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Business News/ Politics / Policy/  India pulls up WTO secretariat over comprehensive reforms call

India pulls up WTO secretariat over comprehensive reforms call

The report advocated the end of consensus principle under which trade negotiations are conducted

India said it is concerned at the Secretariat becoming a party to recent report by international organizations on WTO reforms. Photo: AFPPremium
India said it is concerned at the Secretariat becoming a party to recent report by international organizations on WTO reforms. Photo: AFP

Geneva: India has chastised the World Trade Organization (WTO) secretariat for advocating comprehensive reforms, along with the World Bank and the International Monetary Fund (IMF), which seek to terminate the consensus principle for launching plurilateral negotiations in new issues such as electronic commerce, investment facilitation, and disciplines for micro, and small and medium enterprises, according to people familiar with the development.

In a hard-hitting statement issued at the informal trade negotiations committee (TNC) meeting at the WTO on Tuesday, India said it is “deeply concerned at the WTO secretariat becoming a party to the recent report by international organizations on WTO reforms." Instead of addressing “the existential crisis facing the Appellate Body", which is the highest adjudicating arm for resolving global trade disputes, the proposed reforms, particularly the plurilateral trade negotiations in new issues, will amount to “launching a new round [of trade negotiations] even when we still need to address some of the Doha issues," India’s trade envoy J.S. Deepak said, according to people present at the meeting.

Without addressing the digital divide and numerous concerns arising from globalization for countries like India, it would be imprudent to seek reforms that will “freeze the inequities against the developing countries and perpetuate the monopoly of [e-commerce] platforms that would thwart competition," India maintained. “In India, a fledgling but vibrant electronics industry has been almost completely wiped out after joining the ITA-I (information technology agreement), while in the last eight years, our exports of goods as a proportion of GDP in percentage terms have reduced by a third," argued Deepak.

Last week, WTO director general Roberto Azevedo, along with the chiefs of the World Bank and the IMF, issued a report, ‘Reinvigorating Trade and Inclusive Growth’ at the IMF meeting in Bali, Indonesia. The report prepared by the WTO secretariat along with the secretariats of the IMF and the World Bank advocated the termination of the consensus principle under which multilateral trade negotiations are conducted.

The 34-page report, assessed by Mint, called for jettisoning the mulitlateral negotiating framework, for pursuing plurilateral negotiations instead of multilateral negotiations in new issues such as electronic commerce that include cloud computing and localization of servers, investment facilitation, disciplines for micro, small, and medium enterprises, and gender among others, and differentiating countries like India from denying special and differential flexibilities.

“In the absence of any explicit request from the membership by consensus, we expect the secretariat to act with restraint in this matter so that the member-driven character of the WTO is preserved," India said.

Under WTO rules as set out in the Marrakesh Agreement, the secretariat cannot offer or propose reforms without prior approval of all the 164 members. Clearly, it violated the core principles of the Marrakesh Agreement for conducting the business at the trade body, said a trade envoy from a South American country, preferring anonymity.

Deepak said the issue “is best resolved by the membership without the secretariat offering its suggestions."

Among several countries who joined India in voicing their concern at the secretariat’s report, South Africa’s trade envoy Ambassador Xavier Carim who spoke for the African Group said “the secretariat’s stature is secured when it maintains its international character and stands apart from the partisan positions of members".

However, major industrialized countries, such as the United States, the European Union, Japan, Canada, and Australia, welcomed the reform proposals saying that the institutional reform is an imperative at this juncture. The US deputy trade representative and envoy to the WTO ambassador Dennis Shea said his administration is encouraged by reforms proposed by the US Trade Representative at the Buenos Aires ministerial meeting.

Responding to criticisms against the secretariat, Azevedo said he does not know which division of the secretariat collaborated with the World Bank and the IMF in drafting the report. Azevedo said he does not remember all the contents of the report as he had read it sometime ago, adding that he will now look into the report in the face of criticisms made by members, suggesting that there was no bias, according to several people present at the meeting.

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Published: 18 Oct 2018, 11:51 PM IST
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