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[op-ed snap] Rewiring the WTO


  1. The visit of Roberto Azevêdo, Director General of the WTO to India, from February 8, comes at a juncture when the framework of global trade rules is undergoing a shake-up
  2. The Trans-Pacific Partnership (TPP) — which had almost become the standard bearer of trade rules — has been dealt a death blow by the Trump presidency

Trans-Pacific Partnership:

  1. The TPP found itself in this position after the US orchestrated the move to make the WTO virtually irrelevant during the 10th Ministerial Conference of the organisation, in Nairobi in 2015
  2. The conference ended without a decision on the most important area of work of WTO members — the Doha Round negotiations

Doha Round:

  1. These negotiations were mandated by the Doha ministerial conference in 2001 to review extant trade rules in order to make the WTO more responsive to the needs of the majority of its membership — the developing countries
  2. With the Nairobi ministerial failing to decide on the future of the Doha negotiations, the WTO’s relevance has been questioned since the organisation does not have a work programme

Questioning the relevance of WTO:

  1. The developing world has largely been questioning the relevance of the WTO for some years now, when the richer nations gained the upper hand in setting the priorities for the organization
  2. As a result, the efforts of the developing countries to amend several important agreements and to make them more responsive to their development needs have been seriously undermined
  3. Similarly, issues of critical concern to the least developed countries, especially their inability to increase their presence in the global markets, have also been put on the backburner

Silence on food stockholding:

  1. The skewed rules in the areas of agriculture and IPR have been flagged by the developing countries as their particular areas of concern
  2. In agriculture, WTO rules have been loaded in favour of the developed countries, while the interests of small farmers have almost been completely ignored
  3. India flagged the important issue of food security and argued that the sovereign states must have the right to decide the manner in which the poor should be provided subsidised food
  4. This issue arose after questions were raised as to whether public stockholding of food, which is at the heart of India’s Public Distribution System (PDS), meets the WTO disciplines on agricultural subsidies
  5. After India countered the viewpoints of the countries questioning its PDS, an understanding was reached where even if India breached agricultural subsidies’ disciplines to meet its food security needs, no penal action would be taken against it through what is commonly called a “peace clause”
  6. But India’s insistence that there should be a permanent solution to the problem of public stockholding for food security purposes has been met with deafening silence

Trade facilitation:

  1. This area covers all the measures that countries need to take in order to reduce transactions costs
  2. Trade facilitation was not exactly an area that excited the developing countries for their shares in global trade are at very low levels
  3. Moreover, by accepting the commitments under the agreement, they were required to undertake changes in their customs, procedures and facilities, which seemed a daunting task for many of the poorer countries
  4. The critical element was the availability of financing facilities for undertaking the modifications
  5. However, despite their initial opposition, the developing countries eventually accepted the Agreement on Trade Facilitation at the end of the Bali Ministerial Conference in 2013

Four years later, e-commerce:

  1. In the run-up to the 11th Ministerial Conference to be held in Buenos Aires in December 2017, ground is being prepared by the major economies for another exercise
  2. The issues that have been identified for inclusion in the WTO are electronic commerce and investment
  3. Their inclusion has been supported by the International Chamber of Commerce (ICC) and the B-20 (Business 20, representing the business groups of G-20 countries)
  4. The ICC and B-20 tabled a proposal in September 2016 for the adoption of a “WTO package” on e-commerce
  5. Interestingly, this proposal speaks of promoting micro, small and medium enterprises (MSMEs) through the better adoption of e-commerce
  6. The proposal argues that an effective e-commerce environment would level the playing field between large and small businesses, thus enabling the latter to overcome the hurdles in accessing markets


  1. The ICC-B-20 have proposed that the “package” should also provide capacity building resources to the developing economies, “including targeted assistance to ensure that MSMEs can get online and expand their business through e-commerce”
  2. This approach is similar to the Trade Facilitation Agreement Facility, the window for supporting developing and least-developed countries to implement the Trade Facilitation Agreement
  3. However, the biggest challenge for the WTO is to garner financial resources, since it does not have a financing arm
  4. The WTO Director General has given strong endorsement to e-commerce. He has pointed out that the increase in Internet penetration (43% of the global population) provides the basis for “changing the traditional way of doing business and conducting trade”

It is quite clear that the inclusion of e-commerce and investment in the WTO would further drive the wedge between the rich and the poor nations. The growing disenchantment with the existing model of globalisation has provided a historic opportunity to frame new rules that give equal opportunities to all countries and their citizens in the global marketplace.


An important op-ed for developing an understanding of WTO and its functioning, and a probable question in Mains. Mains 2016 had a question on WTO issue.

WTO pact set to lift world trade by $1 tn. in Trump era

  1. WTO: A trade accord that will boost global exports by $1 trillion should come into force within two weeks
  2. The Trade Facilitation Agreement (TFA): It will have a major impact on poorer countries, because it standardises and simplifies customs procedures, slashing the time, cost and complexity of taking goods over borders
  3. In the WTO’s history, it is the biggest agreement ever reached
  4. Estimates: Once fully implemented, this could have an impact of around 2.7 percentage points on trade expansion throughout the world every year until say 2030, and half a percentage point of GDP growth around the world
  5. Where a product may previously have taken 6-7 weeks to arrive, the waiting time should be cut to a few days

Back2basics: The TFA is important for both prelims and mains.

