Model Answer
0 min readIntroduction
The World Trade Organization (WTO), established in 1995, is the only global international organization dealing with the rules of trade between nations. Built upon the General Agreement on Tariffs and Trade (GATT), it aims to promote free and fair trade, reduce trade barriers, and resolve trade disputes. WTO decisions, while not directly enforceable like domestic laws, carry significant weight due to the dispute settlement mechanism and potential for retaliatory measures. India, as a developing nation with a large agrarian population, has consistently advocated for special and differential treatment within the WTO, particularly concerning food security, a critical issue for millions of its citizens.
Mandate of the WTO
The WTO’s mandate encompasses several key areas:
- Administering Trade Agreements: The WTO oversees the implementation, administration, and operation of the covered agreements (e.g., GATT, GATS, TRIPS).
- Forum for Trade Negotiations: It provides a platform for further trade liberalization through negotiations.
- Settlement of Disputes: The WTO has a robust dispute settlement mechanism to resolve trade conflicts between member countries.
- Technical Assistance and Training: It offers assistance to developing countries to participate more effectively in the global trading system.
- Monitoring National Trade Policies: The WTO reviews the trade policies of its members regularly.
Binding Nature of WTO Decisions
WTO decisions are binding on member states through several mechanisms:
- Consensus-Based Decision Making: Most decisions are made by consensus, meaning all members agree.
- Dispute Settlement Mechanism: If a member believes another has violated WTO rules, it can initiate a dispute. The WTO’s Dispute Settlement Body (DSB) adjudicates the case.
- Retaliation: If a country is found to be in violation and fails to comply, the DSB can authorize other members to impose retaliatory tariffs or trade restrictions.
- Trade Policy Review Mechanism (TPRM): Regular reviews ensure compliance with WTO agreements.
However, the enforcement isn’t automatic. It relies on the willingness of member states to abide by the rulings and the collective pressure exerted through the DSB.
India’s Stand on Food Security and the Latest Round of Talks
India’s primary concern in the WTO negotiations revolves around public stockholding for food security. The Peace Clause, initially agreed upon in the Bali Ministerial Conference (2013), provides temporary protection to developing countries against challenges to their food subsidy programs that exceed permissible limits (as per the Agreement on Agriculture - AoA). However, this clause has been subject to periodic renewals and conditions.
India argues that its food subsidies are necessary to address widespread poverty and hunger, and to provide affordable food to its large population. The existing AoA formula, based on 1986-88 production levels, is considered outdated and unfairly disadvantages developing countries like India, whose agricultural production has significantly increased since then. India has been pushing for a permanent solution to the public stockholding issue, seeking a revised formula that reflects current production realities.
Critical Analysis: India’s stance is largely justified given its socio-economic context. However, its hardline position has sometimes stalled progress in other areas of the negotiations. Developed countries, particularly the US and EU, have concerns about the potential distortion of global markets due to India’s subsidies. A compromise is needed that balances India’s food security needs with the principles of fair trade. The recent agreement at the MC13 (February 2024) to extend the Peace Clause until 2034 is a step forward, but a permanent solution remains elusive. India’s insistence on a permanent solution is crucial to ensure long-term food security for its citizens and prevent future trade disputes.
| Issue | India’s Position | Developed Countries’ Concerns |
|---|---|---|
| Public Stockholding | Permanent solution; revised subsidy calculation based on current production | Market distortion; unfair competition |
| Special and Differential Treatment (S&DT) | Greater flexibility for developing countries | Level playing field; reciprocal concessions |
Conclusion
The WTO remains a vital institution for regulating global trade, but its effectiveness hinges on the willingness of member states to compromise and address the concerns of all. India’s stand on food security, while rooted in legitimate concerns, needs to be strategically balanced with a constructive approach to broader trade negotiations. The extension of the Peace Clause is a positive development, but a permanent solution is essential for ensuring long-term food security and fostering a more equitable global trading system. Future negotiations must prioritize the needs of developing countries and acknowledge the evolving realities of global agriculture.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.