India Seeks Safeguards For WTO Plurilateral Agreements

Source: Indian Express
GS II: Important International Institutions, agencies and fora – their structure and mandate.

Why in the News?

India has proposed a framework for integrating plurilateral trade agreements into the World Trade Organizations (WTO) system.

News in Brief

• The proposal comes after India had earlier opposed plurilateral agreements at the WTO’s 14th Ministerial Conference in Cameroon.
• India has stressed that Special and Differential Treatment (S&DT) must remain central to WTO rule-making.
• India has also raised concerns that the proliferation of plurilateral initiatives could place additional pressure on WTO resources and its limited budget.
• The change in India’s position follows the BRICS summit and recent bilateral engagement with China, according to the report.

What are Plurilateral Trade Agreements?

• A plurilateral trade agreement is an agreement involving a group of WTO members on a particular subject, rather than the entire WTO membership.
• Unlike multilateral agreements, which seek participation of all WTO members, plurilateral agreements allow interested members to negotiate rules in specific areas.
• Examples
  • Some WTO agreements with limited participation have historically existed in areas such as,
    • Government procurement
    • Trade in civil aircraft
    • Information technology-related trade
  • More recent plurilateral negotiations have also focused on areas such as e-commerce, investment facilitation and domestic regulation of services.

Why has India been cautious about Plurilateral Agreements?

India’s concerns are largely related to inclusiveness, development interests and the WTO’s institutional balance.

Risk of marginalization

If a group of developed economies establishes rules through plurilateral initiatives, developing countries that do not participate may have limited influence over the emerging rules.

Impact on policy space

India has traditionally argued that developing countries require sufficient policy space to pursue food security, livelihood protection and development objectives.

Public Stockholding for Food Security

• India’s public stockholding programme has been opposed by some developed countries on the grounds that it can distort international trade.
• India therefore remains concerned that new plurilateral rules could indirectly affect important programmes relating to food security and agriculture.

Unequal negotiating capacity

Developing and least-developed countries may have fewer financial, technical and institutional resources to participate simultaneously in multiple negotiations.

India’s Proposed Safeguards

• India’s submission to the WTO General Council emphasizes the need for a common understanding on safeguards before plurilateral initiatives become part of the WTO framework.
• Such safeguards could:
  • Provide greater predictability to participating countries.
  • Allow non-participating members to understand and protect their rights and interests.
  • Ensure that existing WTO mandates are not undermined.
  • Preserve the member-driven and inclusive nature of the WTO.
  • Prevent the rights of non-participating members from being prejudiced.
  • Clarify the institutional relationship between plurilateral initiatives and the WTO.
• India has stated that while non-participation should remain a legitimate exercise of a member’s rights, it should not prejudice the rights or interests of countries that do not participate.

Institutional Concerns

• India has highlighted that plurilateral initiatives may have implications for,
  • Existing rights and obligations of WTO members.
  • The functioning of WTO bodies
  • Negotiating interests of individual members
  • The operation of the multilateral trading system.
  • Allocation of WTO resources.
• India has also warned that proliferation of plurilateral agreements could put pressure on the WTO’s limited budget and resources.
• Resources could potentially be diverted from mandated functions such as,
  • Technical assistance
  • Capacity building
  • Development-related support
  • Other priorities of developing and last-developed members.

Special and Differential Treatment (S&DT)

• India has stressed that Special and Differential Treatment should remain central to WTO rule-making.
• S&DT provisions provide developing and least-developed countries with flexibilities such as:
  • Longer implementation periods.
  • Technical assistance.
  • Greater flexibility in implementing certain WTO commitments.
  • Special consideration of their development needs.

Multilateralism vs Plurilateralism

The challenge is therefore to find a mechanism through which plurilateral initiatives can coexist with the multilateral WTO system without undermining the rights of non-participants.

Key Issues for India

• Food Security- India’s public stockholding programmes are closely connected with its concerns about WTO agricultural rules and food security.
• Development concerns- Developing countries need policy space to address poverty, employment, food security and structural transformation.
• WTO Reform- The debate forms part of the larger discussion on how to make the WTO more effective while retaining its multilateral character.
• Resource constraints- A growing number of plurilateral initiatives could increase administrative and financial demands on the WTO.
• Inclusive decision-making- India wants the interests of countries that do not participate in particular agreements to remain protected.

India’s Position

India’s approach seeks to maintain a balance between protecting the multilateral and development-oriented nature of the WTO and allowing groups of willing members to pursue plurilateral trade agreements in specific areas.

India has not completely rejected plurilateral initiatives. Instead, it has called for clear safeguards and common rules to ensure that such agreements do not affect the rights and interests of countries that choose not to participate. This approach aims to allow flexibility in WTO negotiations while preserving the interests of developing and least-developed countries.

Conclusion

WTO reform needs to balance flexibility in trade negotiations with inclusiveness and development concerns. India’s proposal seeks to ensure that plurilateral agreements can move forward without weakening the rights of non-participating members.

A transparent and inclusive framework can help the WTO remain relevant while addressing the diverse interests of its membership.

UPSC Prelims and Mains Practice Question

Consider the following statements regarding plurilateral trade agreements:

1. They are negotiated and implemented by a group of WTO members rather than necessarily by all members.
2. India has raised concerns that such agreements could affect the interests of developing and least-developed countries.
3. India has argued that Special and Differential Treatment should remain central to WTO rule-making.

Which of the statements given above are correct?

(a) 1 only
(b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3

Answer: (d)

Mains Practice Question

Q) Plurilateral trade agreements can provide flexibility in global trade negotiations but may also raise concerns regarding inclusiveness and the interests of developing countries. Discuss India’s concerns and its proposed safeguards within the WTO framework. (250 words)

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