UPSC Essentials brings to you its initiative for the practice of Mains answer writing. It covers essential topics of static and dynamic parts of the UPSC Civil Services syllabus covered under various GS papers. This answer-writing practice is designed to help you as a value addition to your UPSC CSE Mains. Attempt today’s answer writing on questions related to topics of GS-2 to check your progress.

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What are the major areas of contention between developed and developing nations in WTO negotiations?

Evaluate the role of trade policy in shaping India’s relations with its neighbours.

👁 UPSC Essentials Mains Answer Practice — GS 2 (Week 131)

QUESTION 1: What are the major areas of contention between developed and developing nations in WTO negotiations?

Relevance: The topic highlights ongoing challenges in the global trade order, especially disputes in the World Trade Organisation. It also reflects contemporary issues like protectionism, regional integration, and supply chain shifts, which can be asked in mains. It links to issues like subsidies, S&DT, and reform of multilateral institutions.

Note: This is not a model UPSC answer. It only provides you with a thought process which you may incorporate into the answers.

Introduction:

— The Director-General of the World Trade Organisation (WTO), Ngozi Okonjo-Iweala, kick-started the 14th Ministerial Conference (MC14) in Cameroon with a warning, stating that the world trading system is experiencing the “worst disruptions” in 80 years.

— The developed and developing countries have arrived at MC14 with starkly different visions for the multilateral body facing a crisis of confidence, at a time when trade tensions are already running high.

Body:

You may incorporate some of the following points in your answer:

Major areas of contention between developed and developing nations in WTO negotiations

Multilateralism vs Plurilateralism

— One of the sharpest divisions between members is on how future agreements should be reached. Since its inception, the WTO has operated primarily on a consensus-based decision-making model, where all 166 members must agree on decisions. However, several developed nations are seeking plurilateral agreements, where members can sign agreements among themselves without including all countries, arguing that progress is slow in the consensus-based method.

— Developing countries such as India, Indonesia, Vietnam, and Namibia have insisted that the WTO must remain a “member-driven” and “consensus-based” organisation. India said that the incorporation of plurilateral outcomes into the WTO framework should not impair existing rights of non-parties or cast additional obligations on them. Namibia also argued that for small economies, multilateral rules are an “economic necessity”. However, the US, European Union and the UK have advocated for a “more flexible framework” that allows like-minded partners to move forward with closer cooperation when a full consensus cannot be reached.

Conflict over Special and Differential Treatment

— It is a provision in the WTO agreement that gives developing countries more time or flexibility to implement rules, such as phasing out certain subsidies.

— Developed countries have pushed for a relook at S&DT, but developing nations consider it the bedrock of multilateralism. Developing nations such as India and Namibia have maintained that S&DT is a “treaty-based right” and must be “precise, effective and operational” to enable their meaningful participation in global trade. S&DT must be safeguarded as a treaty-based right and as an enabler for developing Members to participate meaningfully in and fully benefit from the multilateral trading system.

Agriculture and e-commerce

— Consensus at the WTO on key issues has also been elusive because countries, based on their respective growth stages, are making agriculture or digital trade key priorities. While developing nations, such as India and other African countries, have raised a strong demand for food subsidies, rich countries have focused on e-commerce.

— The US, UK, and Singapore have for years prioritised the digital economy and have been pushing to make the moratorium on customs duties on electronic transmissions (products like software) permanent to provide “certainty” for businesses. India, however, has focused on keeping this policy space intact and argued that the issue warrants “careful reconsideration” because its long-term implications for developing states are not fully understood.

Conclusion:

— However, the division is not limited to the most powerful countries. Developed, developing and Least Developed Countries (LDCs) have pitched divergent ideas on core issues such as plurilateral deals, agriculture, e-commerce moratorium, as well as dispute settlement, indicating why effective outcomes from WTO ministerials have been few and far between in recent years.

