Three of the world’s leading financial institutions band together for international trade reforms
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- The World Trade Organisation (WTO), the
World Bank, and the International Monetary Fund(IMF) all came together to ask for urgent reforms in international trade.
- In a joint report, the institutions focused on modernising the WTO regulations to focus on the digital arena in order to ‘harness the unique strength’ of the organisation in changing times.
- The Director General of the WTO, has earlier stated that the current global trade tensions have the potential to undermine the economic order that was established after
World War II.
They expressed the importance of ‘harnessing the unique strength of the WTO’ by focusing on global e-commerce regulations, improved negotiating mechanisms, and increased transparency in trade policies around the world.
The report titled, ‘ Reinvigorating Trade and Inclusive Growth’ comes right after the president of the United States,
The question for India
Ordinarily, the WTO has seven judges in its Dispute Settlement Court, but currently, only four are in positions of appointment. Reports indicate that the US has been blocking more people from coming on board. If the number of judges gets any lower, the WTO won’t have enough people on the panel to deliver rulings.
It’s popular opinion is that the organisation is currently failing its role and being used as an instrument for retaliatory tariff wars.
The question for India is a little more complicated than just being protectionist or pro-globalisation because the WTO, though a global institution, has often been accused of being biased against developing nations.
Last year India even told the WTO that, “Such presentations by the secretariat within or outside the WTO go far beyond the remit of the functions of the WTO secretariat, and violate the letter and spirit of the agreement establishing the WTO,” when the organisation was seeking outcomes on e-commerce and investment facilitation initiatives.
Director General, Roberto Azevedo, had earlier warned world leaders that the current trade tensions have the potential to cause great harm to the world economy and it undermines the trading order that was established after World War II.
The ripple events will cause job loss and hit economic growth, with the under-developed and developing nations bearing the brunt.