Uncle Sam's hand

Uncle Sams hand

WTO's global framework provides essential stability to the vast and often fragmented trading world through crucial agreements concluded by all its signatories. It is essential then that WTO norms are unbiased, reflecting negotiated consensus despite existing disparities, which, otherwise, will adversely affect global trade. Therefore, it is WTO's responsibility to ensure that no nation is mistreated on trade lines due to low resources or other inherent disadvantages in comparison to powerful nations. Mindfully, WTO has three categories viz. developed countries, developing countries and least-developed countries (LDCs). Provisions are enshrined in WTO agreements to protect developing countries and LDCs. Though developing nations and LDCs depend on developed counterparts such as the United States, Japan, EU for trade, aid and even security, their formal participation in WTO paves for them a path towards prosperity. A recent US proposal to WTO has stressed on rescinding provisions extended to a few developing nations in favour of those member countries that find integration into the WTO-supervised multilateral trading system complicated. The US cited how these few developing nations have made significant strides in economic progress – are a part of G20 or OECD or are classified by World Bank as High-Income Countries – denoting that they do not require Special and Differential Treatment (S&DT). Hence, it is in the US's moral interest to apprise WTO that countries like China and India are better off without S&DT while reinforced provisions should be provided to countries in grave need (LDCs) such as Burundi, Mauritania, Myanmar, Zambia and more. The good Samaritan in the US has poked the WTO to cease its provisions to China, which is a G-20 member and accounted for almost 12 per cent of global merchandise trade from 2015-2017; South Korea, which is an OECD member, a G-20 member, and is listed as a "high-income country" by the World Bank; Singapore, which is another "high-income country" and accounted for nearly 2 per cent of global merchandise trade. While the US's concern is plausible, its unilateralism irrationally provokes targetted nations, especially as it presents suggestions to WTO, which happens to be a regulator of multilateral trade. S&DT constitutes greater flexibility in the application of commitments and use of policy instruments with an added obligation on developed countries to treat developing countries more favourably. In fact, S&DT aims to uplift poor farmers in developing countries through subsidies at the ground level. S&DT provisions are grouped into four categories: Longer time periods for implementing agreements and commitments; Measures to increase trading opportunities for these countries; Provisions requiring all WTO members to safeguard trade interests of developing countries; Support to help developing countries build infrastructure for WTO work, handle disputes and implement technical standards. Further, some WTO agreements also constitute special privileges for LDCs, including longer timeframes or exemptions from commitments. The fact that countries self-declare their status to WTO and, hence, fall in the ambit of S&DT has irked the US. It wants WTO to retract such members that are developing but do not remain in need of S&DT. It is rather arrogant on US's part to decide whether or not such countries require S&DT. Coming from a developed nation like the US, such a demand directly impinges on a developing nation's attempt to rise more than proffering altruistic support for LDCs. Sitting atop the global economy, the US's stance over restricting S&DT provisions to India, China, South Korea presents another moment to realise its long-practised propensity for dominance.

The two-day ministerial meeting of 23 WTO member countries, which concluded with the Delhi Declaration on Tuesday at New Delhi, stressed on two key issues involving the US – first, finding a resolution at the earliest to the deadlock over appointment of member countries to WTO's appellate body that will ensure robust functioning of WTO's dispute settlement mechanisms which have been stalled by the US; second, the preservation of flexibilities offered to developing countries and LDCs under S&DT which are guaranteed rights under WTO norms. The declaration was signed by 17 of the 22 participating countries, while five others — Kazakhstan, Turkey, Argentina, Brazil, and Guatemala — did not sign on technical grounds. A classic authoritarian move by the US has urged prominent developing nations to gather and voice their dissent in a proxy democratic argument which only WTO can resolve. Terming it "an unconditional right", India's ambassador to WTO, J S Deepak, asserted that "India will continue to use such S&DT flexibilities in existing and new agreements. His words reverberated across the 17 signatories to the Delhi Declaration who explicitly stated their dissent over US's draft general council decision outlining 'procedures to strengthen the negotiating function of the WTO'.



Our contributor helps bringing the latest updates to you

Share it