INDIA AND WORLD TRADE ORGANIZATION
This is a guest blog by Abhinav.
“World Trade Organization” (WTO) is a multilateral organization created to facilitates free flow of goods and services across the globe and ensures fair trade among the nations making globalization equally beneficial for developed and developing nations. WTO was established in 1995 to replace its predecessor “General Agreement on Tariffs and Trade” (GATT) which came into existence in 1948 and provided a platform for trade negotiations till 1994. There was a need to replace GATT as it lacked institutional structure and was only a set of rules and multilateral agreements and lacked a strong mechanism for resolution of disputes.
The objective of the WTO is to help flow of trade smoothly, freely, fairly and predictably. It follows certain principles which are mentioned as below:
Principle of “national treatment” (giving others in trade the same treatment as one’s own nationals) is followed and this prevents countries from discriminating between their trading partners.
This principle requires that there is transparency in the domestic trade policies of member countries. The member countries are required to sequentially phase out the tariff barriers and non-tariff barriers through negotiations.
With predictability and stability investment is encouraged, jobs are created and consumers can fully enjoy the benefits of competition i.e choice and lower prices.
India and WTO
India is among the founding members of WTO and is often seen as a leader of developing and underdeveloped countries. For developing countries like India WTO is an essential platform where they can mobilize opinion of like minded countries against the selfish designs of the West. WTO provides a forum for such developing countries to unite and pressurize developed countries to make trade fair for poor countries.
India’s Approach at WTO
After the 11th biennial ministerial conference of the WTO in Dec 2017 India saw the outcome as a partial success as none of its offensive interests were achieved, but its defensive interests remained protected. India along with over 100 developing nations including China insisted on finding a permanent solution on public stock holding of food for security but US refused to accommodate the demand and thus a stalemate continues.
The rift between advanced economies and the rest was apparent. Developing countries want Doha Round commitments to be fulfilled before topics of interest to the West such as e-commerce and market access for enterprises are discussed.
India opposed attempts being made by some nations to begin discussions on market access for micro, small and medium enterprises (MSMEs). It is seen as a ploy to indirectly get market access in areas where they are being denied access by arguing that it would benefit MSMEs
Significance of WTO at Present
It is clear that the current trading system under WTO has lost its utility for US and EU. They want a new system by ignoring the current one. Most of Trump’s current actions like raising tariffs directed against China violate WTO rules. The powerful western countries had controlled global trade till the 1980s but are now unable to match the dominance of China in manufacturing. Trump’s actions will lower the significance of WTO.
WTO has lost its significance with US taking unilateral and unplanned actions. India must continue the efforts to pursue the trade interests persistently because after Trump trade may again become more predictable and the spirit of globalization get restored.