now of increasing importance.

The question is how India can and should respond to attempts to codify rules for fisheries and e-commerce. Naturally, the national interest must be fairly represented in Geneva. But the national interest should be defined in terms of the interests of consumers as well as producers, and tempered with an understanding that well-governed international trade is of vital importance. A previous ministerial conference worked hard to come to an agreement about fisheries, but India was one of the countries that prevented some clauses of the draft agreement from coming into force. Indian officials raised some good points about the need for poorer countries to continue to subsidise small and artisanal fishing enterprises. Indeed, there is no reason why single-family fishing enterprises should be treated the same way as large-scale trawler fleets. India must work harder to draw a distinction between its own concern for smaller fishermen and the unrestricted subsidies to mechanised deep-sea fishing provided by the People’s Republic of China, for instance. It is after all the latter (unrestricted subsidies) that create risks of overfishing and naval incidents, which impact India as well as every other coastal country — that is the real target of any fisheries agreement.

When it comes to the e-commerce Joint Statement Initiative, India is not part of the negotiations at the moment. The official position — that India would like the existing WTO systems to be revived before expanding the body’s scope — has some merit to it. But it is also true that every country always benefits from being in the room when such agreements are being discussed and hammered out. A commitment to multilateralism must not stand in the way of being party to beneficial plurilateral agreements. If others go ahead without considering Indian priorities, then there is a real risk that the rules of the road will be altered permanently, and India will become a rule-taker rather than rule-maker in this arena. India should reconsider its refusal to engage in discussions on e-commerce. The broader fact that the WTO has become dysfunctional is beyond New Delhi’s control alone. But the fact is that lack of faith in the WTO is spurring various plurilateral efforts. Indian officials must recognise that this is reality and figure out how to become part of the process, not just bystanders.