Wednesday, February 18, 2015

Plurilateral arrangements & WTO

Enclavisation of International Trade (TPP/TTIP/RCEPs) posing much greater threat to WTO as the emphasis has moved away from Tariffs. How far can Multilateralism and thus WTO stay relevant when such Plurilateral arrangements loom large over WTO's future?
very good qn...with one small correction the focus has moved away from tariff is not entirely true...anyways lets take the larger argument which will answer this qn as well
are regional trade agreements threat to wto?...arent they violating the fundamental principle of national treatment and equal treatment...and prevent evolution of a single global market?
this was the traditional understanding about regional trade agreements...it gives advantage to a select few countries over others and hence negates the basic tenet of WTO....they r seen as a threat to WTO because the countries gain what they could gain from WTO through these arrangements itself and have much less to give back or lose in regional agreements than in WTO...This wud curtail the incemtives they have to join WTO or to negotiate to execute it ...for these reasons regional agreements r seen as anti WTO
Arguments r thr which state these regional trade agreements are stepping stones to reach a global market. reasons are:
1.       a country which is insulated gets used to opening its market...in the domestic economy they get used to outside competition and it kind of sets the ground... ie..basically the principle of open competition gets acceptance...with WTO it wud be anybody and with RTAs it wud be selct few countries...thats all..its the scale which varies but principle is same
2.       its easy to settle discrepancies at regional level than at global level...because u can focus....its like attending one issue at a time...trouble shoooting them so that when the flood gates are opened u have already handled most of the probable issues....for eg...INDIA ASEAN trade agreement...INdia gained in terms of services but indian rubber exporters were affected and they opposed...INdian govt was able to handle it as they cud focus on the issue...also negotiating with a smaller group for specific issues like this is easy....give and take is easier...
3.       morover these agreements are eveolving between countries which have real trade....say whats the possibilty of srilanka trading with peru or something like that...when u say WTO u r trying to solve all issues at a time...it has to be accpetable to all....but these regional agreements r between countries which r already involved in real trade....right?...so it is argued that RTAs r stepping stones to WTO...or say WTO getting executed in phases
again these r view points from both sides of the debate....but steeping stone argument has gained more currency of late...

Sir didnt understd difference between multilateralism and pluralist arrangements? Are they same?
In this context Multilateral means universal ie includes everyone...plurilateral means its again a group of many but not all...WTO is multilateral...ASEAN is plurilateral...
there is this book by john baylis and steve smith "the globalization of world politics"...a must read for political science and IR students...for others go to a library get the book and photocopy select chapters...they have a brilliant chapter on WTO and RTAs....and few more which r very relevant for all....i think its avail as pdf too

Can we conclude regional trade can be dettrimental to wto,, bcoz mostly its worked on consensus basis

There r arguments on both the sides...u can list them and state whats going on...in these qns thr is no need to tell categorically whats right or wrong...nothing is...thats the fact of life :)....

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