The Issues at WTO that Worry Developing Countries

  May 23, 2020

The Issues at WTO that Worry Developing Countries

Which issues are of worry to the developing countries?

With the World Trade Organisation (WTO) Doha Round not reaching any consensus and developing countries being disappointed, four issues have emerged that are of concern to them

1.   Plurilaterals;

2.   Negotiations on e-commerce

3.   Abolishing flexibilities available to developing countries;

4.   Dispute Settlement Mechanism (DSM) weakening.

Give details and how different countries see each one of them.

Plurilaterals: Discussed above

E-Commerce:  Large US technology firms dominate the digital economy space. Google and Facebook deal with data and services while Amazon sells goods and services.

India has taken steps to introduce e-commerce policy framework, online data protection and data localisation rules. India also needs to promote national champions. India’s laws and technology on cyber security, universal digital access and privacy need to be consolidated before we can join th global agreements.

US, EU, and Japan are in a great hurry to have WTO rules on e-commerce. The US wants no restrictions to data flow, the EU wants full protection of personal data, while others like India, countries of Africa and Indonesia feel it’s too early to make global rules at the WTO. Members that are interested may sign plurilaterals.

Special and Differential Treatment: SDT are flexibilities allowed by WTO to developing countries and LDCs in implementation of the WTO agreements. A few examples are

1.   Higher domestic support for agriculture

2.   Longer implementation period under various WTO agreements like TRIPS

3.   GSP

Now the US, EU and Japan argue that developing countries are sufficiently developed and do not need SDT which should be limited to LDCs alone. Most developing countries including India, China, and countries of the African group oppose this move. They argue that gap in the standard of living between developed and developing countries has only increased over the years and hence SDT must continue. Also, SDTs are part of the WTO agreement, so any change would require negotiations among all members.

Dispute Settlement Mechanism: India like many others joined WTO because of the DSM as it is impartial and objective. DSM has proven to be the most useful of the WTO bodies, settling over 500 trade disputes. But it is at risk of being dysfunctional with the US stopping the appointment of Appellate Body members. It will stop functioning from December 2019 with the retirement of last of the three members. Without DSB, the WTO will lose its value as countries cannot not be tried for violating WTO rules.