India rejects attempts by EU, Canada for global investment agreement

  1. India, along with Brazil, Argentina and some other nations, has rejected an informal attempt by the European Union (EU) and Canada to work towards a global investment agreement at the World Trade Organisation (WTO)-level that would incorporate a contentious Investor-State Dispute Settlement (ISDS) mechanism
  2. Why rejected? The ISDS mechanism has become contentious as it permits companies to drag governments to international arbitration without exhausting the local remedies and claim huge amounts as compensation citing losses they suffered due to reasons, including policy changes
  3. Japan also opposed the idea on the grounds of the costs involved in international arbitration
  4. The EU and Canada: Have inked an investment pact that has incorporated the contentious ISDS
  5. They wanted the investment pact to be the template for a similar multilateral agreement


Note the key terms like ISDS mechanism from prelims PoV and the issue as a whole for mains.

Japan threatens to drag India to WTO on steel

  1. What? Japan is threatening to take India to the WTO
  2. Why? Indian trade restrictions that nearly halved Japan’s steel exports to India over the past year
  3. Indian restrictions: India imposed duties of up to 20% on some hot-rolled flat steel products in September 2015, and set a floor price in February 2016 for steel product imports to deter countries such as China, Japan and South Korea from undercutting local mill
  4. This step could trigger more trade spats as global tensions over steel and other commodities run high
  5. Japanese concerns: Such action (dragging dispute to WTO) is rare for Japan as it is the world’s second-biggest steel producer
  6. It typically tries to smooth disputes quietly through bilateral talks, but with global trade friction increasing, Japan’s defence of an industry that sells nearly half of its products overseas is getting more vigorous
  7. Other concerns: Japan is also worried about the more rough and tumble climate for global trade being engendered by incoming U.S. President Donald Trump
  8. It feels that it must make a strong stand for open and fair international markets
  9. Increasing trade disputes: There has been a series of trade disputes over the past few years amid massive exports of cheap steel products from China, the world’s top producer, with Vietnam, Malaysia and South Africa taking or planning measures to block incoming shipments
  10. China’s steel exports dropped by 3.5% in 2016 to 108 million tonnes, still about as much as Japan produces in a year


The issue such as this one and the solar or poultry disputes with US are important to be followed as they develop as there is an explicit topic in Mains GS-3 syllabus on this.

Industry seeks foreign partners for trade pact

  1. India’s top industry bodies are attempting to build a coalition with counterparts in other nations with similar interests to give a fillip to the country’s proposal for a
  2. Trade Facilitation in Services (TFS) Agreement at the World Trade Organisation (WTO)-level
  3. Two leading industry bodies — CII and FICCI — will next month hold a global seminar in Delhi and Mumbai on the topic


What is important here is TFS. Important for both- pre and mains.


  1. The need for TFS: While services occupy a significant and growing share of domestic and international transactions, trade flows in services still remain subject to numerous border and behind-the-border barriers as well as procedural bottlenecks
  2. These impediments particularly limit the benefits of trade in services for small and medium enterprises as well as small exporters worldwide
  3. The TFS Agreement: It is aimed at ensuring that the market access arising out of existing as well as future liberalisation commitments is effective and meaningful
  4. It aims to make it easier for professionals and skilled workers to move across borders for short-term work, as well as ensure portability of their social security contributions
  5. The TFS Agreement will address the key issues pertinent to facilitating services trade, such as transparency, streamlining procedures, and eliminating bottlenecks

‘New issues’ can be included in WTO agenda only after consensus: India

  1. What? India opposed attempts by some developed nations to introduce ‘new issues’ including e-commerce and investment into the formal agenda of the WTO-level negotiations on liberalisation of global trade
  2. Context: Days ahead of a special meeting of trade ministers on the sidelines of the forthcoming World Economic Forum at Davos
  3. Indian position: It may be alright to have informal and non-binding discussions on these ‘new issues’
  4. But unless there is consensus among all the WTO member countries, these issues cannot be made part of the formal agenda and currently there is no consensus for such a move
  5. Earlier stance: India had on earlier occasions too rejected the attempts of the developed world to make such ‘new issues’ part of the ongoing Doha Round talks
  6. Why opposition? It will ‘dilute’ the ‘development agenda’ of the negotiations
  7. Other issues: Besides pushing for progress in outstanding issues including those related to food security/sovereignty, India is also demanding that there should be formal discussions at the WTO-level on its proposal on a Trade Facilitation Agreement (TFA) in Services
  8. The TFA in Services: Among other things, it envisages easier temporary movement of skilled workers to boost global services trade


For mains, remember the demands by India for various negotiations. For prelims, keep in mind terms like TFA in Services, Doha Development Agenda


Doha Development Agenda:

