The World Trade Organization is facing an existential crisis

  • GS 2: Important international Institutions

Context: The World Trade Organization (WTO) — the global trade body — is facing a serious existential crisis. The upcoming WTO ministerial meeting scheduled for next month in Geneva provides an opportunity to rescue this critical global institution from irrelevance.

About WTO:

  • It is an organisation aiming to bind world trade into one single grand trade agreement which aims at formation of rules relating various aspects of trade: Goods, Services, IPR etc.
  • The Marrakesh Agreement(1994) officially established WTO regime in 1995. during the heyday of neoliberalism, the WTO became a shining example of triumphant free-market capitalism.
  • It is a successor to General Agreement on Trade and Tariff(GATT)
  1. WTO is a permanent organisation unlike GATT. It provides a continuing institutional mechanism which was lacking during operation of GATT.
  2. WTO was required because world trade was growing very fast; an agency was needed to monitor, regulate and supervise the international trade. GATT was unable to deal with structural deficit.

Challenges with WTO

  • Critics of neoliberalism chastised the WTO for pushing the American imperialist agenda.
  • Protectionism: Paradoxically, more than two-and-a-half decades later, the United States seems to have lost interest in it. American view is that by failing to stem China’s rise and regularly indicting the U.S. in several trade disputes, it hasn’t served American interests.
  • Vacancies: For example in the Appellate Body (AB), which is part of the WTO’s dispute settlement mechanism. Since December 2019, the AB has stopped functioning due to rising vacancies. Over the years, the U.S. has consistently blocked the appointment of AB members.
  • Primary motive of resolving trade disputes now abandoned: The U.S. also vetoes proposals to find solutions to this impasse, including stalling the proposal of the European Union to establish an alternative interim appellate arbitration mechanism. The number of pending appeals to the AB has increased sharply to around 20 cases. Countries now have an easy option not to comply with the WTO panel decisions by appealing into the void.

The Four existential Challenges:

  1. No solution to the public stockholding for food security purposes: This is of paramount concern for countries like India that use Minimum Support Price (MSP)-backed mechanisms to procure foodgrains. The WTO rules allow countries to procure, stock and distribute food. However, if such procurement is done at an market distorting price such as the MSP, then the budgetary support is subject to an overall cap.  The 2015 Nairobi ministerial meeting made a clear mandate in this regard, however developed countries are not ready to follow it up.
  2. Disagreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement waiver COVID-19 related medical products. In 2020, India and South Africa proposed a TRIPS waiver to overcome intellectual property (IP)-related obstacles in increasing accessibility of COVID-19 medical products, including vaccines. The WTO needs to adopt a waiver in the upcoming ministerial meeting.
  1. Regulating irrational subsidies provided for fishing that has led to the overexploitation of marine resources by countries like China, which is the largest catcher and exporter of fish. However, this agreement should strike a balance between conserving ocean resources and the livelihood concerns of millions of marginal fishermen. An effective special and differential treatment (S&DT)provision that accords adequate policy space is what India and other developing countries should insist on.
  2. Emergence of mega plurilateral trade agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) — a treaty between 11 countries. Another key trade treaty is the Regional Comprehensive Economic Partnership (RCEP) agreement between Asian economies and countries down under. These plurilateral agreements not only fragment the global governance on international trade but also push the multilateral order to the margin, converting the WTO to what some call an “institutional zombie”.

Conclusion: Prime Minister Narendra Modi, during his recent U.S. visit, rightly pleaded for a rule-based global order. Institutional multilateralism would be the ideal antidote to unilateralism and economic nationalism. Notwithstanding its flaws, the WTO is the only forum where developing countries like India, not party to any mega plurilateral trade agreements, can push for evolving an inclusive global trading order that responds to the systemic imbalances of extant globalisation. What is at stake is the future of trade multilateralism and not just an institution.

Designing the post-COVID city

GS1: Issues related to Urbanization


  • The authors talk about the need for a well thought Urbanization policy for India

Editorial Insights:

What’s the matter?

