MC14—the 14th ministerial conference of the World Trade Organization (WTO)—held in Yaounde, Cameroon from March 26 to 29, captured the tumult and fears surrounding global trading principles and patterns. Though it is customary for ministers from WTO member countries to assemble every two years to explore ways to further and deepen global trade liberalisation under a consensus-driven and rule-based system, the background this time was grim and cloudy. The Trump Administration’s “reciprocal tariff” onslaught on most countries exposed a callous disregard for using a multilateral, structured route to define the future trajectory of cross-border commerce.
The war in West Asia muddied the waters even further. The neglect of trade multilateralism occurred despite its chequered history, which can be traced back to the 1944 Bretton Woods Conference and the GATT years (1947–1994). The Uruguay Round (1986-1994) resulted in the epochal Marrakesh Agreement and the formation of the WTO. In fact, the Doha Round, launched a quarter century ago with the basic tenet of improving developing countries’ trading prospects, had fallen into a morass. A stalemate regarding dispute resolution was the clearest manifestation of this sloth.
It is curious that MC14 took place despite such adversities, but ironically, the enthusiasm was not due to any allegiance to successfully concluding the Doha Round. Behind the faithful conduct of the meeting was the developed countries’ project to undermine the WTO’s foundation, besmirch the Doha Development Agenda, and tilt the norms more in their favour. During the Cameroon meeting, the US-EU-UK axis attempted to jettison the cardinal “Single Undertaking” principle enshrined in the Marrakesh Agreement, which treats all negotiated agreements as a single, indivisible package. Non-discriminatory treatment codified as the most favoured nation (MFN) concept also was taken up for a premature review at the behest of the axis, as was the hard-won safeguard of Special and Differential Treatment (SDT) for developing countries.
Defending Consensus
The WTO system has resisted the internecine strife with some resilience. The developed-world bloc, despite support from some others, could not easily push the destructive “reform” agenda at MC14. Notably, India succeeded in preventing the adoption of the Investment Facilitation for Development (IFD) agreement as the pioneering “plurilateral” pact under the world body, despite nearly 130 countries among 166 WTO members, including the US and China, pitching for it. Beyond the unsavoury obligations the IFD could impose on India, New Delhi worries that a pivot to a coalition-based fractional decision-making could cause multilateralism to fade into irrelevance.
Digital Divide
Despite its shortcomings and the proliferation of free trade/regional trade pacts, multilateralism has offered benefits. It has guarded against historical advantages and privileges riding roughshod over the weaker nations, while also protecting small farmers, facilitating small and medium-sized firms, and contributing to overall productivity and efficiency gains. At MC14, Washington could not secure a multilaterally anchored extension of the Customs duty moratorium for electronic transmissions. But a miffed USTR Jamieson Greer later stated bluntly that if the WTO cannot achieve “this commonsense aim,” the US will work outside of it “with all interested partners to get it done.”
The WTO’s next General Council in Geneva is likely to see a more aggressive attempt by the west to strike at the core of multilateralism. In this wake, India has a compelling case to shield the existing system. While conventional safeguards like SDT are important to the country, it also has a large stake in influencing the rules governing emerging technologies and cross-border capital flows. Public stockholding programmes for food security, and the freedom to maintain relatively high bound tariffs ought to be protected first. Equally importantly, the rapid growth of the digital economy makes it all the more important for India to get its taxation powers defined and duly protected under the negotiated trade-off. New Delhi must put its best foot forward to counter the attack on the WTO, and use its goodwill to drum up support for the cause.