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The road to WTO Ministerial Conference 13 is fast approaching, where trade ministers from various countries will be gathering in Abu Dhabi to discuss crucial issues. It will be invigorating to witness the high stakes involved in discussing important business and the challenging path towards success on pertinent agendas decided on the sidelines of the 12th Ministerial Conference (MC12).
Illustration by The Geostrata
This article will assess the Indian perspective on the ongoing trade negotiations turmoil that appears discriminatory to many developing and underdeveloped countries. Even though the WTO membership has been expanded over the years, the functioning and lack of consensus are still swirling around. The 164 members assure diversity and representation but concomitantly create unprecedented rounds of negotiations with varied outcomes.Â
WTO AND ITS MECHANISM
The Ministerial Conference, the topmost decision making body, meets twice a year to address the dynamic challenges confronting modern global trade relations towards a more prosperous, peaceful, and accountable global economic framework. With partial outcomes at the 12th Ministerial Conference, the present scenario requires plurilateral consensus to end the differential treatment of emerging economies.
The long-decadent practices must be revised to ensure WTO compatibility, so that development-friendly agreement fosters economic growth through increased trade and investment but does so in a way that contributes to achieving the UN Sustainable Development Goals (SDGs). Thus, several trade policies require urgent attention to critical matters such as zero hunger, eradication of poverty, climate action, industry infrastructure, and more.
Integrating the capacity-building approach with appropriate discussion and smooth execution could serve as a yardstick for developing nations for ongoing and future multilateral trade aspects.Â
The Indian Prime Minister Narendra Modi at the recent G20 Leaders Summit in New Delhi recognised that the WTO needs flexible and multilateral fundamentalism in its policies to capture the full potential of globalisation. The G20 finance taskforce could further inculcate best practices to facilitate good governance, decision-making processes, and resource deployment to drive through the existential crisis with policy innovations. India, from the beginning, has advocated for lowering the restrictions so that barriers between people and trading economies can be removed.
The point of convergence for the 13th WTO Ministerial Conference (MC13) will be :
Ratifying the WTO's dispute settlement function: The US has constantly delayed the appointment of additional judges, from the first-instance panel to the second instance of the WTO's dispute settlement body which has resulted in incapacitation of the Appellate Body, since December 2019. (The first and second instance panels are the quasi-judicial bodies, handling disputes between members in the first instance)Â
Abolishing fisheries subsidies promoting overfishing and overcapacity: The last ministerial conference terminated with the passage of a multilateral Agreement on Fisheries Subsidies, forbidding the support to illegal, unreported, and unregulated (IUU) fishing, overfished stocks, and unregulated high-seas fishing. WTO member countries have negotiated a second round of regulations to reduce fisheries subsidies reflecting overcapacity and overfishing. In January 2024, they organised a 'Fish month' based on the finalised draft text, with the goal of delivering a clean text to ministers at MC13.
Merging of the Plurilateral Investment Facilitation Agreement into the WTO legal structure, along with the agreement of July 2023, where over 110 WTO members agreed to reduce red tape and promote investment while enlarging the e-commerce ordinance. Later, WTO members will formally agree to the entry of Comoros and Timor-Leste, bringing the total membership to 166.
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INDIA AT THE CONFERENCE
At the WTO's Ministerial Conference India, South Africa along with various other like-minded nations recommend to restrict the European Union's approximate procedures. The Global Trade Research Initiative record discusses a 20%-35% tax obligation increment on goods and services getting into the European Union from January 2026 under the Carbon Border Adjustment Mechanism, for a better perspective, India exports around 26% of its iron, steel, and light weight aluminium to Europe. At the Ministerial Conference in February, 2024 India in all probability will flag the carbon taxation as a trade barrier.
India takes into consideration the recommended cost as rehabilitative and also would certainly contest its legitimacy arguing that the country was fulfilling the commitments undertaken during the Paris Climate Agreement in 2015.Â
By 2030 the EU envisages to lower its greenhouse gas emissions by 55% contrasted to the levels in 1990 that includes getting carbon certifications. Additionally, the tax increment is formed to stop domestic industries from being threatened by cheaper imported goods. The CBAM will not only make the Indian exports to the EU costlier but also result in unnecessary technical and authoritative barriers. It will affect around annual exports of $8 billion to the EU. Furthermore, it will harm the MSME economy of India.Â
Reportedly, the Government of India is looking into possible frameworks to convert this issue into opportunity, as the CBAM on the European goods and services coming into India.
Together with India, China has shared issues regarding the carbon tax obligations. The Argentinian along with the Brazilian market organisations have conveyed their concerns to the European Union.
They've additionally increased the examination of why the EU market has not taken initiatives to divulge information regarding tax obligation increment prior to applying it? The appropriate Ministry of Taiwan along with Thai ventures have also expressed their concerns on specific issues to the EU.
CONCLUSION
In a nutshell, India's problems highlight the requirement for a reasonable as well as detailed technique that thinks about the reality of different trade and economic ambitions of member nations. The vibrant nature of worldwide economies underscores that countries connect easily, search for common ground to arrangement and work together to discover win-win situations.
In order to deal with the intricacies of worldwide professional arrangements along with producing a setting where the concerns of both advanced and developing nations are taken into consideration, the 13th ministerial conference functions as a key platform for grievance redressal by communicating each others’ concerns thereby inculcating a sense of cooperation among the fellow members.
The constant engagement with sustainable growth development of member states will certainly depend upon structure agreement with diplomatic and cooperation efforts as the globe tries to find even more coherence.
BY GARGI TAMBOLI AND DIPTISIKHA SAHU
TEAM GEOSTRATA