Trade Multilateralism At Risk

Context: WTO, once an example of free-market capitalism, is facing an existential crisis.

Challenges Faced by WTO:

• Initially, it was criticized for furthering the American imperialist agenda.
• Lost Interest Of United States in WTO due to several trade disputes and failing to stem china’s rise, which is leading to crippling of the Appellate Body (AB) with  US‘s disruptive attitude such as
  • Consistently blocking the appointment of AB members.
  • Vetoing of proposals to find solutions to this impasse.
  • Stalling the proposal of the European Union to establish an alternative interim appellate arbitration mechanism.
• Defiance of WTO obligations by countries due to high pending appeals in AB.
• No solution to public stockholding yet: Despite a clear mandate to do so in the 2015 Nairobi ministerial meeting.
  • With rising prices and the need to do higher procurement to support farmers and provide food to the poor at subsidized prices, India might breach the trade distortion cap.
• Disagreement between countries over the need to waive the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement for COVID-19 related medical products.
• Emergence of mega plurilateral agreements such as Regional Comprehensive Economic Partnership (RCEP) & Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) may decrease the relevance of WTO.
• Striking a balance between conservation of ocean resources and the livelihood concerns of millions of small and marginal fishermen in countries like India while regulating irrational subsidies provided for fishing by China.

Way Forward: To prevent WTO from turning into an” Institutional Zombie”, the following steps are required.

• Permanent solution to the issue of procurement, stock, and distribution of food, such as not counting MSP-provided budgetary support as trade-distorting.
• Adopt TRIPS waiver for COVID-19 vaccines.
• Special and differential treatment provision that accords adequate policy space for countries like India on fisheries subsidies.