By Disha Rawal
An informal meeting of the World Trade Organisation began on March 21 with a participation of 52 countries. The meeting seeks to discuss the recent tariffs imposed on aluminium and steel imports by the United States, which could possibly escalate into what is being termed as a trade war. The discussion, continuing from the previous ministerial conference in Buenos Aires, was centred on special and differential treatment issues (S&DT), dispute settlement, and the unilateral actions taken by the US. Countries considered various ways of ‘reinvigorating’ the WTO.
Commerce Minister Suresh Prabhu, who chaired the meeting, urged the member nations to continue the S&DT provisions, which are currently enjoyed by countries like India, China, and South Africa. Apart from that, US trade tariffs emerged as a major issue. “Global trade environment is risky and the multilateral dispute settlement system is compromised”, World Trade Organisation Director-General Roberto Azevedo said on the first day of the meeting.
What all concerns India?
India discussed the crucial issue of differential treatment meted out to developing countries, especially in the context of the US complaining to the WTO about India’s export subsidy programme. The meeting deliberated on the motion of every country outlining the need for differential treatment and the committee approving the same. However, India voted against that motion. This comes close at the heels of Prabhu remarking how India is still eligible to give export subsidies under WTO rules. The norms say that there is an eight-year adjustment period granted to every country after it crosses the stipulated GNI (gross national income) mark. India is still going through that adjustment period.
Moreover, India has repeatedly sought to improve the dispute settlement mechanisms. Talks on how to counter increasing protectionism have been failing repeatedly, with the US adopting an uncompromising stand, leaving WTO struggling for legitimacy. Countries are now beginning to reckon how to save the dispute settlement mechanism, which has been called the crowning jewel of the WTO.
The questionable legitimacy of WTO
Many envoys have allegedly raised fingers at certain countries which are trying to ‘water down’ the dispute settlement mechanism. Indeed, Donald Trump, on 26th February, said “The WTO is a catastrophe… the World Trade Organisation makes it almost impossible for us to do good business. We lose the cases, we don’t have the judges. We have a minority of judges.”
The WTO has not proven to be extremely effective in recent times. At the Buenos Aires meeting, India remarked on the failure of the WTO to address the issues of hunger and food security in developing countries. Subsequently, at this meeting, cautious support was given to India’s food stockpiling program.
Apart from this, certain issues regarding gender in trade were also discussed.
E-commerce rules
The WTO meeting sought to impose a multilateral framework to regulate e-commerce. However, India has collectively rejected that move, according to the Confederation of Indian Industry. A meeting between industry representatives, the WTO DG and Commerce Ministry officials was held, led by the CII on Monday.
“We are concerned that multilateral rules in e-commerce may not help in the creation of a level-playing field between large companies and small start-ups and the bigger players who dominate e-commerce in the country may get an advantage,” a representative from CII said.
There are apprehensions that this agreement may also lead to products being imported at zero duties.
However, the government consequently moved fast and called a meeting between major e-commerce players, inviting suggestions to build a robust e-commerce policy framework in the country on the 22nd of March. Representatives of companies like Flipkart, Snapdeal, Wipro, and industry bodies like Nasscom, CII, and FICCI were present at the meeting.
However, many are saying that India effectively failed to revive talks yet again at the WTO meeting. What a new trade regime is going to look like, in the absence of an overarching body, remains to be seen.
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