Academic journal article Current Politics and Economics of South, Southeastern, and Central Asia

Role Model or Institutional Spoiler?: India's Schizophrenic Relationship with the WTO

Academic journal article Current Politics and Economics of South, Southeastern, and Central Asia

Role Model or Institutional Spoiler?: India's Schizophrenic Relationship with the WTO

Article excerpt

INTRODUCTION

On July 23, 2014 the Indian delegation at the World Trade Organization (WTO) indicated that it could not support the implementation of the Trade Facilitation Agreement - the centrepiece of the Bali Agreement reached in December 2013 (Bridges 2014 - July 24). As WTO decisions are taken by consensus, India's failure to render support effectively put the progress made at the WTO Ministerial meeting in Bali on hold. The Bali Agreement was widely touted as a major accomplishment and the first significant progress arising from the long running Doha Development Round. For many, it was seen as the first step in both moving the Doha Development Round to a successful conclusion and re-establishing the reputation of the WTO as an important institution for engaging in trade negotiations (Azevêdo, 2013; WTO, 2013; Kerr, 2014). India had accepted a last minute compromise so that an agreement in Bali could be achieved. Its subsequent withdrawal of support in July, and thus the continued stalemate in the Doha negotiations, can thus potentially damage the WTO and significantly limit its effectiveness as an international organization.

The impasse at the WTO is considered of sufficient interest for President Obama to have had it on the agenda for his first meeting with Indian Prime Minister Modi on September 30th 2014 (Office of the Press Secretary, 2014). Given that WTO issues are seldom addressed at the Presidential level in the Obama administration, it underlines the seriousness of the situation for the WTO. On October 16, approximately two months after India's change of position, the WTO's Director General Roberto Azevêdo in a report to the Trade Negotiations Committee stated that:

... We have not found a solution to the impasse. ... it is my feeling that a continuation of the current paralysis would serve only to degrade the institution - particularly the negotiating function. ... This could be the most serious situation that this organization has ever faced (Azevêdo, 2014).

Why India has chosen to threaten the viability of an institution that it has so long been actively engaged with - India was a founding member of the General Agreement on Tariffs and Trade (GATT), the precursor to the WTO, in the late 1940s - is difficult to fathom. As recently as 2011 India was lauded by the WTO in its Trade Policy Review of the country as a model of trade liberalization (WTO, 2011). Further, the current difficulty at the WTO relates to a relatively arcane matter related to agricultural subsidies, hardly a topic worth crippling a venerated international institution over. This paper provides an examination of the 2011 Trade Review of India conducted by the WTO, a high point in India's relationship with the WTO, and then examines India's tactics at the WTO subsequent to the review. It concludes with a discussion of the apparent conflict between India's interest in having strong rules for trade and its current behaviour as an institutional spoiler.

INDIA AND THE WTO

India was one of what would subsequently become known as developing countries that took an active part in the forty one country negotiations that took place to establish an International Trade Organization (ITO) at the end of World War II. While the US and the United Kingdom dominated the negotiations, India was more than willing to take a strong stand on issues it considered important and was influential in introducing concerns for what would later become known as developing countries (dos Santos, n.d.; Scott, 2010 )1. India was considered to be the unofficial leader of the group pushing for inclusion of development issues in the ITO (Toye, 2003). At the negotiations in Havana where the ITO was drafted, India had the largest delegation from the developing world with 36 delegates - except for the host, Cuba, which had 52 (dos Santo, n.d.). Many developing countries had only one or two delegates.2 India had less interest in the GATT, which at the time was seen as a sub-agreement of the ITO and a forum where developed countries would negotiate down their very high pre-war tariffs. …

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