Rethink trade

India's attitude to WTO negotiations needs more clarity

Early next week, officials across the world will gather for the 13th ministerial conference of the World Trade Organization. MC13, as it is called, will begin on the 26th of this month in Abu Dhabi — and it is far from clear what, if anything, it could possibly achieve. The fact is that there are few stakeholders who are willing to expand the agenda of global trade negotiations. Even reviving basic WTO functions — such as the appellate body that serves as the final word on trade disputes — seems unlikely. The latter has been moribund since former United States President Donald Trump refused to appoint new judges to the panel. The current administration has not acted to revive the WTO, either.

Logically, correcting the basic problems with the WTO’s existing function should come before the scope of trade negotiations is expanded. But that is not the case. New agreements are constantly being sought on issues from fisheries to investment facilitation. In each case, the prime movers are developing countries, and India — and in some cases South Africa and some other developing countries — is less enthusiastic. India’s negotiators have other priorities at the WTO, such as a permanent solution that allows India’s inefficient grain procurement system to become compatible with trade rules. This appears once again to be India’s priority at the WTO ministerial — even as the government has rightly sought to reform procurement and food subsidies at home. What is necessary is to end this stress upon old issues such as farmer subsidies in India. It is in the national interests to go beyond such issues and actively participate in discussions at MC13. India may need to redevelop and rethink its stance on some relevant new-age trade issues, from e-commerce to the environment. At present, the default thinking is that India should stay out of all plurilateral and coalitions working to find solutions to such new-age issues, but this should change. The Indian government should also develop a clear strategy on how and why the dispute-settlement mechanism should be revised and reformed, in spite of the United States’ failure to appoint judges.

In other words, the government should develop India-specific but forward-looking approaches to the issues that will be on the table at MC13. For example, when it comes to investment facilitation, it is meaningless to insist it conform to the model bilateral investment treaty that India released in 2016, since that is highly restrictive. India also insists that issues like gender and the environment not be discussed at the WTO. But the fact is that they are now trade issues; they have moved from being side elements to being a main component in most new free-trade agreements. In any case, some countries are introducing unilateral mechanisms that take labour and the environment into account. India cannot and should not continue to maintain its rigid view on what counts as a trade issue and what does not. The global trade context has changed since the 1990s. In some cases, taking such issues on board will be better for Indian consumers and producers. Plurilaterals may be the way forward, at least for some time. It is better to be in one of these and participate in rule making than to stay outside and be forced to follow the rules set by others.