  • As per the UN projections, Indian cities are projected to house 870 million people by 2050.
    • Cities like Delhi are likely to become the world’s most populous urban agglomeration by 2030.
  • As the world is transforming at a faster pace, India needs a robust & well-thought urbanization policy.

What is Urbanization?

  • Urbanization refers to the mass movement of populations from rural to urban settings and the consequent physical changes to urban settings.
  • It can also be termed as a progressive increase in the number of people living in towns and cities.
  • In 2019, the United Nations estimated that more than half the world’s population (4.2 billion people) now live in an urban area and by 2041, this figure will increase to 6 billion people,
  • Accordingly, urbanization is very common in developing and developed worlds as more and more people have the tendency of moving closer to towns and cities to acquire “privileged” social and economic services as well as benefits. These include social and economic advantages such as better education, health care, sanitation, housing, business opportunities, and transportation.

Issues associated with urbanization in India:

  • Urban sprawl or real expansion of the cities, both in terms of population and geographical area, has encroached upon the agricultural and forest lands.
  • Overcrowding and haphazard development of urban areas which has led to annually recurring instances of floods, diseases, and fire in many cities.
  • Rising demands for basic services such as clean water, public transportation, sewage treatment, and housing.
  • The proliferation of slums due to policy, planning, and regulatory deficiencies.
  • Huge quantities of garbage are generated by the cities which are posing a serious health problem.
  • Environmental concerns such as urban areas becoming heat islands, rising air pollution, groundwater pollution, and persistent water crisis.
  • Rising urban poverty, inequality, and unemployment.
  • Urban Crimes such as human trafficking, sexual assault, child labor, etc.

Need for robust Urbanization policy:

  • As India urbanizes, its cities must ensure a decent quality of life & facilitate job creation.
  • As urbanization is transforming societies, the future cities become the economic growth drivers.
  • The vibrant Urbanization policy & its benefits are fundamental to India’s ambitions of becoming a $ 5 trillion economy by 2025 & a $ 10 trillion economy by 2030.

The Elements/Pillars of a well thought Urbanization policy:

  • There is a need for a proper balance between agglomeration economies & manageability as well as density & distance in determining the right size for future Indian cities.
    • A kind of decentralized urbanization where multiple cities are clustered into growth regions that would facilitate manageable agglomeration economies.
  • There is need for tapping resources other than the public budget.
    • Govt should monetize the land assets & use the private sector for more efficient delivery services.
    • Well-balanced capital market resources should be encouraged to aid the govt efforts for making robust & affordable cities.
  • Indian future Urban cities need to be inclusive, sustainable & safe.
    • Therefore India must focus on urban planning rather than prioritizing construction.
  • Indian planning should encompass regional linkages which bind the economic linkages between cities & the rural hinterland strongly.
  • India with just 2.5% of the world’s landmass but 18% of the world population needs to have sustainable cities & living.
    • There is an urgent need to make resource efficiency an integral part of urban planning.
  • The major worrisome across the globe is climate change & its adverse consequences.
    • As the future cities are the large shareholders of the caron emissions.
      • It becomes imperative for India to guide its nascent cities into a low-carbon growth path.
      • There is a need to build resilience to mitigate the negative impacts of climate change.
  • As the world is rapidly transforming due to technological revolutions, the work culture over the years has been transformed very greatly which impacted mobility patterns.
    •  In this regard, the urbanization policy should take cognizance of future mobility patterns.
    • At same time, as the demand for & need of short distances is growing.
      • There is urgent to focus majorly on non-motorized transport infrastructure rather than high-speed systems.

Positive effects of Good Urbanization:

Urbanization yields several positive effects if it happens within the appropriate limits. Some of the positive implications of urbanization, therefore, include:

  • The creation of employment opportunities,
  • Technological and infrastructural advancements,
  • Improved transportation and communication,
  • Quality educational and medical facilities, and
  • Improved standards of living.

Concluding Remarks:

The need of the hour is a well thought, robust & vibrant urbanization policy to guide the planning & management of cities towards accommodating & enabling India’s growth ambitions while ensuring inclusive, sustainable & good quality of life.




No comments yet. Why don’t you start the discussion?

Leave a Reply

Your email address will not be published. Required fields are marked *