Economy

Need to clarify ‘development’ within WTO: US

U.S. Trade Representative Robert Lighthizer (left), Mexico's Secretary of Economy Ildefonso Guajardo Villarreal (centre), and Switzerland's Johann Schneider-Ammann, gather for before the start of the Ministerial Conference of the World Trade Organization in Buenos Aires, Argentina, on Monday.   | Photo Credit: AP

In a veiled attack against countries, including India and China, batting for the improvement of trading prospects of the developing world, the U.S. has said there was a need to clarify the understanding of ‘development’ within the context of the World Trade Organisation (WTO).

In his opening Plenary Statement at the meeting of the WTO’s highest decision-making body being held here, the U.S. Trade Representative (USTR) Robert Lighthizer said, “we need to clarify our understanding of development within the WTO. We cannot sustain a situation in which new rules can only apply to the few, and that others will be given a pass in the name of self-proclaimed development status.”

This development comes in the backdrop of Commerce Minister Suresh Prabhu saying at the Plenary session of the ongoing WTO’s Ministerial Conference that while “the expansion of global trade is our vision in the WTO,” the outcome of the expansion of global trade must be development.

Mr. Lighthizer, in his remarks, 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 (WTO) 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.”

According to the (U.S) Central Intelligence Agency, China had topped the list of economies by Gross Domestic Product (purchasing power parity), followed by the European Union and the U.S. (2016 figures). India was ranked fourth, while Brazil and Indonesia (in the developing country category) were eighth and ninth respectively.

India demands differential treatment for developing countries

In his statement, Mr. Prabhu had 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,... we cannot ignore that India is home to more than 600 million poor people.” The minister added that, therefore, “we (India) are legitimate demandeurs for special and differential treatment for developing countries.”

Mr. Prabhu further said, “India calls upon the WTO membership to re-endorse the centrality of development (the agenda to improve the trading prospects of developing nations) in WTO negotiations without creating new sub-categories of countries.”

Mr. Lighthizer said it was impossible to negotiate new rules when many of the current ones are not being followed. “This is why the US is leading a discussion on the need to correct the sad performance of many (WTO) Members in notifications and transparency. Some Members are intentionally circumventing these obligations, and addressing these lapses will remain a top U.S. priority.”

India has already made it clear that it will not accept a “permanent solution” to the issue of public stockholding for food security purposes with onerous conditions including notification and transparency requirements that are difficult to comply with, and in turn making it tough for the (Indian) government or other developing countries to meet the food security needs of their people.

The USTR said the U.S. believes that much can and should be done at the WTO to help make markets more efficient. Indirectly criticising countries like China and to some extent India that have several Public Sector Units, the US trade official said, “We are interested in revitalizing the standing bodies to ensure they are focused on new challenges, such as chronic overcapacity and the influence of state-owned enterprises.”

WTO is becoming litigation-centered organisation: US

Responding to criticism that the US, by blocking the re-appointment of judges to the WTO’s Appellate Body (AB), was undermining the WTO’s Dispute Settlement Mechanism (DSM), Mr. Lighthizer said, “many are concerned that the WTO is losing its essential focus on negotiation and becoming a litigation-centered organisation. Too often members seem to believe they can gain concessions through lawsuits that they could never get at the negotiating table.” He added that, “We have to ask ourselves whether this is good for the institution and whether the current litigation structure makes sense.”

According to the Centre for WTO Studies at the Indian Institute of Foreign Trade, however, the U.S. had refused to support re-appointment of the then AB Member from South Korea on the grounds that it “will not support any individual with a record of restricting trade agreement rights or expanding trade agreement obligations.” It added that, “having been one of the biggest users and beneficiaries of the DSM, the U.S was now causing a serious impediment to its functioning. “

On other issues, Mr. Lighthizer said the US was “working closely with many Members in committee and elsewhere to address real-world problems such as Sanitary and Phytosanitary (SPS) barriers (relating to measures taken to protect human, plant and animal life or health).”


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(Arun S. was in Buenos Aires at the invitation of the Indian Commerce Ministry)
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Printable version | Jun 24, 2021 9:49:45 PM | https://www.thehindu.com/business/Economy/need-to-clarify-development-within-wto-us/article21461527.ece

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