Plurilateral initiatives by countries a way forward in the post WTO : Economist

By M Chenna Nagaraj

Dec 29, 2019

New Delhi: Plurilateral negotiations may prove to be pragmatic approach for global trade as the end of the WTO regime appears to be certain, a leading economist of Europe has opined.

Talking on “Global Spillovers, Multilateral Cooperation and WTO Reform”, Prof. Bernard Hoekman, Director, Global Economists at the Robert Schumann Centre for Advanced Studies in Florence said that the end of the WTO regime was evident as the leading countries including United States thinking in terms of ending budget support to the WTO, which had offered a global forum for multilateral negotiations.

At the global level, the element of tolerance had disappeared be it US, Europe, China or India and there was growing protectionism. The benevolent hegemonic behaviour had taken a path of resistance and there was a big problem of leadership which will not benefit world trade, he felt. They should engage in trade talks and should be capable of thinking big and bring out reforms. There is a window of opportunity to design and resolve the issues in a democratic way and put back the swords back into their quiver. The key strategy is to show that the multilateral negotiations are not averse to bilaterals.

If there is no negotiations, then the scene would end up in power play by the blocks like US Block, China Block and the European Block which was not good for a good trade.

He said multilateral initiatives under the WTO did not seem to have yielded results as the decisions are to be taken by consensus and the WTO was dogged by the ‘tyranny of consensus’ with the affected country creating a deadlock at every step. Since some country or the other is bound to be dissatisfied on any decision, too much of democracy at play, the very system of global trade seemed to be defeated, he. felt

Explaining his idea of plurilateral initiatives, Dr Hoekman said it would mean group of countries with common interests getting into talks with the countries having their common interests in mind. This would spur an era of ‘made in the world and made for the world’ providing the customers the best value for their money, instead of promoting industry lobbies within the country. The countries could effectively address the contentious issue like providing subsidy, tax system, investments in green technologies to address the issue of adverse impacts of climate change. Focus on technological diagnostics for achieving green economy is something that could be done and not happening in the WTO.

He said to begin with G-20 was one forum where the plurilateral initiatives could be at play. Alternatively United States, Europe and Japan who were all having issues with China’s on trade could do well to form a group and discuss issues collectively for a broader package with China and sort out the issues at the bilateral level offering Special and Differential Treatment, in a pragmatic manner.

On China as the second biggest economy after the United States, Dr Hoekman said China had exhibited good citizenry by being ‘law abiding’ in the WTO forum even when some decisions went against them.

Similarly India and other emerging economies could enter into groupings and hold negotiations with the group of countries whom they could trade. Such talks will yield results as there is an element of bilateralism with the countries as well as the interests of the countries as a group, thereby obviating the issue of individual countries throwing tantrums jeopardising the entire talks like it had happened in the case of WTO negotiations.

He said India is a major player in digital economy and e-commerce besides the services but was not in the talk table now as it was not inside the WTO. If you are not in the talk table, you can’t defend your country’s agenda and hence it would go against your interests, he felt.