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✍✍Interpreting the India-Nepal - China border dispute
India’s defence minister virtually inaugurated a new 80 km-long road in the Himalayas, connecting to the border with China, at the Lipulekh pass. The Nepali government protested immediately, contending that the road crosses territory that it claims and accusing India of changing the status quo without diplomatic consultations.
Nepal deployed police forces to the region, summoned the Indian ambassador in Kathmandu, and initiated a constitutional amendment to formalise and extend its territorial claims over approximately 400 sq km. India, on the other hand, has conveyed its openness to a dialogue but does not seem to share Nepal’s sense of urgency: its initial statement agreed to a dialogue, but only after the COVID-19 crisis.
the bilateral crisis seems to now be stuck in a stalemate, a worrisome trend in otherwise friendly India-Nepal relations. 
India, answers some of the key questions on the crisis, the possible factors that escalated the dispute, the geostrategic context, and ways to de-escalate towards a solution.


✍✍Why did India build this road through territory claimed by Nepal?
India has been in effective possession of this territory for at least sixty years, although Nepal claims it conducted a census there in the early 1950s and refers to the 1815 Sugauli Treaty as legitimising its claims. But India’s new road, up to the Lipulekh pass, is not an unprecedented change in the status quo. India has controlled this territory and built other infrastructure here before, besides conducting its administration and deploying military forces up to the border pass with China.
The region is of strategic importance, and the new road is now one of the quickest links between Delhi and the Tibetan plateau. In a 2015 statement, China also recognised India’s sovereignty by agreeing to expand trade through the Lipulekh pass. Finally, this is also an important route for thousands of Hindus who trek across the border with China every year to visit the sacred Mount Kailash. Given recurrent military tensions with China, the future potential of trade, and the religious symbolism of the region, India will certainly continue to exercise civilian and military control.

👉👉If you believe in one of Kathmandu’s many conspiracy theories, the timing was part of a secret Indian ploy to support Prime Minister Oli. His government faced a severe internal political crisis in late April and the Indian announcement threw him a sudden lifeline: opposition forces immediately rallied to support his escalatory moves against India, including the proposal of a constitutional amendment.
Most likely, however, the reality is less flattering: Nepal may not even have figured in India’s decision to time the announcement . Unless part of a larger signaling game directed at China, the Indian defence minister was probably more interested in scoring a domestic success by bringing good news during the lockdown period. Even if warned about the negative repercussions this could have on relations with Nepal, Indian decisionmakers clearly did not factor this in. From the perspective of maintaining good India-Nepal relations .

✍✍Did Nepal’s negative reaction catch India by surprise?
The Indian government may have weighed the pros and cons and decided to go ahead despite predictable opposition from Nepal. But according to Shishir Gupta, “New Delhi was surprised when Kathmandu protested over the road.” This is possible, but difficult to believe: any observer of Nepali domestic politics would have easily predicted that the Indian announcement was poised to embolden Prime Minister Oli and fuel a cross-partisan, nationalist opposition against India.
The timing of the announcement may have thus been reflective of miscommunication, lack of coordination or even different assessments by India’s defence, security and diplomatic establishments. It is also possible that an over-confident Delhi thought it would be able to “manage” Nepal and was then caught by surprise by the gravity of the anti-India uproar in Kathmandu.

✍✍Why has this border dispute become so politically charged in Nepal?
In line with democratisation and competitive nationalism, Nepal’s foreign policy is becoming increasingly politicised. The dispute with India has been lingering for years and Delhi’s diplomatic establishment and Nepal watchers were well aware that the issue could blow up anytime. In order to look ahead and repair, revise and revive the bilateral relationship, we must first understand why and how this dispute flared up. It may be tempting to start on a clean slate, but future visions will remain void if both sides don’t learn from past mistakes.
The Indian road was not built overnight and the Nepal government was surely aware and monitoring the situation in Kalapani over the preceding months and years. The issue had come up in November last year, when India announced its new political map, after the revocation of Article 370: as for many decades before, the Indian map continued to include territories claimed by Nepal, but this time the government in Kathmandu took it up officially and publically. 
For the beleaguered Nepali prime minister, announcement thus fell like a gift from heaven as he faced his worst internal crisis since coming to power, in 2017. He was swiftly able to mobilise public opinion, play up nationalist sentiments against India, get his internal party rivals on board, and divert attention from his failed ordinances and challenges to contain the pandemic.

