Context

• World Trade Organisation (WTO) reform has been on the global agenda for a while including that of the G20, whose members are key players in the WTO.
• The recently concluded meeting of the G20 working group on trade and investment focused on the important issue of WTO reform. 

Need for WTO reform

• Today’s world is dominated by geoeconomic considerations and heightened securitisation of international economic relations which is contrary to the founding principles of WTO.
• The pursuit of unilateralism in international economic relations, especially by developed countries like the US, is on the rise.
• Economic policies such as industrial subsidies and local content requirements have made a comeback.
• There is a deliberate effort to weaken trade multilateralism in favor of external plurilateral alignments keeping the big power confrontation in mind. 

Focus areas of WTO reforms

Special and differential treatment (SDT) principle: 

• Given the varying levels of development of different WTO member countries, SDT provisions give special rights to developing countries and obligate developed countries to treat the former more favourably.
• However, only 21 per cent of the SDT provisions in various WTO agreements oblige developed countries to actually provide differential treatment to developing countries. 

Appellate body

• The second tier of the WTO’s two-tiered dispute settlement body remains paralyzed from 2019 because of the US which, in turn, allows it to pursue trade unilateralism without many checks. 

Consensus based decision making

• There has been a shift away from Consensus-based decision-making in the WTO toward plurilateral discussions on select issues such as investment facilitation. 
• Forcing plurilateral agreements on non-willing members will accentuate the trust deficit between developed and developing countries.

Transparency gap

• Although WTO member countries are obliged to notify all their laws and regulations that affect trade, compliance with this obligation is poor. This increases the cost of trade, especially for developing countries.

Way forward

• The push for WTO reforms must come from G20’s “middle powers” such as India, Indonesia, Brazil, and South Africa. 
• SDT provisions need to be given more teeth and efforts to weaken this treaty-embedded right in the name of WTO reform should be opposed.
• The G20 countries need to either persuade the US to change its position or resurrect the appellate body without the US.
• There is a need to develop a multilateral governance framework for plurilateral agreements. This governance framework should include key principles of non-discrimination, transparency, and inclusivity in incorporating the results of plurilateral negotiations in the WTO rulebook. 
• It is imperative to address the transparency gap in the WTO, especially in terms of notification requirements. 

Conclusion

• Trade multilateralism might be out of fashion, but remains of vital salience for countries like India. 
• Hence, India, under its Presidency of the G20, should work with others to drive the WTO reforms agenda aimed at making trade multilateralism inclusive.