Responsible Consensus at the WTO Can Save the Global Trading System

The international trading system is gearing up for another test of its resilience. In late February, trade ministers will meet in Abu Dhabi for the thirteenth ministerial conference (MC13) of the World Trade Organization (WTO) in hopes of concluding several ongoing trade negotiations and laying the groundwork for institutional reform. The list of agenda items is vast—WTO reform, a waiver for COVID-19 therapeutics and diagnostics, e-commerce, fisheries subsidies, agriculture, and investment for development—and consensus among WTO members remains far off.

That some WTO members have vehemently opposed the increasingly popular concept of plurilateralism is of particular concern. Plurilateral negotiations are open to all parties, but in practice are carried out by only those members who are particularly interested in the issue at hand. These negotiations have become the most pragmatic method of reaching agreement on new rules in an organization such as the WTO, which has grown far beyond its initial capacity. But some countries, such as India, have strongly objected to any discussions that do not involve the entire 164-country WTO membership. Their objections are directly undermining efforts by the United States to make the WTO “more relevant to today’s challenges,” and potentially scuttling efforts to update international trade rules to address modern concerns. If the United States is as committed to the WTO as it claims to be, then it needs to convince those recalcitrant members to drop their obstructionist approach. India particularly is a heavyweight player in the WTO, and it should also, on its own, take the opportunity to chart a new course and productively engage in trade discussions where it has otherwise been absent.

The Plurilateral Drama and Investment Facilitation

Before the WTO went on holiday break in December 2023, India made a statement during a meeting of the General Council (which includes all members) to highlight what it thought were “sensitivities” surrounding new negotiations. In particular, India called out talks on investment facilitation for development (IFD), which substantially wrapped up last summer, saying that discussion of the topic “does not belong” at the WTO because there “has not been any Ministerial mandate for starting negotiations.” India’s objections stemmed not only from the fact that something related to investment was being discussed at the WTO, but also that a group of members decided to advance discussions on a shared issue of interest without agreement from all 164 member countries.

Over the last few years, India has been joined by South Africa and Namibia in arguing that  plurilateral discussions are fundamentally at odds “with the multilateral underpinnings of the WTO.” Furthermore, India has even advanced the notion  that plurilaterals undercut the WTO’s uniqueness in “[providing] rights to every individual member to have a say in deciding the negotiating agenda.”

What these countries seem to miss is that plurilateralism offers important benefits. First, the WTO has struggled to negotiate significant multilateral rules since its inception, and the growth in its membership has made such negotiations even more unwieldy. Plurilateral groupings bring together the countries most interested in a particular question, increasing the likelihood, as research has shown, of long-term compliance. An insistence on universal consensus, on the other hand, threatens to bring the WTO to a standstill.

Second, since plurilateral deals have already been accepted into the WTO framework in the past, their existence is not antithetical to the WTO’s purpose, nor do they undermine how the organization functions.

Third, the complaint that objecting members such as India have put forward—that plurilaterals are a tool of developed countries to advance rules in spaces where developing countries have not yet built the capacity to participate fairly—is problematic. To begin with, plurilateral negotiations can be inclusive, as the IFD talks show. All WTO members were welcome to join the talks but not all did. Instead, 110 members participated, making up 67 percent of the organization’s membership. Furthermore, the talks were largely driven by developing states to serve their own interests—improving sustainable, high-quality investment in their countries. The talks did not even include the biggest player, the United States, which chose not to join, though it supported the important effort. As WTO Director-General Ngozi Ikonjo-Iweala stated, by “enhancing transparency, accountability and good governance in investment procedures, the Agreement fosters a business climate more conducive to sustainable development.”

India’s Contradictory Positions on IFD

While South Africa and Namibia have joined India in opposing plurilateral talks, India’s objections have been uniquely baffling and significant.

