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Business News/ Politics / Policy/  Why reforms at WTO could go against the interest of India?
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Why reforms at WTO could go against the interest of India?

Delhi is worried reforms could be used to change the consensus-based model of the multilateral trade body

Photo: PTIPremium
Photo: PTI

New Delhi: New Delhi is concerned that the G20 proclamation on reforming the World Trade Organization (WTO) could be used to change the consensus-driven character of the multilateral trade body, which could go against India’s interest. 

“The G20 declaration suggests the developed countries will try to alter the consensus-based model of the WTO. They may propose a majority-driven model like the Trade Facilitation Agreement (TFA) or voting on the basis of assigned weights as done at the International Monetary Fund," a government official with knowledge of India’s trade position said, requesting anonymity. Under the TFA signed within the WTO umbrella, once two-third of the members signed the deal, it came into effect while other countries were given time to join when ready. TFA benefits are available to WTO members only when they sign the deal. 

The official quoted above said India will oppose any such move even though he foresaw a lonely battle ahead. “It will not be in our interest. Though China is currently opposed to it, they may be forced to accept. That would mean India and South Africa will be left alone opposing it," he added.

At the G20 meeting in Buenos Aires on 1 December, leaders were able to agree on a paragraph on trade in their final declaration, though they avoided contentious issues like “protectionism", “unilateral measures" and “unfair trade" due to differences between the US and China. “We recognize the contribution that the multilateral trading system has made to that end. The system is currently falling short of its objectives and there is room for improvement. We therefore support the necessary reform of the WTO to improve its functioning. We will review progress at our next summit," the G20 declaration said. 

WTO director general Roberto Azevêdo who attended the G20 meeting welcomed the communique, holding it to be a very important moment in tackling current challenges in global trade.

“I am now going back to Geneva (WTO headquarters) to discuss this and all the other issues surrounding it with the other WTO members. We will see how much we can build to improve the system and make it responsive for all WTO members," he added.

India is often accused of stalling negotiations by taking advantage of the consensus-driven approach at the WTO under which even one member can block an agreement in the 164-member body.

At the WTO’s 11th Ministerial Conference in Buenos Aires in December 2017, India blocked an agreement that would have included a ministerial decision on fisheries subsidies; a work programme on electronic commerce and including an extension of the moratorium on customs duties on electronic transmissions, among others, because the declaration did not contain an affirmation of the special and differential (S&D) treatment for developing countries and the conclusion of the Doha Development Agenda (DDA).  

The other issue that may come under stress is the S&D treatment for large developing countries like India and China. “Developed countries may get some developing countries like to voluntarily give up S&D. If countries like Kenya and Nigeria give up S&D benefits, that will put pressure on India. It is easy to create the feeling among African countries that large emerging economies like India are taking the S&D benefits that are meant for small developing and least developed countries. We need to counter that narrative," the official added. 

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Published: 10 Dec 2018, 01:31 AM IST
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