  1. To take the trade negotiations to further level, Doha Development Round or Doha Development Agenda (DDA) commenced in November 2001
  2. The overall objective is to lower trade barriers around the world, which would help facilitate the increase of global trade
  3. The Uruguay round had already included many agreements on vital issues such as trade in agriculture and trade in services
  4. The agenda in Doha Round was to expand the agriculture and services talks to allow trade-offs and thus achieve greater trade liberalization
  5. The main negotiating issues and the key elements from India’s perspective in the Doha Round are: Agriculture, Non-Agricultural Market Access, Services Trade, TRIPS

India to put pressure on WTO to focus on food security issues

  1. What: India has decided to increase pressure on the WTO to expedite negotiations on food security matters to ensure that these are not thrust to the background at the next Ministerial meet in Buenos Aires in Dec
  2. All issues related to food security were ignored at the last Ministerial meet in Nairobi two years ago with the excuse that members held divergent positions
  3. New Delhi will also have to work out how to ensure the continuation of the on-going Doha round of talks, with several development issues on the agenda
  4. Many developed countries want it to be scrapped
  5. India and other members of the G-33 group of developing countries in agriculture have been trying to push the WTO into starting work on a special safeguard mechanism (SSM)
  6. This is to protect farmers in developing countries and a permanent solution to the public stockholding programme for a while
  7. However, influential members such as the US and the EU, have not shown any interest in speeding up negotiations
  8. At the Nairobi Ministerial meet, all members agreed to work on a SSM for developing countries that would enable them to raise import duties on agriculture items
  9. This was in case imports rose steeply or there was a sharp fall in domestic prices
  10. The Nairobi declaration also stated that meetings must be held in an “accelerated time frame” to arrive at a permanent solution to the problem of public stock-holding which is necessary to avoid a situation when such programs get penalised


The Doha Development Agenda, more often referred to as the Doha round trade talks, is the latest cycle of negotiations under the umbrella of the WTO. There have been nine rounds of multilateral trade talks since the end of the second world war, but the Doha round is the first to focus on helping developing countries join the global marketplace, and boost their economies as a result. The round was launched in November 2001 – and it’s still not over.

‘H1B visa row in WTO may lead to trade retaliation against US’

  1. Source: Report by the US Congress
  2. Context: It comes months after India dragged the U.S. to the WTO over imposing increased fees on H-1B and L-1 visas
  3. Reason for WTO case: Against the US’s measures imposing increased fees on certain applicants for L-1 and H-1B visa categories
  4. India has stated that the move would impact Indian IT professionals
  5. India has alleged that the U.S. is violating its obligations under General Agreement on Trade in Services (GATS), a binding agreement for all WTO member countries
  6. It also violates the GATS Annex on Movement of Natural Persons Supplying Services, to not discriminate against or between non-U.S. service providers
  7. Findings of US Congress Report: One potential outcome could be a WTO determination that the disputed statutes are inconsistent with GATS obligations
  8. It could result in a WTO recommendation that the U.S. should modify its laws to comply with the GATS
  9. In such a scenario compliance procedures could subject the US to WTO-authorised trade retaliation if Congress does not amend the pertinent laws
  10. About India’s case: This appears to be the first time a WTO member has formally filed a dispute challenging the immigration laws of another member as a violation of the GATS
  11. While the fee hike does not specifically mention Indian companies, such a provision has been tailored in such a manner that it impacts only Indian IT companies
  12. India contends, among other things, that the 2010 and 2015 fee increases do not comply with “most-favoured-nation (MFN) treatment” under the GATS
  13. This provision generally prohibits a WTO member from treating the services and service suppliers of one WTO member less favorably than it treats comparable services and suppliers of another


These issues related to international trade, and involving the WTO are very important. Keep a note of such developments.

India reports fishery subsidies; aims to protect ‘poor’ fisherfolk

  1. Event: India has notified the WTO on the subsidies it pays fisherfolk
  2. Context: Demands from a U.S.-led group of nations for a ban on subsidies given for illegal, unregulated and unreported (IUU) fishing
  3. India has expressed concern over committing to norms at the multilateral level that will impact the livelihood of its subsistence fisherfolk
  4. The filing shows subsidies worth Rs.284 crore in 2014-15, and they mainly aim to “protect and secure the livelihood of traditional and poor fishing communities”
  5. The ban on IUU fishing could harm the interests of lakhs of subsistence fisherfolk in poor and developing nations
  6. The group, called ‘Friends of Fish’, is not targeting the subsidies given by the U.S., which among other sectors also benefits its fishing industry, to be banned
  7. According to the UN FAO’s ‘State of World Fisheries and Aquaculture’, almost a third of commercial fish stocks are now fished at biologically unsustainable levels


This news shows how international fora and environmental norms can be used to benefit developed nations at the cost of developing nations like India.

