There are several issues associated with the working of World Trade Organization, which have eroded its credibility. Analyse.
World Trade Organization (WTO) is a specialized agency, relating to matters of international trade. It was established as multilateral trading agency after Uruguay round of erstwhile GATT (Generalized Agreement on Trade & Tariff).
Challenges faced by WTO can be seen in the light of receding multilateralism:
- Countries are now preferring bilateral & multilateral pacts. E.g. RCEP, Britain-EU trade deal.
- USA has literally made the institution dysfunctional, by preventing appointment to appellate.
- There is a general consensus that china was aided by WTO for its dumping policies, currency manipulation, etc.
- TRIPS and public health is sensitive issue for developing countries.
- Despite entering Doha round, there is still lack of consensus on finalizing agreement on Agriculture.
- WTO failed to prevent subsidies by developed countries to their farmers.
- Calculation of subsidies on agricultural goods based on outdated prices.
- Agreement on services, still doesn’t suit Indian interests on free movement of personnel, BPOs, IT sector, etc.
Despite credibility issues, WTO played a crucial role in increasing world trade. According to the world bank, after free trade expansion, world saw greatest reduction in poverty, never seen before in human history.
Thus, India need to lead the reform movement for making WTO more relevant to the changing times.