With the WTO’s 12th Ministerial Conference (MC12) now postponed for the second time in two years, those hoping for ambitious outcomes across a variety of fronts will have to wait a little longer. However, most countries have long taken matters into their own hands when it comes to pursuing trade liberalization.
Indeed, for decades, countries around the world negotiated, concluded and implemented a variety of free trade pacts. Massive free trade deals including NAFTA, now renegotiated as the USMCA pact, the Comprehensive Progressive Trans-Pacific Partnership (CPTPP) which is 11 members strong and growing and the Canada-European Union Comprehensive Economic and Trade Agreement (CETA) have set the standard for what global trade should look like in the 21st century.
However, in recent years there’s been no true champion in the world for knocking down trade barriers in all their forms.
The WTO has tried to move beyond simply being the global trade referee by re-establishing itself at the heart of the international trading system. To be fair, it is helping advance many important 21st century trade issues including trade in services, fighting against subsidies and other trade-distorting measures and by urging its members not to implement protectionist measures related to the pandemic. Now under new leadership, the WTO shouldn’t yet be written off. But it isn’t the free trade champion it wants to be.
The U.S. has essentially left the field altogether. While protectionist America First policies may have originated under the Trump administration, they’ve been intensified under President Biden and protectionism is now the norm. The U.S. barely even pretends to support free trade anymore and has continued to let the WTO’s Appellate Body languish by not appointing new panel judges. It’s even imposing tariffs and proposing new trade restrictions on its North American free trade partners which harms its own interests.
Which brings us to India. A decade ago, India was looking to negotiate free trade pacts around the world and was beginning to play the global power role it is destined to play as the world’s largest democracy. However, the deals never came to be.
The pandemic seems to have convinced India to shift gears again as it is now trying to resume long-stalled talks with many of its major trading partners including the UK, the European Union, Australia, the United Arab Emirates, Russia, South Africa and Canada.
Dubbed “early harvest”, India is openly signaling it wants to vastly expand its free trade network across a variety of sectors including IT, pharma, agriculture, autos, textiles and an array of services. It hopes to boost its exports to $500-billion USD annually by embracing free trade.
While time will tell how successful the early harvest is, India stands out as one of the only global powers putting free trade at the heart of its economic recovery agenda.
Given the retreat of so many other former backers of free trade, that alone will be worth watching.