India is ‘non-committal’ on market economy tag for China II

  1. Solution: To refuse China the ‘MES’, India has taken sides with the U.S. and European Union
  2. Their stand is that in ‘market economies’ where prices of items are market determined (based on demand & supply conditions)
  3. But, there is still a significant government influence in the Chinese market
  4. The intention will be to ensure India’s manufacturing sector is not hit by unfairly priced Chinese goods
  5. Several nations that have a strong manufacturing base are concerned about according MES to China
  6. While nations in Africa and Latin America — dependant on Chinese investments to boost manufacturing — are inclined to grant MES to China

India is ‘non-committal’ on market economy tag for China I

  1. Issue: Beijing has said WTO member countries must fulfil their promise to deem China a ‘market economy’ from Dec 2016
  2. Reason: Provisions in the ‘Protocol on the accession of China to the WTO’ in 2001
  3. But India is not inclined to automatically grant the coveted ‘Market Economy Status’ (MES) to China this Dec under WTO norms
  4. Reason: Granting MES to China will severely curb the ability of nations including India to impose anti-dumping duties on “unfairly priced” Chinese imports
  5. Of the 535 cases where anti-dumping duties were imposed by India during 1994 to 2014, a maximum of 134 has been on goods from China

What is Most Favoured Nation status?

  1. The MFN principle is a part of the WTO’s General Agreement on Tariffs and Trade (GATT), to which India is a signatory
  2. MFN: Each of the WTO member countries should treat all the other members equally as most-favoured trading partners
  3. In the words of WTO, ‘Grant someone a special favour (such as a lower customs duty rate) and you have to do the same for all other WTO members’
  4. Hence, though MFN sounds like special treatment, in effect it means non-discrimination

The terms ‘Agreement on Agriculture’, ‘Agreement on the Application of Sanitary and Phytosanitary Measures’ and Peace Clause’ appear in the news frequently in the context of the affairs of the: [Prelims 2015]

a) Food and Agriculture Organization
b) United Nations Framework Conference on Climate Change
c) World Trade Organization
d) United Nations Environment Programme

What is Doha Development Agenda

  1. The latest round of trade negotiations among the WTO members started at Doha in 2001.
  2. The negotiation at this round is also known as the Doha Development Agenda.
  3. Aim – To sign a pact to open up world trade by lowering or eliminating trade barriers.
  4. It will help in improving the trade prospects of developing and poor countries, and remove the distortions in world trade.

Indian agenda for Oslo meet

  1. India is preparing to take the lead in WTO-level talks to open up global services trade
  2. Aim: Especially to ensure easier movement of skilled professionals for short-term projects overseas
  3. Services TFA: In this regard, India is working on a formal proposal to be submitted soon before the WTO on a ‘Trade Facilitation Agreement (TFA) in Services’
  4. Why Services TFA? India has a strong services sector and a huge pool of skilled professionals & would be hugely benefitted from such agreement
  5. Background: India had informally pitched for a WTO-level ‘TFA in Services’ at the Organisation for Economic Co-operation and Development ministerial council meeting in Paris in June
  6. The ‘TFA in Services’ proposal, similar to the WTO’s TFA for Goods (aimed at easing customs norms & boosting global merchandise trade), was then welcomed by Azevêdo and several trade ministers

The ‘new issues’ in the world trade

  1. Context: The Oslo meeting of finance ministers is likely to discuss the so-called ‘new issues considered important by the rich nations in today’s global trade
  2. The New Issues include:
  • Clean energy: Efforts to reach an agreement at the WTO-level to eliminate tariffs on environmental & sustainable goods produced using clean & green energy
  • E-commerce
  • GVCs: Global Value Chains & promotion of supply chains
  • Brexit: Its impact on global trade

A background to the trade ministers’ meet

  1. WTO’s Trade Report: The high-level political convergence comes against the backdrop of WTO Director-General Roberto Azevêdo’s statement last month in his ‘Mid-year Report on Trade-related Developments’
  2. The report showed a worrying rise in the rate of new trade-restrictive measures put in place each month (by WTO member countries)- hitting the highest monthly average since 2011
  3. The world trade growth is likely to remain below 3% in 2016, making it the fifth consecutive year of sub 3% expansion
  4. Doha issues: The meet is also being planned at a time when the progress in the WTO’s nearly 15-year-old Doha Round negotiations is seen to be very slow’
  5. Why slow? It especially due to the perceived ‘disengagement’ of the U.S. that is going in for Presidential elections in November

Amid growing protectionism, global trade ministers to meet in Oslo

  1. What? Trade ministers from many WTO members will gather at the Norwegian capital, Oslo, in October
  2. Why? To discuss the need for further liberalisation of global trade amid growing protectionism
  3. It will also deliberate upon the WTO’s future role in the context of ‘new challenges‘ for the global trading system and some ‘troubling’ international political developments

What are Global Value Chains?

  1. In GVCs, the different stages of the production process are located across different countries to optimise production
  2. Globalisation motivates companies to restructure their operations internationally through outsourcing and offshoring of activities
  3. The whole process of producing goods, from raw materials to finished products, is increasingly carried out wherever the necessary skills and materials are available at competitive cost and quality
  4. The past decades have witnessed a strong trend towards the international dispersion of value chain activities such as design, production, marketing, distribution, etc.
  5. Example: Surat (India) is famous for its diamond cutting and polishing industry and Russia is the highest producer of diamonds
  6. In this case, diamonds will be mined in Russia and then rough diamonds sent to Surat and after polishing here, they’ll be sent for sale worldwide in high value diamond markets like USA

What’s the issue with GVCs?

