WTO showdown looms as India digs heels on non-trade agenda

India to oppose discussions on environment, gender, and MSMEs at the upcoming WTO ministerial in Abu Dhabi.

India is poised to adopt a firm stand at the World Trade Organisation’s biennial meeting scheduled for the end of February, opposing any work programme or negotiation mandate on non-trade issues. New Delhi contends that discussions or plans regarding environmental, gender, and micro, small, and medium enterprises fall outside WTO’s purview, and the organisation should refrain from intervening in these matters. Indian officials are strongly against such negotiations in the future, asserting that the inclusion of external stakeholders such as non-government organisations and private entities should not influence trade policymaking.

India’s official position is that labour and environmental issues should be debated in other multilateral forums like the United Nations, which are more suitable for discussions on these topics, given their broader implications beyond trade. India also criticises the establishment of trade barriers under the guise of sustainable development, a tactic it views as being promoted by wealthier nations without the unanimous consent of all members.

READ | Chinese economy: Can innovation revive its growth engines?

The 13th ministerial conference will take place from February 26 to 29 in Abu Dhabi, United Arab Emirates where trade ministers from 164 countries discuss critical issues, including agriculture, fisheries, and e-commerce, making it the WTO’s premier decision-making gathering.

India’s stance at the upcoming WTO meeting reflects a broader strategic shift in its trade policy. While committed to global engagement, India is increasingly prioritising its own development goals and pushing back against what it perceives as unfair practices by developed nations. This shift is driven by several factors.

Protecting domestic interests: India is particularly firm on not addressing agricultural issues at MC-13 without a permanent solution to public stockholding. India’s public stockholding programme, crucial for food security and supporting small farmers, is a prime example.

Developed nations criticise it as distorting markets, but India views it as vital for its unique needs and demands a permanent solution before engaging on other agricultural issues. Similarly, India opposes the inclusion of labour and environmental issues in WTO discussions, arguing that these are best addressed through dedicated forums like the UN and should not be used as trade barriers.

Seeking equitable treatment: India, along with many developing nations, feels disadvantaged by protectionist measures disguised as sustainability initiatives. The EU’s carbon border adjustment mechanism (CBAM) and deforestation laws are seen as unfairly burdening developing nations without their consent. India emphasises the need for a level playing field and equitable consideration of developing countries’ concerns within global trade rules.

Championing inclusivity: India advocates a more inclusive and representative WTO, ensuring the voices of developing countries are heard and addressed in trade reforms. This includes demanding better representation in decision-making bodies and ensuring trade rules reflect the diverse needs and challenges faced by developing economies.

Bilateral engagements: While India takes a firm stance at the WTO, it also prioritises bilateral engagements to address specific concerns. The ongoing dialogue with the EU on the CBAM demonstrates this approach. India recognises the importance of addressing climate change but seeks solutions that do not disadvantage its development goals.

The divide between India and the developed world is becoming increasingly apparent, with developed countries pushing for formal discussions on non-trade issues before the MC13. These nations advocate for the inclusion of women’s economic empowerment in WTO discussions, a move India opposes, arguing these are social and domestic issues better addressed in specialised UN conventions.

Many developing countries echo India’s concerns over introducing new issues at the WTO, fearing increased protectionism from developed nations under the pretext of sustainability. While WTO members recognise the importance of sustainability, there is apprehension about the potential misuse of environmental regulations for protectionist ends. Developing countries are advocating better representation and a more inclusive approach to environmental challenges within global trade rules.

Last year, India and South Africa highlighted their concerns at the WTO over environmental measures being used as covert protectionist tools. Their joint statement pointed to unilateral initiatives like the CBAM and deforestation law as potentially harmful to trade, especially for developing nations lacking the means to comply.

The issue of WTO reforms was a focal point at the recent G20 working group on trade and investment, underscoring the need for countries like India to champion their interests while maintaining diplomatic relations. The discourse on WTO reforms should consider the broader global context, ensuring that the developing world’s voice is heard and addressed.