India's Opposition to US Proposal on MFN at WTO
India is poised to oppose a United States proposal at the World Trade Organisation (WTO) concerning the dismantling of the most-favoured-nation (MFN) obligation. The US argues that the multilateral principle does not reflect current economic and strategic realities.
US Perspective
- The US argues that the MFN principle is outdated and prevents countries from optimizing trade relationships, thus impeding welfare-enhancing liberalization.
- The US suggests that MFN forces members to pursue a one-size-fits-all approach within the WTO framework.
- A distinction between developed and developing countries is increasingly blurred, according to the US.
- The US proposes allowing all members to enter mutually beneficial agreements that may not extend to every member.
India's Response
- India has not formally replied but plans to oppose the US proposal, as it contradicts the core principles of the WTO.
- India emphasizes the importance of preserving foundational principles such as consensus-based decision making, member-driven character, and special and differential treatment.
- A Group of Experts on WTO Reform has been established in India to develop a coherent strategy and identify red lines.
WTO Reforms and Upcoming Discussions
- WTO reforms are expected to be a critical topic at the 14th ministerial meeting (MC14) in Yaoundé, Cameroon, scheduled for March 26-29, 2026.
- India stresses the need for threshold understanding, not to renegotiate the foundational principles of the Marrakesh Agreement.
US Opposition to Special and Differential Treatment (SDT)
- The US opposes SDT for developing countries like India and China, stating it is necessary for the WTO's credibility.
- It argues that significant trading system players should not receive preferential treatment indefinitely, as it undermines compliance with WTO commitments.
This ongoing debate reflects broader tensions between developed and developing nations regarding trade policies and the future direction of the WTO.