  1. Multinational firms mostly based in developed countries use GVCs spread across the world for their production network through a chain of contract manufacturers, suppliers and logistics providers
  2. Developing countries fear that in the garb of formulating GVC rules under WTO, developed countries will force them to bring down tariff rates, set new investment and labour standards
  3. These could be detrimental to their interest

India reconsiders opposition to new trade issues at WTO

  1. Reason: Understanding that it can’t keep on opposing such issues for too long
  2. New trade issues: Such as global value chain (GVC) and e-commerce
  3. Background: India has so far maintained that member-countries must conclude the long-pending Doha Development Round of the WTO before taking up any new issues for negotiations

Recent India-US trade disputes – WTO

  1. Ban of poultry imports from US – India lost the case
  2. Solar panel case (Domestic Content Requirements) – India lost the case
  3. Increased visa fees by the US – consultations are going on currently

What is there in the Peace Clause?

  1. No WTO member can drag any developing country to Dispute settlement mechanism of WTO for violation of De-minimus limits in AoA
  2. This is, provided that the said developing country is paying subsidies for staple foodcrops or for public stockholding program or for food security purpose
  3. And also that it is providing annual information of its food security Program to WTO
  4. Permanent solution will be taken no later than 11th ministerial conference int December 2017

What is Bali Package?

  1. In December 2013, 9th WTO ministerial conference was held at Bali, Indonesia
  2. Bali Package is the collection of three prime outcomes of this summit
  3. Trade facilitation agreement: To cut down the red tape in customs clearance
  4. LDC exports: Exporters from Least developing countries, will get Duty free, quota free (DFQF) access to markets in foreign countries
  5. Food stockholding: As per the original Agreement on agriculture (AoA), the developed and developing countries have to keep their Amber box subsidies within De-minimus level i.e. 5% and 10% of their agriculture production in 1986-88 respectively
  6. India opposed this base year and limits, because it would make impossible to implement the food security programs for the poor and MSP for the farmers
  7. Therefore, as a measure of temporary relief, Bali summit enacted a peace clause for the AoA

Other issues at WTO

  1. India also reiterated taking up of the remaining Doha Development Agenda (DDA) issues including agriculture before taking up of new issues at WTO
  2. Aim: To improve the trade prospects of developing and poor nations
  3. Remaining DDA issues: Special Safeguard Mechanism (SSM) & public stockholding of food grains for food security purposes
  4. SSM: For developing countries to counter import surges of farm items
  5. India also emphasised on the need for implementing the WTO’s Bali and Nairobi Ministerial decisions
  6. These issues will lay the foundation for the outcomes of the WTO Ministerial Conference in 2017

TFA in Services- a background

  1. India had proposed the TFA in Services after the December 2015 WTO ministerial conference in Nairobi (Kenya)
  2. The proposed TFA in Services is on the lines of the WTO’s TFA on goods that is aimed at easing customs rules to expedite trade flows
  3. India has already ratified the TFA on goods
  4. Services: Account for over half of India’s GDP

WTO welcomes TFA proposal

  1. WTO has welcomed India’s proposal for a Trade Facilitation Agreement (TFA) in Services
  2. Proposal: Easier temporary movement of skilled workers to boost global services trade
  3. The proposal was reiterated during the informal meeting of trade ministers from 25 WTO member countries on the sidelines of OECD ministerial council meeting in Paris
  4. WTO also emphasised on working on Trade Facilitation in Services including Mode 4
  5. Mode 4: It pertains to temporary movement of natural persons including skilled workers

Need for capacity building in WTO issues

  1. Issue: There are only a few Indian law firms in trade law practice
  2. Therefore, to handle India’s trade disputes with other countries, the govt has been engaging both international and Indian law firms
  3. However is would be desirable to see an increase in the number of Indian experts
  4. Then govt can rely entirely on local firms to deal with such issues
  5. Step: Commerce ministry is trying to build capacity to comprehensively track the trade restrictive measures taken by other countries, especially those that hurt India’s exports


Importance of non-issues at WTO and capacity building

  1. India has been advocating that certain issues, including labour and environment, must be kept out of the WTO’s purview
  2. Instead, they should be dealt with by the global bodies concerned such as the International Labour Organisation and the United Nations Framework Convention on Climate Change
  3. However, developed countries want that the WTO should address global trade’s new challenges including labour and environment

Non-trade issues at WTO, lack of legal experts worry India

  1. What? Developing nations, including India, are facing a double disadvantage at WTO’s (WTO) Dispute Settlement Body (DSB)
  2. Disadvantages: Lack of a sufficient pool of trade law experts to represent them effectively and also certain efforts to bring within ambit non-trade issues such as labour and environment
  3. Non-issues: Labour and environment issues would pose a great challenge for developing nations
  4. Why? Because very often these are conditions that add as restrictions in the freedom of trade particularly for developing countries

India-US fight over GATS Mode 4

  1. Context: US opposed India’s proposal named “Mode 4: Assessment of Barriers” at WTO
  2. What? It aimed at a comprehensive discussion on growing regulatory barriers in the movement of natural persons under Mode 4 of GATS
  3. Ground: That India is already pursuing a trade dispute on the same issue against Washington
  4. Many developing countries strongly supported India’s proposal because it is important to address this issue for their growing services sector

What is Mode 4 under GATS?

