Developing nations to discuss trade moves as US resets rules

  • Over a dozen trade ministers gather in Delhi today to discuss issues confronting multilateral trading
  • India says developing countries must press for balanced reforms at the WTO so that 'developing countries have enhanced in the system'

Geneva: s India attempts to build a strong coalition of like-minded developing countries for reclaiming the “developmental" dimension of global trade, the central challenge remains how to stop “unequal" multilateral and bilateral trade treaties being demanded by the US, say trade envoys.

Trade ministers from more than a dozen developing countries will congregate in New Delhi on Monday to discuss problems confronting the multilateral trading system, especially the World Trade Organization, due to “inequities and imbalances" in existing global trade rules.

The US under the leadership of President Donald Trump has unabashedly sought market access and favourable rules for its industry and agriculture on “my way or highway" basis both bilaterally and multilaterally at the WTO, said a trade envoy from South America who asked not to be named.

On 9 May, the US suffered a major setback bilaterally when China refused to agree to what it reckons as an unequal treaty with the US. “China needs a cooperative agreement with equality and dignity" but not one-sided trade treaties, said China’s vice-premier Liu He, after the US-China trade talks collapsed in Washington.

At the WTO, the US is seeking to change multilateral trade rules selectively so that the burden of new commitments are shifted to developing countries. The US wants ambitious disciplines on fisheries subsidies that would deny any room for developing countries such as India and South Africa to support their fishermen.

The US, however, does not want credible multilateral rules for reducing its trade-distorting farm subsidies for agriculture or reducing the hurdles for the movement of short-term services providers.

Ominously, the US seeks to terminate the existence of the highest adjudicating body or the Appellate Body at the WTO for resolving global trade disputes so to ensure that there is no independent and impartial judicial mechanism that rules against the US’s trade measures that are inconsistent with global trade rules, said several trade envoys, who asked not to be named.

The US and other industrialized countries are also seeking to introduce what is called “differentiation" among developing countries to deny special and differential treatment for India, South Africa, Indonesia, and China. The US and its allies also want to eliminate the principle of consensus-based decision-making at the WTO after having junked the Doha development agenda trade negotiations.

Against this backdrop, India is working with developing countries “to keep development" at the core of the global trading system. India says developing countries must work together to “preserve the fundamental rules of the WTO, namely, non-discrimination, decision-making by consensus and special and differential treatment for developing countries and LDCs (least-developed countries)" .

In a concept paper issued ahead of the two-day ministerial meeting, India says developing countries must press for balanced reforms at the WTO so that “developing countries have enhanced stake in the system." New Delhi says “resolution of the issue of appointment of Appellate Body members" must remain the top most priority.

“The Dispute Settlement Mechanism enables effective enforcement of WTO rules and is the central pillar system," India has argued.

The US-China trade war has also impacted the WTO negatively as the US is increasingly seeking unilateral reforms/changes in the trade body through notification requirements and special and differential flexibilities.