Business Economics & Services Team
Is WTO Relevant Today?
Everyone is celebrating the clearing of roadblocks in the
WTO negotiations because of the ironing out of differences between India and
the US in the food security deal. Coming close to the G20 meeting in Australia,
the development assumed importance and is likely to fuel hopes of WTO playing
an important role in trade facilitation measures.
But the pertinent point is whether the hallowed trade facilitation
body has lost its sheen? Many thinks so and an equal number of people believe
otherwise. But one the thing is certain that the conduct of this body, which
was earlier known as GATT, will undergo a change: for good or bad I cannot
predict.
If it has to emerge as a respectable and credible body, it
should not only become a rule-based trade facilitation body by also has to reverberate
that it has a human side also, when it comes to dealing with developing and
least developed countries. It is a known fact that not many country representatives
taking part in trade negotiations are either aware of the rules, impact or
their negotiating powers. They go with the tide and vote for resolutions when
they come up for passage. Can you believe that some of the least developed countries have
endorsed in the past most stringent rules relating to hygiene, health standards, granting of
subsidies, child labor etc. India was not an exception till a few years ago. In
the ILO forum, we were signatory to some of the ardent resolutions, which could
not be implemented at that point of time. Child and bonded labor were some
among them. But still such bad practices continued till a strong political will
emerged.
WTO has to go for an image makeover and has to adapt to the
situation that are unfolding. Hegemonic character it wielded in the earlier
days riding on the back of powerful US and the EU economies had dented its
image to a large extent. That is also true in the case of other multilateral
organizations like World Bank, IMF etc. There are now new players like China,
India, Brazil, and Russia., which can tilt the levers of power. Already, we
have seen the emergence of BRICS, which will make heavy inroads into the effectiveness
of WTO. Also, it has to work with a human face. Trade and capital flows hardly
know that attributes. Trade and compassion or empathy are believed to be poles
apart. That doctrine has to change for the better. Poverty in Africa, Asia or
Latin America should make the WTO think whether a trade aggrandizement policy
will hold good. A new orientation should be given to trade without losing the
steam attached to the terminology. That unfortunately is not taught in Wharton,
Harvard or Princeton.
About India’s theatrics on India-US Food security portends
that WTO is still going to be a hotbed of politics. Why India objected to that
some four months back and now agreed to that? Has it buckled under pressure
from the powers that matter or it wanted
to up its stake among the comity of nations that the new dispensation has its own thinking
and can harp polices different from the earlier regimes. The nation wants to
know about it.
What are the takeaways for India from the new dispensation?
I do not think that it is going to benefit much from the merchandize trade
since a lot of spade work has to be done to make our manufacturing sector
competitive. I can see a double whammy prospects in the case of services sector
exports. Relaxed visa regimes under mode 2 & 3 can enable the movement of
natural persons across geographies. On the positive side that will help our
engineers and doctors, management consultants, financial experts etc. to move
to other countries. That also means that there will be a skill drain from
India. Then the question is who will power the Make in India program. Do we
have to import such people from abroad? That is the flip side!!!
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