Is the World Trade Organization still relevant? Pg 9

Key Highlights

• Stalled Core Functions: WTO’s negotiating arm (Doha Round), dispute-settlement mechanism (Appellate Body), and trade-monitoring role are all paralysed; only the Fisheries Subsidies Agreement has been concluded since 2001.
• US-Led Unilateralism: Successive US administrations imposed “national-security” tariffs (Sections 232 & 301) and withdrew/limited MFN treatment, signalling retreat from rules-based trade.
• MFN & Consensus Challenges: The Most-Favoured-Nation principle is increasingly bypassed; consensus decision-making is blocking timely reforms—EU’s ad-hoc arbitration plan lacks universal buy-in.
• Rise of FTAs: Major economies prefer bilateral/regional trade agreements, adding complexity and marginalising developing countries that lack negotiation capacity.
• Agriculture & Subsidies Disputes: U.S. domestic sensitivities and India’s concern over farm subsidies hamper progress; meaningful talks on agricultural support remain elusive.
• Implications for India: WTO gridlock limits a rules-based shield against large-economy tariffs, yet India still needs a functioning multilateral forum to defend interests in areas like services and food security.

Analysis & Way Forward

• WTO paralysis weakens the multilateral trade order, hurting smaller economies dependent on predictable rules.
• Restoring the Appellate Body, allowing plurilateral deals with flexible opt-ins, revisiting the unanimity rule, and tackling agricultural subsidy transparency can revitalise the institution while balancing developed–developing country concerns.

Mains Mock Question:

“Examine the factors responsible for the current crisis in the World Trade Organization. In this context, discuss how India should recalibrate its trade strategy to safeguard its interests while contributing to global trade governance reforms.”