The WTO moment: Why India must lead the reform agenda for a rules-based global order

The Economic Times, July 24, 2025

By Pradeep S Mehta

Much has been written about the decline of the normative authority of WTO over the past decade. But there is less discourse around WTO as a global public good and a bulwark of the rules-based MTS. The need of the hour is to cultivate a positive narrative around WTO’s centrality in the global trade architecture, to create a conducive environment for undertaking meaningful WTO reform.

Soon after attending the Rio BRICS summit earlier this month, Narendra Modi tweeted: ‘BRICS is an organisation capable of changing itself with the times. Now we need the same resolve for reforms in institutions like the UN Security Council, WTO and multilateral development banks.’ He was also sending a signal to the US that much has to be done in various fora to promote genuine multilateralism.

WTO DG Ngozi Okonjo-Iweala, who was also there at Rio, retweeted, ‘Looking forward to your political will and leadership to move things in Geneva to do the deep reforms that we need.’ Her couched worry was that New Delhi has not been on the boat for the reforms agenda, as India – along with the likes of Brazil, Indonesia, South Africa and the US – didn’t sign the statement in support of WTO’s role at the core of the rules-based multilateral trading system (MTS) in   May, which was supported by over 45 WTO members. This was disheartening for developing countries in WTO, considering India claims to be a ‘leader of global south’.

Much has been written about the decline of the normative authority of WTO over the past decade. But there is less discourse around WTO as a global public good and a bulwark of the rules-based MTS. The need of the hour is to cultivate a positive narrative around WTO’s centrality in the global trade architecture, to create a conducive environment for undertaking meaningful WTO reform. India, which is aiming to be a developed nation by 2047, has to rise above its prejudices and lend its support to WTO and willing countries, for its own benefit.

Some headline numbers are instructive. 70-80% of global merchandise trade still occurs on MFN, rather than preferential, terms. Predictability and stability underwritten by the Gatt/WTO system has raised world trade volumes by over 45x levels in the 1950s, stimulating economic growth and creating jobs, and benefiting both producers and consumers around the world.

India has been able lift nearly 500 mn people out of poverty since WTO came into being in 1995, and has now become the fourth-largest economy. As a founder member, it’s one among 166 members. WTO remains the only forum for countries across varying levels of economic development to have open discussions on trade policy.

Yet, in the popular imagination, WTO is being perceived as dysfunctional. Although significant work continues to be undertaken in various WTO committees that deal with the nuts and bolts of trade irritants between member countries, stalemate in the organisation’s negotiating function is certainly a cause of concern.

Added to that is the continuing impasse in its dispute settlement function. Combined with increasing divergence among WTO members on its foundational premises, and an onslaught of unilateralism and lack of trust between trading partners, advancing a WTO reform agenda is becoming increasingly challenging – and imperative.

WTO is in a crisis. However, there is also a sense that expecting any radical overhaul in the present circumstances would be a vain hope. While WTO members broadly agree about the need for institutional reform in general, any consensus, on what shape a reform package can take, which elements can be prioritised, and what could be the most pragmatic way of achieving them will be, remains elusive. For now, the way forward will be strategic continuity and incremental progress on WTO reform.

Towards this end, members, particularly India, may need to relook long- held positions and pursue single-issue coalition and alliance-building towards preserving systemic interests. There’s also a need for greater mobilisation among a range of both developed and developing country middle-powers, as well as LDCs, at WTO, to foster a pro-WTO narrative and cultivate an environment for undertaking meaningful reform.

Major developing countries like India need to rise to the occasion and actively pursue a coordinated agenda, much like it did in the successful Hong Kong ministerial conference in 2005. All these need to join forces and pursue an ‘agenda of the willing’ targeted to preserving and reforming WTO.

Benjamin Franklin’s line, ‘We must all hang together or we will all hang separately,’ underscores the imminent need for an effective WTO, rather than a spaghetti bowl of FTAs, where smaller countries can be bullied by more powerful partners.

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