WTO and India

Shift in the US trade politics and opportunities for India


From UPSC perspective, the following things are important :

Prelims level : WTO

Mains level : Paper 3- Changes in trade politics in the US and opportunities for India.

The article focuses on the changes in the US trade politics fueled by the corona pandemic. Also there has been a growing demand for abandoning the WTO. So, amid this shift in the US politics, what are the opportunities for India at the global level?

What went wrong with the WTO: The US point of view

  • Latest opposition to the WTO was expressed in a forceful article by a US senator, Josh Hawley.
  • In his opinion, corona pandemic expresses the hard truth about the modern global economy: it weakens American workers and empowers China’s rise.
  • So, what went wrong?
  • Capital and goods moved across borders easier than before but so did jobs. And too many jobs left America’s borders for elsewhere.
  • As factories closed, workers suffered, from small towns to the urban core.
  • So, he wants US to abandon the WTO.

Rise of trade politics in the US

  • Under Trump, the Republican Party has turned from the champion to a critic of free trade.
  • The Democratic Party, which embraced globalisation since the early 1990s, has seen the erosion of working-class support.
  • Elections this year could reveal if the shifting alignments on trade are now cast in stone or if anti-trade sentiment in America is deep and wide.

What alternatives are suggested by the senator?

  • In replacing the WTO, Hawley suggests the following two measures-
  • 1) The United States must seek new arrangements and new rules, in concert with other free nations, to restore America’s economic sovereignty.
  • 2) This, in turn, involves building a new network of trusted friends and partners to resist Chinese economic imperialism.

How this matters for India?

  • India will have to take a fresh look at the global economy battered by the coronavirus.
  • India should pay close attention to Hawley’s theme on working with “trusted friends and partners” to restructure international trade.
  • Hawley is not alone in articulating this view.
  • Reuters reported from Washington that the Trump Administration is “turbocharging” an initiative to rearrange the global supply chains currently centered on China.
  • This rearrangement of the global supply chain offers an opportunity for India to lead the future global supply chains.

Consider the question, “Critically analyse the opportunities presented to India by the changes in trade politics in the US”.


Hobbled as it was by shaky political coalitions and preoccupied by multiple domestic challenges, India in the mid-1990s struggled to cope with the profound changes in the global economic order. As the world trade system arrives at a contingent moment a quarter of a century later, India is hopefully better prepared.

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