25 April 2025: The Hindu Editorial Analysis
1. Is World Trade Organization still relevant?
(Source – Editorial, Page 9, The Hindu, 25 April 2025)
| Topic: GS2 – International Institutions, GS3 – Globalization, Trade Reforms |
| Context |
| The editorial examines the growing irrelevance and credibility crisis faced by the World Trade Organization (WTO) in the modern global order. Once the anchor of multilateral trade governance, the WTO now struggles with institutional paralysis, weakening dispute settlement, and inability to adapt to 21st-century trade issues like digital economy and climate change. |
WTO: Background & Core Functions
- The World Trade Organization (WTO) was established in 1995 as the institutional successor of the General Agreement on Tariffs and Trade (GATT).
- Mandated to create a rules-based, transparent, and fair multilateral trading system, the WTO became a crucial pillar of global economic governance.
- However, with rising protectionism, institutional gridlock, and emerging digital and climate-related trade issues, the relevance of WTO is increasingly questioned.
Key Challenges Faced by WTO
1. Dispute Settlement Crisis
- The Appellate Body—WTO’s apex dispute forum—has been non-functional since 2019 due to the U.S. blocking judge appointments.
- This renders the Dispute Settlement Mechanism (DSM) ineffective and weakens the enforcement of trade rules.
- Countries now resort to unilateralism, bilateral retaliation, or forum shopping.
2. Resurgence of Protectionism and Trade Wars
- The U.S.–China tariff war, sanctions regimes, and export restrictions reflect growing disregard for WTO norms.
- Members are violating principles of Most Favoured Nation (MFN) and National Treatment, fragmenting the trade order.
3. Stalled Negotiations & Doha Round Fatigue
- The Doha Development Agenda (2001) aimed to address the needs of developing countries but has stalled for over two decades.
- No meaningful consensus has been reached on issues like:
- Agricultural subsidies
- Fisheries subsidies
- Public stockholding for food security
4. Inability to Address Emerging Trade Domains
- WTO lacks binding rules on:
- E-commerce and data flows
- Digital taxation
- Green subsidies and carbon border adjustments
- This widens the regulatory gap and pushes countries to form separate digital trade agreements.
5. Marginalization of the Global South
- Developing nations argue that their interests are sidelined:
- S&DT (Special and Differential Treatment) provisions are under threat.
- Asymmetric influence of developed nations in agenda-setting.
India’s Position and Concerns
1. Support for Multilateralism
- India upholds a rules-based multilateral trading system, but not at the cost of developmental sovereignty.
2. Opposition to Premature Liberalization
- India has taken a cautious stance on:
- E-commerce regulation
- Investment facilitation
- Moratorium on customs duties on electronic transmissions
3. Protection of Agricultural Interests
- India defends the Public Stockholding Programme for food security.
- Advocates for a permanent solution rather than a peace clause.
4. Demands for WTO Reform
- Greater voice for the Global South in negotiations.
- Democratisation of agenda-setting and negotiation priorities.
Implications for Global Trade Order
1. Risk of WTO Becoming Redundant
- With the Appellate Body non-functional, rules become unenforceable.
- Confidence in WTO’s institutional authority erodes.
2. Rise of Regional and Plurilateral Trade Blocs
- FTAs like RCEP, CPTPP, and digital economy agreements sideline WTO.
- The shift to bilateralism or minilateralism fragments global trade governance.
3. Loss of Equity and Development Focus
- Without WTO’s balancing role, developing countries may face asymmetric trade rules.
- Issues of climate justice, IP waivers, and market access remain unresolved.
Way Forward: Making WTO Relevant Again
1. Revive the Dispute Settlement Mechanism
- Urgent consensus needed to appoint judges to the Appellate Body.
- Introduce procedural reforms to enhance efficiency.
2. Modernize the Negotiation Agenda
- Include digital trade, AI, green goods, and climate-related tariffs in formal negotiations.
3. Protect and Reform S&DT Clauses
- Ensure that developmental needs and policy space are respected.
- Use flexible frameworks like “graduated obligations.”
4. Enhance Inclusivity and Transparency
- Give smaller economies a greater role in agenda-setting.
- Increase technical assistance and capacity-building for LDCs and developing nations.
5. Leverage India’s Leadership in Global South
- Through G20, BRICS, and WTO coalitions (like G33), India can spearhead development-oriented trade reform.
| Practice Question: “The World Trade Organization is increasingly seen as a weakened institution in a multipolar, protectionist world. Critically evaluate its challenges and suggest reforms needed to restore its global relevance.” (250 words / 15 marks) |
Read more – 24 April 2025 : The Hindu Editorial Analysis
