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Subject: WTO

  • Trump’s new forced labour tariffs face global pushback and legal questions

    Why in News?

    The United States’ new forced labour tariffs under Section 301, covering more than 60 countries, face legal pushback from Brazil and Australia over WTO compliance.

    Key Highlights

    • Tariffs are imposed under a Section 301 forced labour enforcement investigation, covering over 60 trading partners.
    • Brazil and Australia are contesting the tariffs’ compliance with WTO rules.
    • The dispute remains open, legally and diplomatically.

    Section 301 (U.S. Trade Act, 1974)

    • Empowers the Office of the United States Trade Representative (USTR) to investigate and respond to unfair foreign trade practices.
    • Authorises the U.S. to impose tariffs or other trade restrictions if another country’s actions are found to burden or restrict U.S. commerce.
    • Frequently used in disputes involving intellectual property, market access, subsidies, and labour practices.

    World Trade Organization (WTO)

    • Established in 1995, succeeding the General Agreement on Tariffs and Trade (GATT), 1947.
    • Headquarters: Geneva, Switzerland.
    • Objective: Ensure rules-based, predictable, and non-discriminatory international trade.
    • Functions include administering trade agreements, resolving disputes, monitoring trade policies, and providing technical assistance.

    Value Addition

    • Most-Favoured-Nation (MFN) Principle (Article I, GATT): WTO members must treat all trading partners equally unless an exception applies.
    • Dispute Settlement Understanding (DSU): Discourages unilateral trade retaliation and requires members to resolve disputes through the WTO mechanism.
    • Relevance for India: Increasing use of unilateral tariffs by major economies can affect export competitiveness and test the credibility of the multilateral trading system.

    [2018, GS2, 15 marks] What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India?”

  • WTO Agreement on Fisheries Subsidies (AFS)

    Why in News?

    India has deposited its Instrument of Acceptance for the WTO Agreement on Fisheries Subsidies (AFS), becoming the 123rd WTO Member to join the Agreement.

    Key Highlights

    • Adopted: At the 12th WTO Ministerial Conference (MC12), Geneva, June 2022.
    • Entered into Force: 15 September 2025, after acceptance by two-thirds of WTO Members.
    • Nature: First WTO multilateral agreement with an environmental sustainability objective.
    • Objective: Promote sustainable use and conservation of marine fisheries resources while ensuring fair global trade.

    Major Provisions

    • Prohibits subsidies for:
      • Illegal, Unreported and Unregulated (IUU) fishing.
      • Fishing of overfished stocks.
      • Harmful fishing practices leading to overexploitation of marine resources.
    • Provides special and differential treatment (S&DT) for developing and least-developed countries.

    What is Outside its Scope?

    • Aquaculture (fish farming).
    • Inland fisheries (rivers, lakes, reservoirs).

    Significance for India

    • Protects the interests of traditional and small-scale fishers.
    • Disciplines subsidies provided to large industrial distant-water fishing fleets, creating a more level playing field.
    • Enhances India’s image as a responsible and sustainable seafood exporter.
    • India’s aquaculture-based shrimp exports, which form a major share of seafood exports, remain outside the Agreement’s scope.

    India’s Fisheries Management Framework

    • Sustainable Harnessing of Fisheries in the EEZ Rules, 2025.
    • Guidelines for Sustainable Harnessing of Fisheries in the High Seas by Indian-Flagged Fishing Vessels, 2025.
    • Pradhan Mantri Matsya Sampada Yojana (PMMSY) for fisheries infrastructure, conservation and capacity building.

    About the WTO Agreement on Fisheries Subsidies

    • Negotiated under Sustainable Development Goal (SDG) 14.6, which calls for eliminating harmful fisheries subsidies.
    • Applies mainly to marine wild capture fisheries and fishing-related activities at sea.
    • Seeks to balance marine conservation, livelihood protection, and rules-based international trade.

    [2017] Consider the following statements:

    1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
    2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
    3. TFA came into force in January 2016.

    Which of the statements given above is/are correct?

    [A] 1 and 2 only

    [B] 1 and 3 only

    [C] 2 and 3 only

    [D] 1, 2 and 3

  • WTO is an important international institution where decisions taken affect countries in profound manner. What is the mandate of WTO and how binding are their decisions? Critically analyse India’s stand on the latest round of talks on Food security.

  • The aim of Information Technology Agreements (ITAs) is to lower all taxes and tariffs on information technology products by signatories to zero. What impact should such agreements have on India’s interests?

  • The broader aims and objectives of WTO are to manage and promote international trade in the era of globalization. But the Doha round of negotiations seem doomed due to differences between the developed and the developing countries. Discuss in the Indian perspective.

  • What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India?

    The WTO, established in 1995 under Uruguay Round of the GATT, was designed to promote rules-based multilateral trade and ensure that global trade flows as smoothly, predictably and freely.

    Major Challenges Facing the WTO

    Since 2019, WTO’s dispute settlement system has been defunct due to US blocking judge appointments.

    Deadlock over Doha Development Agenda and Agreement on Agriculture

    Opposition of developing countries for ‘New Issues’

    WTO rules lag behind in Digital Trade & E-commerce

    Dispute over “Developing Country” Status – The US opposes self-declared developing status at WTO, arguing that countries like India and China should be treated as developed.

    Mega-regional trade pacts like the TPP (Trans-Pacific Partnership), bypassing WTO norms.

    Proposals by India in the High-Level Mini-Ministerial Meeting

    Revival of the WTO Dispute Settlement System to maintain WTO’s credibility and rule-based order.

    Institutional & Negotiation Reforms

    Move from consensus-only decision-making to hybrid or majority-based models for efficiency.

    Enhance voice of developing nations in agenda-setting and committee representation

    Reform of Special and Differential Treatment – Retain S&DT as a core principle ensuring policy space for developing countries.

    Agricultural Trade Reform

    Rationalize domestic support and export subsidies in developed nations (EU, US).

    Permanent solutions for public food grain stockholding programs

    Ensure food security exemptions are protected under Article 18.4 of AoA.

    Tackling Non-Tariff Barriers (NTBs) by ensuring transparency, science-based standards, and non-discriminatory application of NTBs.

    Addressing Distortions by Non-Market Economies – Eg- China’s export quotas on rare earths

    Develop balanced rules on data localization, digital taxation, and cross-border flows to prevent dominance of Big Tech

    Prevent misuse of green trade barriers as disguised protectionism. Eg- EU’s Carbon Border Adjustment Mechanism

    Permanent WTO Reform Council to propose systemic reforms every five years.

    India must lead the Global South coalition to ensure reforms are inclusive, equitable, and development-centric.

  • Consider the following statements

    Consider the following statements:
    1. India has ratified the Trade Facilitation Agreement (TFA) of WTO.
    2. TFA is a part of WTO’s Bali Ministerial Package of 2013.
    3. TFA came into force in January 2016.
    Which of the statements given above is/are correct?

  • As regards the use of international food safety standards as reference point for the dispute settlements, which one of the following does WTO collaborate with

    As regards the use of international food safety standards as reference point for the dispute settlements, which one of the following does WTO collaborate with?

  • In the context of the affairs of which of the following is the phrase ‘Special Safeguard Mechanisms’ mentioned in the news frequently

    In the context of the affairs of which of the following is the phrase ‘Special Safeguard Mechanisms’ mentioned in the news frequently ?