  1. Under the General Agreement on Trade in Services (GATS), services can be traded internationally in four different ways — known as the four modes
  2. Mode 4: Refers to the presence of persons of one WTO member in the territory of another for the purpose of providing a service
  3. It does not concern persons seeking access to the employment market in the host member
  4. Also, it does not affect measures regarding citizenship, residence or employment on a permanent basis

India takes on U.S. at WTO over visa rules

  1. News: India has filed a complaint to WTO against U.S over its measures raising fees on some applicants for temporary work visas, mostly involving tech sector
  2. India’s notification: The U.S. measures are not consistent with Washington’s commitments to accept services from other countries
  3. Context: Some Indians receive unfair treatment compared with Americans in U.S in providing similar services in sectors like computer services
  4. U.S. response: The U.S. visa program, which was recently updated on a bipartisan basis by Congress, is fully consistent with our WTO obligations
  5. Indian move is unusual at the WTO, where most disputes involve goods, tariffs and restrictions, not services

Learn about Dumping

  1. Dumping is an unfair trade practice which occurs when goods are exported at a price lower than their normal value
  2. Generally, this results in goods being sold in another country for less than their price in the original market or at less than production costs
  3. It seeks to distort international trade and cause injury to the domestic manufacturers of the goods in the importing country
  4. To prevent this, a non-tariff barrier may be implemented, called an anti-dumping duty

India studying impact of market economy status for China

  1. Context: There are chances of China being granted Market Economy Status under WTO norms
  2. Background: The 2001 agreement (Protocol on the accession of China to the WTO), according to which the WTO member nations could ignore selling price and production costs in China for 15 years
  3. Impact: WTO-member countries would have to consider China as a ‘market economy’ while adjudicating anti-dumping cases
  4. Challenge: India has extensively used anti-dumping provisions to offset the losses caused to the local manufacturers due to dumping
  5. It will severely limit India’s ability to resort to anti-dumping
  6. Criticism: There is a significant govt influence in China that in turn causes distortions in international trade

Learn more about Trade Facilitation Agreement (TFA)?

  1. Background: In Dec 2013, WTO members concluded negotiations on a TFA at the Bali Ministerial Conference, as part of a wider “Bali Package”
  2. Aim: A trade protocol aiming to give a spur and do away with the stumbling blocks in doing international trade between various countries
  3. Deadline: to sign the agreement is July 31 and the deal has to come into force fully by 2015
  4. Expert opinion: Deal could add $1 trillion to global GDP and also can generate 21 million jobs by slashing red tape and streamlining customs
  5. Developing countries’ concern: WTO to discuss and allay concern on food subsidy and stockholding, which is a lifeline for lakhs of BPL people

Cabinet approves Trade Facilitation Agreement (TFA)

  1. Context: Cabinet has approved, Proposal for Notification of Commitments under the TFA of WTO
  2. Relevance: Ratification and acceptance of the Instrument of Acceptance of Protocol of TFA to the WTO Secretariat and constitution of the National Committee on Trade Facilitation (NCTF)
  3. TFA provisions: Expediting the movement, release and clearance of goods, including goods in transit
  4. Measures for: effective cooperation between customs and appropriate authorities on trade facilitation and customs compliance issues
  5. These objectives are in consonance with India’s “Ease of Doing Business” initiative
  6. Condition: TFA shall enter into force for the notified members upon acceptance by two-third WTO Members
  7. Way ahead: A NCTF would be set up under Department of Commerce

India to pitch for TFA in services

India will pitch for a trade facilitation agreement (TFA) in services at the WTO has huge potential and it contributes significantly to the country’s economy.

  1. TFA in services means liberalised visa regime such as multiple entry visas, visa-free travel for foreign tourists and long term visas for business community.
  2. In RCEP negotiations, India wants a comprehensive agreement in goods, services and investments.
  3. India is very strong in the services area as the sector contributes over 50 per cent in the country’s economic growth.
  4. To boost services exports, the ministry is already working on some reform measures in sectors including education and legal.

India to counter ‘non-issues’ at WTO talks

In Regional Comprehensive Economic Partnership (RCEP) talks, India will state that the focus should be on expeditiously concluding discussions on the goods, services and investment chapters of pact.

  1. The government is firming up a strategy to prevent ‘attempts’ by rich nations to introduce ‘new pro-corporate issues’.
  2. Such as global value chains, digital economy, labour and climate-related trade into the WTO deliberations and negotiations on mega free trade agreements.
  3. The outstanding issues include an effective ‘Special Safeguard Mechanism’ and a permanent solution for the issue of public stockholding for food security purposes.
  4. India will state at the WTO that any country pitching for the introduction the ‘new issues’ will first have to ensure that they meet two criteria.
  • To establish the relevance of these issues in the context of trade.
  • To ensure that there is a consensus among all 162 WTO member countries in taking up such an agenda.

India seeks to lead developing nations at WTO

A “collaborative approach” with African countries would be central to India’s future strategy at the WTO.

