In critical remarks seemingly aimed at China, India and some other key developing nations, US trade representative (USTR) Robert Lighthizer on Monday suggested some nations are given “a pass in the name of self-proclaimed development status” at the World Trade Organization (WTO). Lighthizer’s strong criticism of special and differential treatment to major developing countries drew a subtle rebuttal from India, which made suitable changes in the last minute to commerce minister Suresh Prabhu’s prepared speech for the plenary session of the ongoing WTO ministerial to counter the USTR’s grossly simplistic assessment. Prabhu said although India is emerging as the fastest-growing large economy in the world, it’s home to 600 million poor people and its per capita income still remains very low. Without providing any evidence to endorse his assertion, Lighthizer claimed at the WTO gathering that five of the six richest nations seek the “developing country” status. In fact, according to the World Bank data for 2016, only China has the developing market status among the world’s top six economies. In his address at the ministerial, Prabhu said: “We are increasingly seeing that the discourse on development at the WTO is sought to be deflected by specious arguments based on aggregate GDP figures.” “While in India we are proud of our GDP and growth rates of recent years, propelled by innovative economic policies of my government, we cannot ignore that India is home to more than 600 million poor people. Therefore, we are legitimate demandeurs for special and differential treatment for developing countries.”
According to a forecast by global rating agency Standard & Poor’s (S&P), India’s per capita income would touch $2,000 in 2017, the lowest among all investment-grade sovereigns, even though it will emerge as the fastest-growing major economy over 2017-20. In fact, S&P recently kept its India rating unchanged at the lowest investment grade, citing low per capita income, among others. Without naming any nation, Prabhu sought to remind developed countries that many of them have “benefitted from long periods of derogation from GATT rules in the area of agriculture and textiles”. Earlier in the day, Lighthizer said: “There is something wrong, in our view, when five of the six richest countries in the world presently claim developing country status.” “Indeed, we should all be troubled that so many members appear to believe that they would be better off with exemptions to the rules. If in the opinion of a vast majority of members playing by current WTO rules makes it harder to achieve economic growth, then clearly serious reflection is needed,” the USTR said.
Lighthizer said the WTO is losing its focus on trade negotiations in favor of litigation, reflecting the Trump administration’s critical attitude towards the multilateral trading body. Separately, at an interaction session with media later on Monday, Prabhu said in India, cultivators and agricultural labourers together number over 250 million, more than the total population of many countries. The total number dependent on agriculture in one way or another, is even higher, close to 600 million. Nearly 98% of Indian farmers belong to the low-income or resource poor category and most of them are engaged in subsistence farming. Many of them have to deal with unfavourable agro-climatic conditions, further compounded by climate change, of which India is a victim. “Our circumstances make it imperative for us to balance trade liberalisation with the need to protect their livelihood,” Prabhu said.
