Western nations’ refusal to engage with Russia at the World Trade Organization (WTO), because of its war against Ukraine, is bound to cast a troubling shadow over the much-postponed 12th ministerial conference from June 12. This highest decision-making body will seek to address the challenges of making a rules–based multilateral trading system more relevant in a world where bilateral, regional, and mega regional trade agreements have proliferated. The Russian invasion is the biggest setback to restore rules-based trade as Western nations have weaponised global economic linkages through a growing list of sanctions to impact Russia’s trade and financial transactions with the rest of the world. Western nations walked out of a G-20 meeting when the Russian delegation was preparing to speak. The Ukraine conflict dominated the spring meetings of IMF and World Bank. The US and G-7 grouping of rich nations have already announced they are revoking Russia’s “most favoured nation” status. If the effort to isolate Russia—which accounts for 2.7% of the global economy—gathers traction, it is unlikely that the WTO ministerial will yield the desired outcomes as its functioning is increasingly hobbled.
All of this is would be a massive setback to developing nations, including India, as critical issues that affect them hang in the balance at the WTO. These include reforms on special and differentiated treatment (S&DT) of developing countries, public procurement programmes for food security, ending fisheries subsidies, among others. India is concerned that developed nations are pushing proposals on WTO reforms that dilute provisions on S&DT for developing countries, besides trade and environment linkages, dispute monitoring, inclusion of plurilaterals or agreements between a few like-minded members to negotiate over particular issues and ending the system of consensus for every decision that must be made. S&DT allows developing and poor (less developed) countries to enjoy certain benefits, including taking longer time periods for implementing agreements and binding commitments, and measures to increase trading opportunities for them. The only silver lining in this dismal scenario is that a provisional deal for a temporary trade-related intellectual property rights waiver has recently been struck in Geneva between the US, the EU, India and South Africa. Although this is a diluted version of India and South Africa’s original proposal, the waiver, if approved by WTO members, could help address the shortfall in production and availability of vaccines for the Global South.
India must take a leadership role at the forthcoming WTO ministerial to ensure that the agenda in which developing countries have major stakes is not derailed by the refusal of Western nations to deal with Russia. Negotiations on fisheries, agriculture as well as e-commerce and investment facilitation have already been impacted as a consequence, according to Reuters. India must work to bridge differences as it is increasingly aligned with that of the West, but it also has a strategic, long-standing relationship with Russia. It is in the best position to do so as its trade represents a significant share of GDP and is dependent on both these rival blocs. India thus is in the best position to follow a “non-disruptive geo-economic policy that seeks to maintain the current global economic equilibrium” according to former prime minister Manmohan Singh in an article in The Hindu. India must seize the opportunity to also make constructive suggestions on much-needed WTO reform as it has vital interests in a rules-based multilateral trading order while firmly standing up for developing nations at the ministerial.