  1. India plans to play a leadership role at the WTO negotiations to boost the trade prospects of the developing and poor nations.
  2. To forge strong alliances on the “development agenda” of the WTO’s ongoing Doha Round of talks.
  3. Government will hold a series of “strategy workshops” of stakeholders, inter-ministerial and Centre-state discussions in addition to summits with African countries.
  4. To take a deep dive on the outstanding issues [of the ongoing Doha Development Round talks of the WTO] and come up with an initial game plan.

Lets know about Export competition

  1. According to WTO, it refers to elimination of agricultural export subsidies, new rules for export credits, international food aid and exporting state trading enterprises.
  2. WTO wants to reform programme on export competition.
  3. It will include the commitments to reduce subsidized export quantities, and the amount of money spent subsidizing exports.

WTO discussions deadlocked

  1. India has said that an instrument similar to SSM is already available to mostly the developed countries for over 2 decades.
  2. The draft text says that work on a SSM shall be pursued taking account of proposals by the WTO Member countries.
  3. It shall be in the broader context of agricultural market access.
  4. The text also says that the WTO’s General Council shall regularly review progress on SSM negotiations.
  5. The text mentions that the negotiations on the issue of public stockholding for food security purposes shall continue to be pursued as a priority.

India opposes rich nations’ attempts to cherry-pick farm issues

Against bid to link deal on farm export subsidies to Special Safeguard Mechanism.

  1. India has called for a balanced outcome in negotiations on agriculture including an agreement on Special Safeguard Mechanism (SSM).
  2. A simplified proposal on SSM had been submitted and asked WTO Chair on Agriculture negotiations to speedily work on this.
  3. India has already rejected claims by rich countries that there is a broad consensus for a deal during the WTO’s meet on getting rid of farm export subsidies.
  4. India had sought additional flexibility for developing countries so that they can provide such more subsidies on some products, while reducing subsidies on other products.

Let’s know about Special Safeguard Mechanism (SSM)?

  1. It’s a trade remedy that allow the developing countries to temporarily hike duties to counter the import surge and price falls in farm products.
  2. Higher safeguards duties can be triggered automatically when import volumes rise above a certain level, or if prices fall below a certain level.
  3. It is not necessary to demonstrate that serious injury is being caused to the domestic industry.

No bargain on protection of poor farmers’ interests: India

India has made it clear that protection of poor farmers’ interests and its food security programmes are not up for any bargain at the negotiations.

  1. India will not compromise on the need for a permanent solution, for the issue of public stockholding for food security purposes.
  2. India wants the WTO members to take up on a priority basis the issue of a Special Safeguard Mechanism (SSM).
  3. Brazil, being a leading agricultural exporter, wanted more market access for its farm items in return for supporting the SSM proposal, a demand that did not go down well with India.
  4. The developed countries, citing the slow progress in Doha Round negotiations.
  5. They want the Round to be brought to close or expand the ambit of the negotiations by including ‘new’ issues of their interest.

What are the benefits of being classified as ‘developing country’ at WTO?

  1. The WTO mandates special and differential treatment (S&DT) to developing countries.
  2. It includes giving longer time periods for implementing WTO agreements and commitments in addition to provisions safeguarding their trade interests.
  3. WTO does not define what constitutes a ‘developing’ or ‘developed’ country, and allows its members to decide for themselves.
  4. However, WTO recognises least developed countries as designated by the UN.

India rejects rich world’s attempt to create divisions

  1. India will oppose the developed world’s attempts to ask developing countries with relatively higher growth to commit to greater and faster market access.
  2. The world’s rich countries wants ‘differentiated’ treatment of developing countries.
  3. The countries with higher growth such as India and China can be categorised differently from the other developing countries.
  4. India’s WTO agenda also includes that the developed countries substantially reduce their trade distorting subsidies.

India rejects ‘artificial deadlines’ for WTO deal

Opposes rich nations’ attempts to introduce ‘new’ issues.

  1. India has said it will neither agree to ‘artificial deadlines’ to conclude the WTO’s Doha Round negotiations.
  2. Aimed at liberalising global trade, nor concur with rich nations’ attempts to expand the ambit of the talks by introducing “new” issues without completely fulfilling the Round’s ‘development’ dimension.
  3. The Doha Round talks had begun in 2001 and has since missed several deadlines for concluding it.
  4. Due to persisting differences between the developed and developing world on a host of issues related to trade liberalisation and granting market opening commitments.

The ‘new’ issues pertain to labour practices, environmental standards, global value chains, e-commerce, competition and investment provisions, transparency in government procurement.

What is Trade Facilitation Agreement?

  1. It is a trade protocol aiming for expeditiously moving goods across borders inspired by the best practices from around the world.
  2. It also sets out measures for effective cooperation between customs and other appropriate authorities on trade facilitation.
  3. The Agreement is expected to reduce total trade costs by more than 14% for low-income countries and more than 13% for upper middle-income countries by streamlining the flow of trade across borders.
  4. The TFA will enter into force once two-thirds of members have completed their domestic ratification process.

India may ratify WTO trade facilitation pact

India is likely to ratify the WTO’s Trade Facilitation Agreement(TFA), aimed at easing customs rules to expedite trade flows.

