Indian Trade Minister Says Multilateralism at Crossroads, Outlines "Multi-Pronged" Approach

20 July 2017

Indian Commerce and Industry Minister Nirmala Sitharaman called for taking a “multi-pronged approach” towards supporting multilateralism in the trade world, suggesting that “multilateralism as embodied at the WTO is at a crossroads” during a speech to a Geneva audience on Tuesday 18 July.

The Indian official gave a speech at the Graduate Institute of International and Development Studies under the theme “Reclaiming Multilateralism,” and met earlier with WTO Director-General Roberto Azevêdo on the preparations for this December’s WTO ministerial conference.

The global trade body’s Eleventh Ministerial Conference is (MC11) scheduled for 10-13 December in Buenos Aires, Argentina, with negotiators looking at ways to discipline harmful fisheries subsidies, along with potentially advancing some outcomes on agriculture, though these and other topics are still under negotiation.

Sitharaman also spoke regarding the global geopolitical context on trade, warning against “protectionist” and “inward-focused” policies and political approaches being seen in some parts of the world, without referring to specific countries by name.

“History teaches us that inward looking policies rarely achieve common good,” she said, adding that the lesson applies not just to trade, but also to environmental concerns, humanitarian issues, and other topics.

New issues, Doha “legacy issues”

The Indian official’s speech focused primarily on the WTO context, looking both at the negotiations to update global trade rules along with the function of the organisation’s dispute settlement branch.

Discussing first the domestic context in India, including economic and social issues such as its struggles with extreme poverty in some internal regions, she described the country as a “microcosm of similar problems faced by most developing countries.” She added that New Delhi does not play the role of “naysayer for the sake of it” at the global trade body, given the wide-ranging implications of trade rule-making.

Among other points, she reaffirmed earlier concerns raised by her country’s negotiators over how and whether to deal with so-called “new issues” in the WTO negotiating context – an issue that has long proved contentious, including two years ago at the Nairobi ministerial conference, when countries agreed to disagree on whether to reaffirm the Doha Round’s mandate and later ministerial declarations and decisions.

In Nairobi, the final declaration also said that while “officials should prioritise work where results have not yet been achieved, some wish to identify and discuss other issues for negotiation; others do not. Any decision to launch negotiations multilaterally on such issues would need to be agreed by all members.” (See Bridges Daily Update, 19 December 2015)

During her speech on Tuesday, Sitharaman noted the perception of India “being less than enthusiastic about new issues in the negotiations and is even sometimes accused of standing in the way of the WTO’s progress.”

“Nothing could be further from the truth.” she said, noting that global challenges, including those involving trade, are regularly evolving.

However, she added that the South Asian economy has “good reason to be cautious,” suggesting that these new issues need to be better understood, given varying experiences with these topics at the domestic level, among several other factors.

She also warned that these new issues can “divert attention from priority areas for which mandates exist.” Among the new issues she referred to on Tuesday were proposed binding rules on e-commerce and steps on investment facilitation, which have been backed by some WTO members.

“While some countries are pushing for initiating negotiations on the new issues, we cannot ignore many of the legacy issues of the Doha Round,” she said, saying that WTO members need to decide by consensus over the end of the Round and calling for members to “engage in good faith” to do so.

She also suggested that the decisions made at the global trade body in the next couple of years could have reverberations for a long time to come, and said that there was a need to ensure “mutual trust” among the WTO membership.

That trust, she said, “unfortunately seems to have been serially eroded over the years and dealt a body blow by the developments at the Nairobi ministerial conference,” she said, citing concerns over whether all members felt ownership over the final outcomes, among other questions.

Three-pronged approach

Moving forward, Sitharaman advocated for an approach at the WTO built around “strengthening the system, countering protectionism, and fostering development.”

For example, she suggested that negotiating at WTO ministerial conferences be conducted in a more inclusive manner, starting immediately, and also said that the organisation’s dispute settlement branch is in need of reform. Regarding the latter, she specifically suggested changes to the system of Appellate Body appointments, moving from two four-year terms to one single term of five to six years.

“We need to make sure that the Appellate Body members retain their autonomy, without being influenced by the governments of their member countries,” she said.

WTO members have lately struggled to resolve a disagreement over advancing the appointment of new members to the organisation’s highest court, even though two of these members will see their terms end this year and various proposals have been put forward on the subject, according to Geneva trade officials familiar with the talks.

Sitharaman also called for countering protectionism, such as by stopping the “misuse” of sanitary and phytosanitary measures with “protectionist intent” and taking other steps in the areas of agricultural tariffs and trade remedies.

The final pillar raised by the Indian official focused on topics that she said fell under the subject of development, such as food security and past pledges to provide duty-free, quota-free market access on 97 percent of product lines from least developed countries.

The South Asian economy, which is home to over 1.3 billion people, has raised concerns repeatedly over making sure farm subsidy rules do not unfairly inhibit developing countries from buying food at minimum prices as part of their public stockholding programmes for food security purposes.

Sitharaman argued that over 800 million are hungry or malnourished in her country, while noting that the issue is not just important to India, but also to many other developing nations. She also called for a lasting solution – referring to an earlier WTO deal reached in Bali four years ago as a “partial” solution to the situation. (For more on the WTO negotiations, see related story, this edition)

India has also put forward a WTO proposal for a “trade facilitation agreement in services,” which it says would build off the approach taken under the organisation’s Trade Facilitation Agreement (TFA) that involves goods trade. The TFA has been in force since early 2017. (See Bridges Weekly, 23 February 2017)

Sitharaman referred to the services proposal in her speech on Tuesday, urging WTO members to view the proposal “objectively” and with an “open mind.”

ICTSD reporting.  

This article is published under
20 July 2017
Coming Soon 21 July, Geneva, Switzerland. THE BELT AND ROAD INITIATIVE IN THE CURRENT TRADE AND INTEGRATION CONTEXT. This informal roundtable is being organised by the International Centre for Trade...
20 July 2017
US Trade Representative Robert Lighthizer sent a formal notification to Seoul last week calling for a "special session" of the joint committee under the bilateral US-Korea Free Trade Agreement (KORUS...