Utilize Mini-ministerial to create support for revitalizing WTO: FICCI to Government

May 13, 2019

• Resolve the impasse in appellate body appointments

 

NEW DELHI, 13 May 2019: FICCI has urged the Indian Government to use the mini-ministerial platform for creating alliances and consolidating support among member-countries to revitalize the multilateral trading system.

 

"It will help in effectively countering attempts by some countries to dilute the importance of multilateralism and weaken the WTO," said Mr. Sandip Somany, President, FICCI.Complimenting the initiative of convening the mini-ministerial meeting, Mr. Somany observed, "We at FICCI feel this is a much-needed step as WTO has been under severe stress in recent times amid rising trade tensions and questions are raised over the relevance of the institution".

 

In a letter sent to the Ministry of Commerce & Industry, the apex chamber said that it would like the 'Special and Differential Treatment� (S&DT) to continue at WTO for all developing and least developed members, because S&DT provisions are an integral part of multilateral trade rules. In view of the wide diversity in the level of development among WTO membership, there is need for sufficient flexibilities. "Just to cite one specific instance, India still has over 360 million poor and as of end-May 2018, it had 73 million people in extreme poverty. So, we just cannot wish away the continued need for S&DT provisions for developing economies like India," FICCI President pointed out.  

 

Alluding to the issue of WTO reform Mr. Somany said, "Any dynamic institution needs to periodically undertake reforms. WTO disciplines and rulebook too need to be updated so that they stay relevant and are better-equipped to handle new and emerging trade issues of the 21st Century". At the same time, it is essential to preserve the prime position of WTO in global trading system and it should be made stronger. "Reform or modernization of the WTO should be approached in a balanced manner involving all sections of the WTO-membership and taking their interests as well as concerns into account," FICCI President remarked.

 

The practice of decision-making by �Consensus� should continue in WTO. While it may be useful to bring in select 'New Issues' in the agenda, it should not be done by replacing all the old issues (many of the old issues are long-standing and critical for developing countries). The reforms must not perpetuate or widen the asymmetries of existing agreements. In fact, the reforms should address the prevailing distortions, for example, in agriculture trade resulted from over-subsidization by certain developed members, argued FICCI.  

 

Mr. Somany also pointed out the immediate need to resolve the impasse in Appellate Body appointments. "WTO reforms cannot ignore the ongoing problems regarding appointment of new members to the Appellate Body. If the Appellate Body gets paralyzed, it will seriously damage credibility of WTO. Resolving this on priority basis will ensure smooth continuation of the institutional mechanism for preserving therights and obligations of members," FICCI President stated.

 

As regards the proposals favouring WTO talks on electronic commerce, it is necessary to first thoroughly appreciate the implications of fast-changing digital trade, free flow of data across borders, infrastructure localization, and many other such factors before discussing binding trade rules in this area.

 

In view of the sharp 'digital divide' (in terms of digital infrastructure and access to advanced digital technologies), binding rules on cross-border data transfers and localization restrictions may limit the ability of the developing countries to gain from building their national digital technological capacity and skills, as articulated by UNCTAD (United Nations Conference on Trade and Development) and South Centre. In the absence of clarity on the impact of such critical issues, it may be pre-mature to attempt rulemaking in e-commerce and thus we need to be extremely cautious in our approach in this area, the apex chamber pointed out.