  1. But, India might not not use all available flexibilities in the TFA to determine the timing of implementation of various commitments.
  2. It is part of the govt’s initiatives to attract more investment by improving India’s ranking in the World Bank’s “ease of doing business” report,
  3. The items which are still unresolved include finding a permanent solution to the issue of public stockholding for food security purposes as well as measures to protect poor farmers from sudden import surges of farm products.

At WTO talks, India to oppose bid at dilution

At Nairobi meet, New Delhi will resist efforts to create divisions among developing nations.

  1. India is likely to oppose efforts by rich countries to dilute ‘development’ dimension of the Doha Round negotiations, which are aimed at reaching an agreement to liberalise global trade.
  2. Some developed countries attempted to categorise nations such as India (now ‘developing’) as ‘emerging economies’.
  3. By making “unsubstantiated” allegations that such ‘emerging economies’ were cornering the benefits meant for developing countries.
  4. Members can apply the principle of ‘self-election’ and themselves decide if they are to be labelled as ‘developing’ countries.
  5. Significantly, there are attempts by the rich countries to “redefine developmental aspects” of the Doha Development Agenda negotiations.

Let’s know more about WTO?

  1. The World Trade Organization is the only global international organization dealing with the rules of trade between nations.
  2. It was signed by 123 nations on 15 April 1994, replacing the General Agreement on Tariffs and Trade.
  3. The goal is to help producers of goods and services, exporters, and importers conduct their business.
  4. It deals with regulation of trade by providing a framework for negotiating trade agreements and a dispute resolution process.

WTO lowers world trade growth estimate

World Trade Organisation (WTO) revising its projections for growth in world trade downwards.


  1. Earlier, WTO had predicted a subdued recovery in world trade growth was estimated to improve from 2.8 per cent in 2014 to 3.3 per cent in 2015.
  2. Commerce Ministry had an ambitious target of double India’s exports in goods and services from $465 billion to $900 billion over five years.
  3. There certainly can be a case for short-term ameliorative measures.
  4. Some of the major export sectors are employment-intensive and if they suffer, this will have a bit of a domino effect.
  5. Trade policy says, need to move away from subsidies and addressing challenges relating to procedural hurdles, transaction costs and infrastructure deficits.

India wants answers on EU Ban of GVK Drugs

  1. Nirmala Sitaraman said it was improper for EU to take a unilateral step in banning the drugs from India.
  2. Our trader talks on EU-India FTA are in limbo because of this impasse.
  3. But EU has maintained that the issue stems from Hyderabad-based GVK providing them inaccurate data.
  4. India might also roll out the National Intellectual Property Rights (IPR) law. Cabinet talks going on.

WTO strikes ‘landmark’ IT trade deal


  1. The deal will update the 18-year-old IT Agreement and add 200 products to the zero tariff list.
  2. The deal will cut tariffs on $1.3 trillion worth of technology products besides creating jobs and adding to the global GDP.
  3. The benefitting products range from advanced computer chips to GPS devices, medical equipment, printer cartridges and video-game consoles
  4. This deal alongwith the Trade Facilitation Agreement from Doha Round will boost the global liberalized trade system.

US may force India to slash farm subsidies

US has declared special and differential treatment (S&DT) a “threshold” issue, implying that all developing countries will not be treated on a par with regard to farm and fisheries subsidy programmes.

What this means is that Washington wants China and India to be treated separate from other developing countries—regardless of their hundreds of millions of poor farmers and fishermen—with regard to commitments on farm and fisheries subsidies in the Doha Development Agenda (DDA) trade negotiations.

[op-ed snap] India’s upcoming WTO challenges

  1. India and the US are on the cusp of cementing relations on several fronts but not on the ground of trade agreements @ WTO.
  2. Washington has pointed a finger at the continued barriers, largely in 2 sectors – agriculture and intellectual property protection – in India.
  3. US raised 3 sets of concerns about Indian agriculture policies – India’s “unpredictable” tariff policies, India’s unscientific and unjustifiable import barriers on agricultural products & India’s farm subsidies.
  4. US has been on the path of projecting China and India as the untold-subsidy-villains.
  5. Will the Modi government stand up for its poor farmers? That is the test it would face at Nairobi.

India loses poultry case against United States at WTO

  1. WTO’s Dispute Settlement Board (DSB) ruled that India’s ban on import of poultry meat, eggs and live pigs from US is inconsistent with the international norms.
  2. These poultry products were banned as a precautionary measure to prevent outbreaks of Avian Influenza and bird flu fears.
  3. With this WTO ruling, US which is one of the world’s largest exporters of chicken meat will be able to export their poultry products to Indian market without any trade barriers.

India challenges WTO’s reversal on Poultry ban from US

  1. Back in 2007, India had invoked the SPS (Sanitary and Phytosanitary Measures) agreement clause of WTO and banned US poultry import.
  2. SPS is a treaty under WTO relating to food safety, animal and plant health (phytosanitation) wrt imported pests and diseases.
  3. US challenged that and won against India. India will now move to the DSB (Dispute Settlement Board) of the WTO.

:( We are working on most probable questions. Do check back this section.

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