WTO must come forward to rein nations violating trade rules: India (GS 3, Economics, The Hindu, Indian Express, WTO)

News/ Context: The commerce and industry minister Piyush Goyal  in a meeting at Global economic Policy Summit  2021 said that some countries are not working transparently as per international trading rules. Without naming countries like China he said that stage ahead of the World Trade Organisation  ministerial meeting which will begin later this month.   He urged a reboot the way the WTO and other such global bodies go about their business to deal with such situations.

Mr Goyal urged the developed countries to look into whether they were treating the developing nations and least developed nations at par in international trade, sustainability and in achieving the goals of climate change. As per the Minister, the WTO should pay attention and reassess the way it has been conducting its affairs. 

Answering a question from New Zealand high Commissioner to India David Pyne present in the meeting, the Minister said that the new zealand wanted India to join regional comprehensive economic partnership RCEP, but it was an agreement between two unequals. 

While alluding China during the talk which is a key member of RCEP, The Minister said that India is looking at a honest and transparent trading system,  but entering into an agreement with certain economies that don’t it give market access to everybody openly and equitably,  don’t  share information, and where there are hidden subsidies, would not be at par. The Minister said that you never get to act because you don’t have the information, where you asked for data but you never get the data. 

In contrast to others,  India is  following “the rules of transparency” with almost everything done transparently in the public domain.  For example The Right to Information laws in India are so strong.  you can have almost any information  as per the RTI Act.  The system allows for anyone to pay a fee just rupees 10 to take out any file from the government system. If the person seeking information  belongs to BPL,  he or she doesn’t even need to pay the fee. 

Thus reformation in the WTO is critical to check such countries’ flagrant violation of trade rules. Whenever some talk  about these changes take place triggered the developed nation into immediately  seeking whether special and differential treatment trade benefits for the developing and less developed countries should continue.  

The Indian Pharma Industry has been trying for many years but not getting market access. In contrast India has opened up to 100% through automatic approval . It means anybody from outside can invest and buy companies in  India in the Pharma sector. In other many sectors too, India has  opened its economy for foreign investment up to 100%. 

Underdeveloped and developing countries at the level of 1000 dollar to 2000 dollar per capita income are deprived of differentiated treatments in the business practices and putting them on the same benchmark with the countries having 60000 to 80000 per capita income, is grossly unfair. 

The developed nations are making noises about climate change and sustainable development goals, but they are not doing sufficient in regard to helping the less developed nations to meet their obligations while developing their economies and meeting the aspirations of billions. 

What are “Special and differential treatment provisions” :  

There are special provisions in the WTO agreements which give developing countries a special rights. These are called “special and differential treatment” provisions. It was mandated by the Ministers in Doha at the 4th WTO Ministerial Conference to the committee on Trade and Development to examine these special and differential treatment provisions. A mechanism to review and analyse the implementation of special and differential treatment provisions was established by The Bali Ministerial Conference in December 2013. 

The special provisions which give developing countries special rights and which give developed countries the possibility to treat developing countries more favourably than other WTO Members. These special provisions include, for example, longer time periods for implementing Agreements and commitments or measures to increase trading opportunities for developing countries.

These provisions are referred to as “special and differential treatment” (S&D) provisions.

The special provisions include:

  • longer time periods for implementing Agreements and commitments,

  • measures to increase trading opportunities for developing countries,

  • provisions requiring all WTO members to safeguard the trade interests of developing countries,

  • support to help developing countries build the capacity to carry out WTO work, handle disputes, and implement technical standards, and

  • provisions related to least-developed country (LDC) Members.

Md Layeeque Azam, Economics Faculty

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