FICCI urges govt to use WTO mini-ministerial platform for multilateral trading

Industry body FICCI on Monday urged the government to use the WTO mini-ministerial platform for creating alliances and consolidating support among member countries to revitalise the multilateral trading system. "It will help in effectively countering attempts by some countries to dilute the importance of multilateralism and weaken the World Trade Organisation (WTO)," said Sandip Somany, President of the Federation of Indian Chambers of Commerce and Industry (FICCI).

"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." The WTO mini-ministerial is being held in the national capital on Monday and Tuesday.

In a letter sent to the Ministry of Commerce and Industry, the chamber said that it would like the 'special and differential treatment' (S&DT) to continue at WTO for all developing and least developed members as its provisions are an integral part of multilateral trade rules. Due to the wide diversity in development levels among WTO members, there is a need for sufficient flexibilities.

Just to cite one specific instance, India still has over 36 crore poor people, of which 7.3 crores are in extreme poverty. "So we just cannot wish away the continued need for S&DT provisions for developing economies like India," said Somany in the letter. Any dynamic institution needs to periodically undertake reforms. WTO disciplines and rulebook to need to be updated so that they stay relevant and are better-equipped to handle new and emerging trade issues of the 21st century, he said.

At the same time, it is essential to preserve the prime position of WTO in the global trading system and it should be made stronger. "Reform or modernisation 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," he said. The practice of decision-making by consensus should continue. While it may be useful to bring in select new issues on the agenda, it should not be done by replacing all the old issues which 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-subsidisation by certain developed members, said Somany. He also pointed out the immediate need to resolve the impasse in appellate body appointments.

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 localisation 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 localisation restrictions may limit the ability of the developing countries to gain from building their national digital technological capacity and skills.

In the absence of clarity on the impact of such critical issues, it may be premature to attempt rulemaking in e-commerce and thus we need to be extremely cautious in our approach in this area, said the FICCI president. 

(With inputs from agencies.)