9.3. Relevance of WTO in Present Day Order

♤ With the multilateral trade negotiations process under the WTO being a painfully slow one requiring broad-based consensus, regional trade agreements (RTAs) have progressively assumed greater importance and a growing share in international trade.

♤ While RTAs are broadly compliant with WTO mandates and remain broadly supportive of the WTO process, they remain second-best solutions that are discriminatory in nature against non-members and are inefficient as low cost producing non-members lose out to members. While bilateral RTAs have no equity considerations, mega-regional trading groups may not necessarily be equitable if membership is diverse and small countries may lose out either way—if they are part of it they may not have much say and if they are not, they may stand to lose.

♤ India has always stood for an open, equitable, predictable, non-discriminatory and rule- based international trading system and views RTAs as building blocks in the overall objective of trade liberalization as well as complementing the multilateral trading system under the WTO.

♤ Regional and thematic plurilateral agreements are reshaping trade flows which is thwarting progress of emerging economies. Industrialised countries are increasingly becoming against WTO led trade liberalisation. These pacts have slowly reduced the importance of WTO.

♤ Trans Pacific Partnership: The Trans-Pacific Partnership (TPP) agreement is one new mega- regional block that has become a reality and has implication for India.

o The TPP trade agreement is very comprehensive and not only encompasses the scope of tariff-eliminating mega regional trade pacts, but also aims at setting higher global standards for international trade through lower benchmarks for nontariff barriers, more stringent labour and environment regulation, higher intellectual property rights (IPR)

protection, greater transparency in government procurement and limiting advantages to state-owned enterprises (SOE) and transparency in health care technology, competitiveness and supply chains.

o It includes new and emerging trade issues and cross-cutting concerns such as internet and digital economy.

o In the short run, the trade impact of the TPP may not be seriously adverse but careful analysis is required for adapting and responding to the challenges in the long run.

o Recently, United States, the leading proponent, has left the grouping. Despite that, the remaining members have decided to revive the deal without US participation.