Central Idea

• India has stressed the urgent need for prioritizing reforms within the World Trade Organisation (WTO).
• India has been advocating for WTO reforms and improved dispute settlement mechanisms during G20 discussions.

About WTO

Prioritizing WTO Reforms

• India’s Push for Reforms: India has been actively advocating for reforms within the World Trade Organisation.
• Better Dispute Settlement Mechanisms: Alongside reforms, India is pushing for improved dispute settlement mechanisms within the WTO.
• Reaffirming Foundational Principles: The discussions aim to reaffirm the principles enshrined in the Marrakesh Agreement and the multilateral trade agreements, emphasizing the importance of an open, fair, inclusive, and transparent WTO.

Reforms that India is seeking

• Structural Reforms: There is an urgent need for reforms within the WTO to address issues such as transparency, shorter time frames, the establishment of a permanent panel body, and special and differential treatment for developing countries.
• Benefit for Developing Countries: Developing countries, including India, can benefit from these reforms if proposals specific to their needs are accepted.
• Trade Facilitation for Services: While the WTO has made progress with the Trade Facilitation Agreement (TFA) concerning goods, there is a need for reforms in trade facilitation for services. India, as a major service provider, stands to benefit from improved cross-border movement of people.
• Inclusivity: It is crucial to establish procedures and practices that are more inclusive, particularly for developing countries.
• Peace Clauses: Adoption of “peace clauses” for developing countries’ implementation of current agreements can formalize commitments by major trading powers to allow grace periods and exercise due restraint.
• Evolving Negotiation Modes: The single package approach used in the Uruguay Round is not effective in the Doha Round, necessitating the exploration of new negotiation modes.
• Strengthened Dispute Settlement Mechanism: The dispute settlement mechanism within the WTO requires strengthening and expediting to enhance its effectiveness.
• Separation of Political and Human Rights Issues: There is a need to separate political and human rights issues from trade disputes under Sanitary and Phytosanitary (SPS) norms.

Crossroads for WTO

• Stalled Multilateral Trade Negotiations: The multilateral trade negotiations, including the Doha Round, have reached an impasse, with limited progress in overall rule-making.
• Challenges from Alternative Trade Pacts: Alternative trade pacts, such as mega-regional arrangements, have emerged and posed challenges to the position of trade multilateralism.
• Disagreements on Market Access and Protection: The impasse in the Doha Round primarily stems from differences between highly industrialized countries and large developing countries regarding market access and protection of vulnerable economic sectors.

Importance of Addressing WTO Reforms

• Vital Role of WTO: The Minister emphasized that addressing WTO reforms is of utmost importance as the organization plays a crucial role in ensuring fairness and transparency in global trade.
• Backbone of Multilateral Trading System: The WTO forms the backbone of the multilateral trading system and its reforms are necessary to strengthen its functioning.

India’s Aspirations in International Trade

• Global Leadership Ambition: India has expressed India’s aspiration to emerge as a global leader in the international trade landscape.
• E-commerce Market Potential: India is poised to become the world’s second-largest e-commerce market, reflecting its transformation driven by open markets, global integration, and a strong entrepreneurial spirit.

Way Forward

• The urgent need for WTO reforms necessitates concerted efforts and global attention to ensure the fairness, transparency, and effectiveness of the multilateral trading system.
• India’s active participation in advocating for reforms, along with its ambition to become a global leader in international trade, reflects its commitment to fostering a thriving and inclusive global trade environment.
• It is essential for countries to collaborate and engage in constructive dialogue to address the challenges and opportunities in the evolving global trade landscape.

Back2Basics: WTO Agreements and Accords

• General Agreement on Tariffs and Trade (GATT): The GATT is the predecessor to the WTO and was in effect from 1948 to 1994. It aimed to reduce trade barriers and promote international trade through negotiations and tariff concessions.
• Agreement on Agriculture (AoA): This agreement aims to establish fair and market-oriented agricultural trading systems. It addresses issues such as market access, domestic support, and export subsidies related to agricultural products.
• Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS): The TRIPS agreement sets minimum standards for protecting intellectual property rights, including patents, copyrights, trademarks, and trade secrets.
• Agreement on Trade-Related Investment Measures (TRIMs): This agreement prohibits certain investment measures that restrict trade or are inconsistent with the GATT’s principles.
• Agreement on Sanitary and Phytosanitary Measures (SPS): The SPS agreement sets out rules for food safety and animal and plant health standards to ensure that countries do not use sanitary and phytosanitary measures as unjustified trade barriers.
• Agreement on Technical Barriers to Trade (TBT): The TBT agreement aims to ensure that technical regulations, standards, and conformity assessment procedures do not create unnecessary obstacles to trade.
• Agreement on Subsidies and Countervailing Measures (SCM): The SCM agreement regulates the use of subsidies and provides a framework for countervailing measures to address unfair trade practices arising from the use of subsidies.
• Trade Facilitation Agreement (TFA): The TFA aims to simplify and streamline customs procedures, enhance transparency, and improve efficiency in international trade, with a focus on reducing trade costs and facilitating cross-border trade.

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