Aspirant Academy

Polity, Governance and Current Affairs

World Trade Organisation

Global Platforms: UN, WTO, EU, ASEAN, BRICS, G-20, QUAD, I2U2, AUKUS, DAKSHIN

Paper III · Unit 1 Section 3 of 13 0 PYQs 30 min
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World Trade Organisation

2.1 WTO Foundations

GATT (General Agreement on Tariffs and Trade) was a provisional framework signed in 1947 to reduce tariff barriers. After 8 rounds of negotiations, the Uruguay Round (1986–1994) created the WTO — signed in Marrakesh, Morocco, with the Marrakesh Agreement (15 April 1994). The WTO became operational on 1 January 1995.

Key facts:

  • Headquarters: Geneva, Switzerland
  • Members: 164 (China joined December 2001; Russia joined August 2012)
  • Current Director-General: Dr. Ngozi Okonjo-Iweala (Nigeria) — first woman and first African DG; appointed February 2021

Key principles:

  • Most Favoured Nation (MFN): Trade benefits given to one WTO member must be given to all
  • National Treatment: Imported goods must be treated same as domestic goods (once in market)
  • Transparency: Trade rules must be transparent and published
  • Reciprocity: Tariff reductions are negotiated on reciprocal basis
  • Special & Differential Treatment (S&DT): Developing countries get longer timeframes and flexibility

2.2 WTO's Dispute Settlement Mechanism

The Dispute Settlement Body (DSB) is WTO's quasi-judicial mechanism — often called the "crown jewel" of WTO. The process follows five steps:

  1. Consultations between parties
  2. Panel of experts established
  3. Panel report issued
  4. Appellate Body (AB) — final appeal
  5. Compliance and retaliation if ruling not followed

Crisis: Appellate Body paralysis. The Appellate Body has been non-functional since December 2019 — the US blocked appointments of new AB members (citing due process concerns), rendering the appeals mechanism paralysed. As a workaround, India and the EU created the MPIA (Multi-Party Interim Appeal Arbitration Arrangement).

2.3 India at WTO

India's Key Positions

  • Food security: India's MSP-based procurement of rice and wheat (Public Stockholding) has been challenged by developed countries as trade-distorting; India insists this is essential for food security
  • Special Safeguard Mechanism (SSM): India wants developing countries to be able to raise tariffs temporarily when import surges hit farmers
  • TRIPS and medicines: India opposes TRIPS provisions that restrict access to generic medicines — India supplies 60% of global vaccine demand
  • Services liberalisation: India wants Mode 4 (movement of natural persons — IT professionals abroad) liberalised in exchange for goods concessions

MC-13 (13th WTO Ministerial Conference, Abu Dhabi, February 2024)

  • E-commerce moratorium extended (no customs duties on electronic transmissions until next MC)
  • India opposed some fisheries subsidies outcomes
  • Dispute on food security public stockholding remained unresolved