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?

GS 2
International Relations
2018
15 Marks

Subject: International Relations

The ongoing Trade War and geopolitical tensions have exposed significant vulnerabilities in the World Trade Organization (WTO), necessitating urgent reforms to maintain its relevance as the cornerstone of multilateral trading system.

Key Reform Areas for WTO's Survival

1. Dispute Settlement Mechanism

  • Restoration of Appellate Body functionality which has been paralyzed since 2019 due to US blocking appointments.
  • Streamlining the dispute resolution process to reduce the current backlog of 630 disputes and prevent appeals going "into void".
  • Implementation of an interim appeal arrangement to ensure continuity of trade dispute resolution.

2. Digital Trade and E-commerce

  • Developing balanced frameworks for cross-border data flows while addressing India's concerns about revenue losses from customs duties.
  • Creating equitable rules that prevent monopolistic control by established online platforms.
  • Ensuring policy space for developing nations to regulate data in public interest.

3. Special and Differential Treatment (S&DT)

  • Preserving developmental considerations for emerging economies like India.
  • Maintaining flexibility in implementing WTO commitments based on economic capabilities.
  • Protecting India's interests in agricultural subsidies and food security programs.

4. Non-Tariff Barriers (NTBs)

  • Addressing technical barriers to trade affecting Indian exports.
  • Harmonizing standards and conformity assessment procedures.
  • Implementing transparent and scientific basis for Sanitary and Phytosanitary (SPS) measures.

5. Market Distortions

  • Tackling unfair practices by non-market economies.
  • Addressing industrial subsidies and state-owned enterprise operations.
  • Ensuring fair competition in global trade.

Way Forward for India

  • Strengthening domestic industries through Production Linked Incentive (PLI) schemes.
  • Diversifying export markets and reducing dependency on single sources.
  • Building coalitions with like-minded countries for WTO reforms.

The reform of WTO must balance between multilateralism and national interests, ensuring both organizational effectiveness and equitable development opportunities for nations like India. The success lies in creating a rules-based trading system that promotes fair competition while addressing the sustainable development goals (SDGs) and inclusive growth.

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