Model Answer
0 min readIntroduction
The World Trade Organization (WTO), established in 1995, serves as the primary forum for negotiating and enforcing rules governing international trade. Its core objectives include reducing trade barriers, promoting fair competition, and fostering economic growth through trade. The Doha Development Round, launched in 2001 in Qatar, aimed to address the concerns of developing countries by focusing on issues like agricultural subsidies, special and differential treatment, and market access. However, despite years of negotiations, the Doha Round remains largely unresolved, largely due to fundamental disagreements between developed and developing nations, significantly impacting countries like India.
The Doha Round: A Recap
The Doha Round was envisioned as a ‘development round’, prioritizing the needs of developing countries. Key areas of negotiation included agriculture, non-agricultural market access (NAMA), services, trade-related aspects of intellectual property rights (TRIPS), and trade facilitation. The initial promise of a more equitable trading system has, however, remained unfulfilled.
Reasons for the Stalemate: Developed vs. Developing Countries
The primary reason for the Doha Round’s failure lies in the conflicting priorities of developed and developing countries:
- Agricultural Subsidies: Developed countries, particularly the US and EU, have been reluctant to significantly reduce their substantial agricultural subsidies, which distort global markets and disadvantage developing country farmers. India, with a large agrarian population, has consistently demanded greater reductions in these subsidies.
- Market Access: Developed countries sought greater market access in developing countries for their manufactured goods and services. However, developing countries were hesitant to open their markets fully, fearing damage to their nascent industries.
- Special and Differential Treatment (SDT): Developing countries demanded more flexible rules and longer implementation periods (SDT) to account for their economic vulnerabilities. Developed countries offered limited concessions in this regard.
- Singular Tariff Formula: The US pushed for a Swiss formula for tariff reductions, which would have required developing countries to make deeper cuts than they were willing to accept.
India’s Perspective and Concerns
India has been a vocal advocate for the Doha Round’s completion, but on terms that safeguard its interests:
- Food Security: India’s public stockholding program for food security, crucial for millions of its citizens, has been a major point of contention. Developed countries have challenged this program as trade-distorting. India has sought a ‘peace clause’ to protect its food security programs from legal challenges, but progress has been slow.
- Cotton Subsidies: India, as a major cotton producer, has demanded an end to the substantial cotton subsidies provided by the US, which depress global cotton prices and harm Indian farmers.
- TRIPS Flexibilities: India has emphasized the importance of TRIPS flexibilities, particularly in the pharmaceutical sector, to ensure access to affordable medicines.
- NAMA Negotiations: India has been cautious about reducing tariffs on manufactured goods, fearing that it could lead to increased competition from cheaper imports and harm domestic industries.
Implications of the Doha Round’s Failure for India
The stalled Doha Round has several implications for India:
- Limited Market Access: India’s access to developed country markets remains restricted due to existing trade barriers.
- Continued Agricultural Distortions: The persistence of agricultural subsidies in developed countries continues to disadvantage Indian farmers.
- Reduced Bargaining Power: The failure of the Doha Round weakens India’s bargaining power in future trade negotiations.
- Rise of Bilateral and Regional Trade Agreements: The impasse has led to a proliferation of bilateral and regional trade agreements (RTAs), which may not be as beneficial to India as a multilateral agreement like the Doha Round.
| Issue | Developed Country Stance | India’s Stance |
|---|---|---|
| Agricultural Subsidies | Reluctant to significantly reduce | Demand substantial reductions |
| Market Access | Seek greater access to developing country markets | Cautious about opening markets fully |
| Food Security | Challenge public stockholding programs | Seek ‘peace clause’ to protect programs |
Conclusion
The Doha Round’s failure represents a setback for multilateralism and a missed opportunity to create a more equitable global trading system. While the round is unlikely to be revived in its original form, the issues it sought to address remain relevant. India must continue to advocate for its interests in future trade negotiations, focusing on food security, agricultural subsidies, and TRIPS flexibilities. Simultaneously, it needs to proactively engage in bilateral and regional trade agreements while strengthening its domestic economy to enhance its competitiveness in the global market. A pragmatic approach balancing multilateral commitments with regional and bilateral engagements is crucial for India’s trade future.
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.