GS2 PYQ 2018 (Mains Answer Writing): WTO reforms | UPSC Mains: International Relations PDF Download

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? (UPSC GS2 2018)

The WTO is at a crossroads. Not only are the multilateral trade negotiations stuck, but overall rule-making has made little progress while alternative trade pacts, not least the mega-regional arrangements, have clearly challenged the position of trade multilateralism.

• The rise of emerging countries and the relative decline of traditional economic powers, their various negotiating demands and approaches, the proliferation of preferential trade agreements, and the need to deal with complex new issues, such as climate change and food security, are all shaking the foundations on which the WTO was built some twenty years ago.
• The impasse of the Doha Round is not so much a result of transatlantic disagreement as a situation in which highly industrialized countries and large developing countries disagree over the type of market access and protection of vulnerable sectors of the economy. Current problems There are clear signals that the current trading system represented by the WTO has lost its utility for the US and the EU.
• They want a new system by making the current one dysfunctional. While most of US President Donald Trump’s current actions like raising tariffs are directed against China, they violate WTO rules. The US and the EU have not been able to beat China in trade. They are also bound by the commitments made under the WTO rules so they cannot raise import duties without violating WTO rules. But they do not want to meet the WTO obligations such as reducing agriculture subsidies. 
• Their game plan is to put the old obligations on the back-burner and push the WTO to form rules on ecommerce, an area where the US firms have a clear edgeMost WTO member countries want them to first deliver on the agreed issues like reduction in agriculture subsidies. This time, the US and EU are unable to bully the developing countries the way they have been doing earlier. The consensus-driven decision-making process leaves no scope for unilateral pushing of the agenda. 

Reforms Required

• The establishment of procedures and practices that are more inclusive of the majority of WTO Members, notably developing countries. 
• Adoption of “peace clauses” for developing country implementation of current agreements. This will formalize the commitments made by major trading powers to allowing “grace periods” and to exercising “due restraint”. 
• The Uruguay Round’s single package approach is not working in the Doha Round and new types of negotiation modes have been advocated. 
• Dispute settlement mechanism must be strengthened and made faster. 
• Separation of political and human rights issues from trade disputes under SPS norms.

Topics covered - WTO, IMF, WB, International Organisations