GS-3 (Mains), Mains-2018 (English)

Future of Trade Multilateralism – WTO’s relevance & Issues associated


Trade Multilateralism can be defined as the progress of world trade in goods and services at a scale covering and connecting multiple economies. It stands for a regime of open and trade with very few restrictions.

The consensus based approach of the multilateral trade agreements seeks to provide equal footing to every nation despite its size and strengths. The doctrine of reciprocity as one of the main principle of such agreements seeks to balance and the advantages and harms for all in an equitable manner.

The WTO has been established with the mandate of trade multilateralism and in ensuring the benefits of trade worldwide.


Pros of Trade Multilateralism:

-> Multilateral agreements make all signatories treat each other the same. That means no country can give better trade deals to one country than it does to another. That levels the playing field. It’s especially critical for emerging market countries.

-> It increases trade for every participant. Their companies enjoy low tariffs. That makes their exports cheaper.

-> It standardizes commerce regulations for all the trade partners. Companies save legal costs since they follow the same rules for each country.

-> Countries can negotiate trade deals with more than one country at a time. Trade agreements undergo a detailed approval process.

-> Bilateral trade agreements tend to favor the country with the best economy. That puts the weaker nation at a disadvantage.


Cons of Trade Multilateralism:

-> Multilateral agreements are complex. That makes them difficult and time-consuming to negotiate.

-> The details of the negotiations are particular to trade and business practices. That means the public often misunderstands them. As a result, they receive lots of press, controversy and protests.

-> Some companies and regions of the country suffer when trade borders disappear. Smaller businesses can’t compete with giant multi-nationals.


Issues / Concerns:

-> Rising Protectionism Developed nations like US and UK moving towards a more protectionist regime to protect their trade.

-> Infallibility of dispute resolution bodies Like the DSB in WTO resulting in delayed or no resolving of pressing issues between different nations.

-> Rising developing nations Like China for manufacturing and Vietnam for textiles, which silently crushes developed nations aspirations in those particular field.

-> Rising bilateral and regional forumsGiving strong competition to multilateral forums.

-> Withdrawal of financial and administrative support to multilateral bodies by developed nations.

-> Different priorities Between economic interests of developing nations like India and developed nations like USA resulting in conflicts on matters like IP, Environment regulations. Principle of Reciprocity is being destroyed due to these differences.

-> Developed countries only use these multilateral organization for pushing only cherry picked issues of their benefits and obstructing concerns of others.



Multilateralism is true form of international governance and its central principle to oppose bilateral discriminatory arrangements that are believed to enhance the leverage of the powerful over the weak and to increase international conflict. It discourage unilateralism and gives the small powers a voice and voting opportunities that they would not otherwise have.

The present world order is in the desperate need to uphold the principle of multilateralism so that all countries experience development and prosperity and not the few at the cost of others.


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