World Trade Organisation Current Affairs - 2019
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The Ministry of Commerce and Industries is arranging a mini-ministerial meeting of developing countries on May 13-14 to discuss the future of the multilateral body, World Trade Organisation (WTO) and the development agenda.
India is expected to invite close to two dozen countries for discussions on May 13-14. It is second such initiative undertaken by India since talks collapsed in Buenos Aires in December 2017. Unlike the earlier initiative, the US and the European Union will not be part of the discussions this time.
Agenda for the Discussion
- A global framework for e-commerce, an issue that is being pushed hard by the US. China is not averse to negotiations and maybe India would be willing for the discussions.
- US proposal to do away with special and differential (S&D) treatment for developing countries such as India, China, Brazil and South Africa. The special and differential treatment allows developing countries to maintain higher duties and implement agreements at a slower pace than the developed world.
- The US is arguing that the better-off developing countries are eating up the gains that should accrue to the poorer nations in the category.
- Ensure that WTO remains the key fulcrum of global trade and attempts by the US to do away with the principle of a consensus-based approach.
- Discussions around reform of the dispute settlement mechanism which the US is pushing for aggressively.
India and other countries are demanding that there was a need to ensure that S&D treatment remains as they are still home to a large number of poor and vulnerable sections.
The International Monetary Fund in its World Economic Outlook has suggested various policy measures to arrest the downward growth trend. They are:
- Resolving cooperatively and quickly the trade disagreements which may derail the global trade and addressing the resulting policy uncertainty, rather than further creating harmful barriers and destabilizing an already slowing global economy.
- Accomplishing the call of G20 leaders to reform the World Trade Organization.
- Adjusting the fiscal space where it is low in a growth-friendly manner to ensure public debt is on a sustainable path, while protecting the most vulnerable.
- The monetary policies of advanced economies should continue to normalize carefully by taking necessary steps to address the slowing growth momentum.
- The IMF also advocates for measures to boost potential output growth and enhance inclusiveness across all economies to broaden the growth.
The World Economic Outlook notes that policy space for countries is more limited than in 2008. As a result, multilateral cooperation will be even more important in the event of a sharper decline in global growth. The IMF notes that it is here the multilateral institutions must be equipped with adequate resources to deal with the rising risks.