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WTO legitimacy at stake in Abu Dhabi meeting

Published: 18th Jan, 2024

Context

WTO members are facing the daunting task of making the multilateral trading system respond to the needs of the contemporary world, especially those of the developing countries.

Key Highlights –

  • Existential Crisis of the WTO:
    • The 13th Ministerial Conference (MC13) of the WTO is happening in Abu Dhabi amid a growing existential crisis of the multilateral trading system.

WTO’s Ministerial Conference

  • The MC is at the very top of WTO’s organisational chart.
  • It meets once every two years and can take decisions on all matters under any multilateral trade agreement.
  • All decisions at the WTO are made collectively and through consensus among member countries at varied councils and committees.
    • The WTO, designed to ensure orderly global trade, faces challenges in adapting to the contemporary world's needs and aspirations.
  • Dysfunctional Multilateral Trade Rules and Enforcement:
    • Multilateral trade rules, considered ideal for conducting trade, need constant review and updating to align with global changes.
    • The WTO's dispute settlement body (DSB), once robust, has become dysfunctional, undermining the enforcement of trade rules.
  • Abandonment of Doha Development Agenda:
    • The Doha Development Agenda, initiated in 2001 to rebalance trade rules, was abandoned after 15 years, leading to the dominance of major economies.
    • Engagements on new issues by a subset of members violate core principles of multilateralism.
  • Death Blow to DSB by Trump Administration:
    • The Trump administration's refusal to appoint new members to the appellate body of the DSB dealt a severe blow, making it non-existent.
    • The absence of the appellate body allows members to violate WTO disciplines without consequences, rendering multilateral trade rules ineffective.
  • Current Issue-Based Discussions:
    • WTO members engage in issue-based discussions, including subsidies discipline for the fisheries sector and the review of disciplines on agriculture.
    • Disciplines for fishery subsidies aim at promoting sustainable fishing while preserving policy space for developing countries.
  • Significance of Agriculture Review for India:
    • The review of the agreement on agriculture (AoA) includes crucial components for India, such as public stockholding for food security.
    • India faces challenges under the AoA's subsidies' disciplines, limiting its ability to implement the National Food Security Act (NFSA).
  • Legitimacy Deficits and Glaring Weakness:
    • India's challenges under subsidies' disciplines exemplify legitimacy deficits within the WTO.
    • MC13 must address these weaknesses and make decisions to strengthen the institution.

About World Trade Organization (WTO)

  • It came into being in 1995.
  • The WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.
  • Its objective is to help trade flow smoothly, freely and predictably.
  • It has 164 members, accounting for 98% of world trade.
  • It was developed through a series of trade negotiations, or rounds, held under the GATT.
  • GATT is a set of multilateral trade agreements aimed at the abolition of quotas and the reduction of tariff duties among the contracting nations.
  • The WTO’s rules – the agreements – are the result of negotiations between the members.
  • The WTO Secretariat is based in Geneva (Switzerland).

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