India-US Bilateral Trade Talks and WTO's Role
The scheduled resumption of India-US bilateral trade talks, with US trade envoy in Delhi, highlights the critical juncture at which the World Trade Organization (WTO) finds itself. The institution must prove its relevance amidst an era where multilateralism is increasingly questioned.
Challenges Facing the WTO
- Role for Developing Nations: The WTO has been a safeguard against rules dictated by powerful nations. A failure to maintain a rules-based trading order could compromise this role.
- India's Leadership Role: Historically a voice for the ‘global south,’ India must lead efforts to revive the WTO, requiring clarity of vision and strategic flexibility.
Criticisms and Strategic Concerns
- Plurilateral Initiatives:
- India has stalled consensus on initiatives like investment facilitation for development (IFD) and MSMEs, which critics argue limits trade expansion opportunities for developing nations.
- Opposition to plurilateral ecommerce negotiations is based on the view that these undermine the multilateral trading system, though India could adopt a more flexible approach.
- Dispute Settlement System:
- The WTO's appellate body is dysfunctional due to US resistance. Although many nations joined the MPIA, India has stayed out.
- India should consider joining MPIA as an interim solution while advocating for the appellate body's revival.
- Special and Differential Treatment (S&DT):
- Developed countries push for revising S&DT, claiming misuse by developing countries. India must navigate these negotiations to maintain its flexibilities.
Digital Trade and New Themes
- Digital Trade: India resists binding commitments, citing the evolving nature of digital trade. It includes digital trade chapters in bilateral deals, reflecting a nuanced approach to preserve regulatory autonomy.
- Emerging Themes: Historically skeptical, India shows a gradual openness to themes like gender, MSMEs, and climate in trade talks. WTO must ensure genuine development support and technology transfer for new thematic work.
India's Strategic Role
India must avoid being seen as obstructionist and demonstrate conditional openness to plurilateralism, which would safeguard its interests and keep multilateral negotiations alive. Its leadership is crucial for bridging divides and revitalizing the WTO.