India claims to champion the Global South. Yet by opposing the developing country-led IFD talks, it is revealing the limits of its leadership. Moreover, India has publicly stated its desire for increasing foreign investment, so it is puzzling that it chooses to oppose these discussions, with some estimates suggesting that the deal could generate global welfare gains between $250 billion and $1,120 billion, primarily benefitting poorer countries.

Such apparent contradictions suggest that India is pushing a legacy strategy at the WTO and is yet to carve out a new approach to today’s challenges or Global South interests. At the last ministerial conference (MC12) in June 2022, for example, India held up discussions on fisheries subsidies—also of immense interest to most developing countries—until the eleventh hour. What finally emerged out of MC12 were watered-down provisions to rein in harmful fisheries subsidies, largely due to India’s insistence that developing countries be exempted from stringent rules. However, most developing countries were keenly interested in including those rules, not least because they could help contain Chinese encroachment into areas they rely on for fishing (notably, China was largely cooperative during negotiations and has already ratified the first agreement).

Ironically, at the end of the marathon negotiations, India’s minister for commerce and industry, Piyush Goyal, stated, “far from being initially projected as a ‘Deal Breaker’ by certain countries, India finally emerged as a ‘Deal Maker’ at the WTO talks.” Commentators were quick to point out that in fact the entire meeting was an exercise in the WTO simply “staying alive.” Haunted by the theatrics of the last ministerial, members have spent countless months preparing fastidiously to secure some deliverables this year.

The problem, however, is that India, a substantive player in the WTO, has not only the ability to prevent WTO deals from becoming law—any addition or amendment to the existing WTO rules requires all members to sign on—but also the clout and visibility. Consequently, its obstruction can lengthen this process, as well as attract more opposition.

What the United States Can Do

At an event in Washington, DC, U.S. Ambassador to the WTO María Pagán spoke about how the WTO could avoid gridlock through responsible consensus, which she described as “the ability to say yes to something that maybe I don’t care that much about, but it doesn’t hurt me. And I’m not gonna hold it back as a chip…until I get…what I want.” Important U.S. allies, such as the United Kingdom, similarly support “the spirit of collaboration and responsible consensus so as to ensure that MC 13 builds on the success of MC 12.”

The United States should embrace this principle if it wants plurilateral initiatives such as the IFD to succeed. This is why some experts have argued for provisional application of the IFD, which would make the agreement legally binding among the parties while they await the formal process for the treaty to enter into force. The idea behind this is that the benefits of the deal are too important to wait for implementation pending consensus from the entire WTO membership.

Likewise, for initiatives that hope to “green” the WTO to make headway, such as tackling plastics pollution, fossil fuel subsidies, and promoting trade in environmental goods and services, the plurilateral approach may be the only avenue to move discussions forward at a speed that meets the urgency of the challenge posed by climate change. The United States should actively push India to change its stance on plurilaterals so that these important issues can be addressed. Furthermore, it is in the interest of the United States to advance negotiations at the WTO to ensure that the organization is fit for purpose and reflects U.S. priorities.

Last week U.S. Trade Representative Katherine Tai went to New Delhi to discuss the U.S.-India trade agenda. In a readout of a meeting between Tai and Indian Minister of External Affairs Subrahmanyam Jaishankar, both “discussed their shared desire to work constructively together to ensure a successful 13th World Trade Organization Ministerial Conference.” A shared desire, however, may not be enough. Getting India to back down from its opposition to progress at the WTO should be at the top of the agenda—apart from anything else, it could persuade South Africa and Namibia to similarly reconsider.

This post was written for the Council on Foreign Relations’ Renewing America initiative—an effort established on the premise that for the United States to succeed, it must fortify the political, economic, and societal foundations fundamental to its national security and international influence. Renewing America evaluates nine critical domestic issues that shape the ability of the United States to navigate a demanding, competitive, and dangerous world. For more Renewing America resources, visit https://www.cfr.org/programs/renewing-america and follow the initiative on Twitter @RenewingAmerica.