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U.S. Proposes Overhaul of WTO's Core Principles
The United States has circulated a paper proposing significant changes to fundamental World Trade Organization (WTO) principles. The document, released just before the 14th WTO Ministerial Conference, challenges core tenets like non-discrimination under the Most Favored Nation (MFN) rule. It also questions the existing special treatment for developing countries (S&DT) and the consensus-based decision-making that underpins the multilateral system.
The U.S. submission suggests a re-evaluation of the MFN principle, proposing a discussion on its link with reciprocity. This move could grant the U.S. more freedom to discriminate among trading partners. Additionally, the paper calls for clearer, objective criteria to determine eligibility for S&DT. This aims to ensure the provisions serve their intended purpose by scrutinizing the self-designation of developing country status, particularly by larger economies, although no specific nations are named. Experts believe this aims to legitimize discriminatory trade practices.
India Opposes Plurilateralism, Warns of WTO Harm
The U.S. paper also advocates for integrating plurilateral agreements—deals among a subset of WTO members—into the organization's structure. This approach faces strong opposition from India and other developing nations. They argue that incorporating plurilateral deals into the formal WTO framework without universal consensus risks undermining foundational principles and could lead to ad-hoc decision-making.
Trade expert Biswajit Dhar warned that the U.S. proposal could institutionalize policies that have weakened the WTO's rules-based system. "Taking away MFN and linking it with reciprocity will give the U.S. the freedom to discriminate against countries," Dhar stated. He added that pushing for plurilaterals could introduce "chaos, as a group of countries can stand up anytime and start negotiations on any issue without consent of others."
India has consistently opposed such plurilateral initiatives on procedural grounds, emphasizing adherence to established rules. New Delhi has stated that reforms should not involve "bending WTO rules" or changing the organization's character indirectly. Such actions, India believes, could damage the WTO beyond repair and erode confidence in its foundations. These ongoing discussions are setting a contentious tone for the upcoming Ministerial Conference, where the future of global trade governance will be a key focus.