India Sets Terms for WTO Plurilateral Agreements

Syllabus: GS2/IR; GS3/Economy

Context

• After opposition to plurilateral pacts at the World Trade Organisation’s (WTO’s) Ministerial Conference this year, India offered its proposal on WTO reforms which could help insert plurilateral agreements within the WTO framework.

Background

• India had blocked the insertion of China-backed Investment Facilitation for Development (IFD) plurilateral pact into the WTO rulebook. 
• The change in India’s position came after the BRICS summit and the bilateral talks with China. 
  • The New Delhi Declaration said BRICS members recognise the importance of identifying pathways for plurilateral initiatives. 

What are Plurilateral Agreements?

• A plurilateral agreement is a trade deal between a group of WTO members rather than all WTO members. 
  • For example, if 50 WTO members agree on a particular set of rules, the remaining members are not automatically bound by those rules.
• A plurilateral agreement can become part of the WTO’s official rulebook only if all WTO members agree to it.

Difference Between Plurilateral Deals and Multilateral WTO Agreements?

• Multilateral agreement involves the WTO membership as a whole. The idea is that all WTO members negotiate the rules together. 
• On the other hand, plurilateral agreement involves only a group of WTO members. 
  • Countries that join the agreement have to follow its rules, while countries that do not join are generally not bound by those rules.

Why is India Against some Plurilateral Deals?

• India has been concerned that plurilateral agreements could allow a group of powerful or interested countries to create new rules without the participation of everyone. This becomes especially important for developing countries.
• India’s argument is that WTO members should first decide common rules and safeguards for all plurilateral agreements.
  • It does not want one agreement to be added first and the broader rules to be decided later.

India’s Terms to Advance Talks on WTO Plurilateral Agreements

• Right to opt out: WTO members should have the right to not participate in a plurilateral agreement, without losing their existing rights under the WTO.
• Protect developing countries: Special and Differential Treatment (S&DT) should remain central so that plurilateral agreements do not ignore the concerns and priorities of developing and least-developed countries.
• Avoid overburdening the WTO: Too many plurilateral agreements could put pressure on the WTO’s limited budget and administrative resources.
• Protect essential WTO functions: WTO resources should not be diverted from important activities such as technical assistance and capacity building for developing countries.

Source: IE