WTO Summit | Piyush Goyal says trade body's reform should focus on helping developing and poor economies, bats for multilateralism

Commerce and Industry Minister Piyush Goyal (File Image)

The long-due reform of the World Trade Organization (WTO) should be based on the global body's primary objective of helping support the economic development of the developing world and the Least Developed Countries (LDCs), Commerce and Industry Minister Piyush Goyal has said at the ongoing 12th ministerial conference at the WTO.

Speaking at a thematic session on WTO reform, Goyal however stressed that these reforms must also ensure that multilateral rule-making processes are neither bypassed nor diluted.

The once-in-two-year mega meeting of trade ministers from all 164 WTO member nations, which legislate on global trade, is currently ongoing.

Batting for multilateralism, Goyal said India strongly supports robust WTO reforms and a modernisation agenda that is balanced, inclusive and preserves the core principles of the current multilateral system.

Since the last ministerial was held in Buenos Aires in 2017, increasing polarisation has plagued the WTO, with developed and developing economies becoming entrenched in their positions.

Globally, economic blocs such as the Regional Comprehensive Economic Partnership (RCEP) in South East Asia and African Continental Free Trade Area (AFCTA), composed of all nations of the African landmass, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP11) of Pacific Rim nations have also risen.

Goyal said most countries are suggesting that the reform process should take place in the General Council and its regular bodies since these have the authority to act on behalf of the ministers. He said that reform discussions must not be held with the aim of undermining the authority of the existing bodies of the WTO.

Defunct dispute settlement

Goyal pointed to the fact that the top court for trade disputes at the WTO had often gone defunct in the recent past as some member nations have held up the election of judges to the seven-member Appellate Body. It functions as the WTO’s highest adjudicative body for settling trade disputes.

Each judge of the Appellate Body serves a four-year term, with the possibility of a one-time renewal. Dispute settlement is regarded by the WTO as the central pillar of the multilateral trading system, and as the organisation’s “unique contribution to the stability of the global economy”. But the United States under the previous Donald Trump administration had crippled the body by refusing to allow judges to be nominated.

It had even said the judges are paid far too much and perform little to justify this pay. It has also threatened to block the WTO’s biennial budget. Meanwhile, the appellate body in 2019 had ruled that the majority of India’s export promotion schemes are illegal and ordered them to be stopped within four months.

"We need to accord priority to the reform needs, especially to the crisis at the Appellate body, whose functioning should become more transparent and effective, the number of suggestions for reforming the WTO could result in fundamental changes in the institutional architecture thereby, running the risk of skewing the system against the interest of developing countries," Goyal stressed.

Therefore, the principles of non-discrimination, predictability, transparency, and very importantly, the tradition of decision making by consensus and the commitment to development underlying the multilateral trading system are sacrosanct, he added.

Focus on developing economies

Goyal also argued that the WTO needs to uphold Special & Differential Treatment (S&D) provisions for developing and LDC member nations to ensure equitable development. These provisions exempt developing countries from the strict trade rules and disciplines of more industrialised countries.

"S&D is a treaty-embedded and non-negotiable right for all developing members. The gaps between the developing and developed members have not narrowed down in decades but in fact, have widened in many areas. S&D provisions, therefore, continue to be relevant," the minister stated.