(Source: From farm to software, how fresh WTO talks expose deep faultlines between rich and developing nations)

Points to Ponder

How is rising protectionism reshaping global trade and supply chains?

What reforms are needed to strengthen WTO’s dispute resolution and negotiation mechanisms?

Related Previous Year Question

What are the key areas of reform if the WTO has to survive in the present context of ‘Trade War’, especially keeping in mind the interest of India? (2018)

QUESTION 2: Evaluate the role of trade policy in shaping India’s relations with its neighbours.

Relevance: The topic is directly related to India’s neighbourhood policy and regional diplomacy. Aspirants must focus on India’s negotiating stance in global and regional forums. It is also useful for analysing challenges in South Asian integration and bilateral ties.

Note: This is not a model UPSC answer. It only provides you with a thought process which you may incorporate into the answers.

Introduction:

— India, with its huge and growing market, technology and entrepreneurial resources, has the potential to play a significant role in accelerating industrial and economic growth in surrounding countries, particularly Nepal, Bhutan, Bangladesh, Myanmar, Sri Lanka, and the Maldives.

— Over the last five decades, India has contributed to the development of adjacent nations through various assistance initiatives, such as the ITEC programme, the plan of support to neighbouring countries, grants, technical assistance, and trade preferences, among others.

Body:

You may incorporate some of the following points in your answer:

— Bangladesh: The elections in February handed Tarique Rahman and the Bangladesh Nationalist Party a massive mandate. Over the last decade, Bangladesh has emerged as India’s most important neighbourhood partner. The deep economic interdependence built over this period appears to have survived the political toxicity of the last 20 months, but the relationship now needs fresh political impetus.

— Nepal: The sweeping victory of the Rastriya Swatantra Party and the rise of Balendra Shah mark a generational political shift. India must shed the rhetoric of a “special relationship” in favour of one grounded in equality and genuine respect for Nepal’s sovereignty.

— Sri Lanka: It has been moving toward pragmatic engagement with Delhi and breaking free from the historical political animosity that long coloured the ruling party’s relationship with India.

— Over the past two years, India has demonstrated a new willingness to negotiate ambitious trade agreements — with the United Kingdom, the European Union, the United States, and others — shedding many past shibboleths of trade policy. That same reforming instinct must now be extended to the neighbourhood.

— For decades, India’s regional trade policy has been hobbled by self-defeating protectionism. Despite the 4,000-kilometre border with Bangladesh and a narrow Palk Strait separating peninsular India from Sri Lanka, the West remains the main destination for their exports while China is the dominant source of imports. India remains Nepal’s largest trading partner — but barely.

— India objects to its massive trade deficit with China yet runs substantial surpluses with Bangladesh, Nepal, and Sri Lanka. India finds it difficult to offer its neighbours the very market access it demands from Beijing. A genuine transformation of connectivity between India, Bangladesh, and Nepal would provide a major boost to South Asia’s poorest parts in the eastern Subcontinent. This transformation will require both unilateral steps by Delhi and negotiated give-and-take.

Conclusion:

— The rapidly changing international context makes early action on neighbourhood trade urgent. This global uncertainty creates a new regional logic. For Bangladesh, Nepal, and Sri Lanka, the Indian market offers scale and proximity that no distant partner can match.

— Turbulence in the Gulf is beginning to have a deleterious impact across South Asia. As the Subcontinent’s deep energy, economic, and diasporic ties with the Gulf come under stress, India has begun supporting its neighbours with the supply of essential hydrocarbon commodities.

(Source: India must reboot neighbourhood policy — trade is the key)

Points to Ponder

What are the key barriers to deeper regional trade integration in South Asia?

Related Previous Year Questions

‘China is using its economic relations and positive trade surplus as tools to develop potential military power status in Asia’. In the light of this statement, discuss its impact on India as her neighbour. (2017)

Project ‘Mausam’ is considered a unique foreign policy initiative of Indian Government to improve relationship with its neighbours. Does the project have a strategic dimension? Discuss. (2015)

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