The Post-Bali Debacle and India's Strategy at the WTO: A Legal and Policy Perspective

Abstract

India has been perceived now as a villain that stalled the entry into force of the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) and the associated “Bali package”, a deal which was hailed as a landmark in the history of the WTO by none other than the former Union Minister of Commerce and Industry of India. The mood changed with the drastic reversal of the negotiating position post-Bali by India’s new government at New Delhi. India’s last minute pull out surprised and concerned most, and has been viewed with apprehension both in terms of the future of the WTO multilateralism, as well as, from India’s own trade interest. India’s standpoint is firmed by its genuine concern over food security and convinced by the fact that the developed countries may have less incentive for addressing food security once the TFA becomes binding.

In the midst of allegations and criticisms against India, this paper does a reality check on the cause and consequence of India’s negotiating position and its implication on India’s domestic and international interests. Can India be justified in blocking the post-Bali consensus by invoking its food security concerns, derailing the Bali Package deal in the process? Or is this the result of a lack of consistent trade policy and national standpoint? Can India defend and survive the onslaught of community of nations? Indeed, the current government has espoused a different and strong negotiating position than those accepted by the earlier government which was in power while the ‘Bali package’ was negotiated. This paper attempts to throw some light, both from a legal and a political economy perspective, on the different dimensions of the India’s negotiating standpoint. The paper argues that despite the potential legal and political consequence, India might overcome the hurdle unscathed. At the same time, the paper notes that the current fiasco and precarious position of India in the world stage, is the result of an incoherent policy formulation and negotiating strategy that engulf Indian decision making apparatus.

Keywords: WTO Bali package, India and the WTO, Subsidies, minimum support price, Trade Facilitation Agreement

JEL Classification: K33, N40