✍✍Are domestic politics hindering Nepal’s foreign policy?
Nepal has one of the world’s youngest populations and, especially after India’s implicit support for the 2015 blockade on the landlocked country, anti-Indian sentiments have been running high. This offers a new generation of Nepali politicians a powerful fuel to mobilise the electorate.
This is one of the reasons why Nepal chose not to attend a multilateral BIMSTEC counter-terrorism exercise hosted by India, in 2018. Delhi had then expressed its disappointment, especially about the Nepali government caving in to popular reservations about BIMSTEC as an anti-China military alliance driven by India. Similarly, the Nepali Communist Party has also created obstacles to the implementation of a United States-sponsored MCC grant that will upgrade Nepal’s electricity transmission system and connect it to the Indian power grid. Only China has been spared from such Nepali political protests, which is paradoxical given that Beijing has hardly delivered on any of its many BRI promises.
Nepal’s foreign policy establishment has embraced an ambitious and forward-looking agenda of external balancing and diversification in recent years, especially under the leadership of its Foreign Minister, Pradeep Gyawali. His participation in the Fourth Indian Ocean Conference, held in the Maldives in 2019, reflects Kathmandu’s widening geostrategic horizons, seeking to place Nepal as a critical connectivity hub between China, South Asia and the Indian Ocean region.

✍✍Did China engineer this border dispute between India and Nepal?
No, the border dispute between India and Nepal was brewing for many months and years, so it is unreasonable to blame China for creating the crisis. The counter-factual is clear: even if we hypothetically imagined China away, Prime Minister Oli and Nepali nationalists would always have reacted negatively to the Indian road announcement. For many years, Delhi was well aware that the issue was prone to politicisation in Nepal.

India’s Chief of Army Staff, however, suggested that Nepal may be bringing up the issue “at the behest” of a third party, alluding to China. Whether India has concrete intelligence backing this up or not is less of an issue than the effect of his words in Kathmandu, suggesting that there was no merit in Nepali’s repeated and persistent demands to discuss the issue diplomatically, at least since the late 1990s. This was also contrary to India’s Ministry of External Affairs statement recognising that there is a dispute and that both parties would proceed, as agreed, to sort this out through a diplomatic dialogue.
All this does not mean that Beijing has not supported or further instigated Kathmandu to take on a more assertive position, especially against the backdrop of the China-India military standoff in Ladakh. This could have contributed to the severity of the India-Nepal crisis. But we simply don’t know enough about the China factor, and it is thus simplistic, if not outright harmful to call Prime Minister Oli’s government “pro-China” or reflexively “anti-India” because of his party’s communist credentials.

✍✍Is China’s political influence in Nepal harming Indian interests?
We know from other recent crises in the region, for example in the Maldives in the aftermath of the 2017-18 Doklam crisis, that China rarely shies away from an opportunity to use India’s neighbours as proxies, especially when its relations with Delhi are tense. Nepal and several other Indian neighbours are young democracies, developing new institutions in a political transition that can be instable, as we see in Myanmar. But Beijing’s authoritarian system and appeal is growing and may hinder further democratisation, undermine the rule of law, or curtail critical media and academic independence.
India has always seen a more democratic Nepal as being in its interest, leading to greater stability and inclusiveness, especially towards minorities in the Madhes. In 2006, after returning his ambassadorial post in Kathmandu, then Foreign Secretary Shyam Saran emphasised that “stability in Nepal is in the best interests of India” and that “democracy in Nepal is the best guarantee of such stability.”
As China’s political influence grows in Nepal, Beijing may have, at least indirectly, encouraged Prime Minister Oli to take a bolder stance against India during the current crisis. Recent examples show how China reportedly mediated between different factions to keep the CPN in power, how it put pressure on critical reporting in the Nepali media, and how it promoted the authoritarian governance model of China’s Communist Party. But often it is also Nepali’s self-censorship and over caution that has the greatest effect, seeking to please China even when Beijing doesn’t really care that much and defers to Delhi.
By playing the China balancing card as a last resort, Nepali leaders often hope to get Delhi to pay attention to festering problems that Indian diplomacy neglects or forgets about. This is a risky game because it raises alarm bells in Delhi, especially in the security and strategic establishments, which are quick to step in and tend to resort to coercive tools that can further escalate the dispute. It is also risky because it assumes China is always willing to extend indefinite support to Nepal at the cost of its relations with India.

✍✍Could this crisis have been prevented?
Yes. The border dispute has been addressed through several official channels since the 1990s, as observed by former Indian ambassador Jayant Prasad. The dispute has roots going back to the 1950s, as detailed in a deeply researched essay by Sam Cowan. Besides Kalapani, there is also a second dispute with India in the Susta river border region. While not well known, there is also a possible issue at the Eastern tri-junction with China and the Indian state of Sikkim.
Both governments agreed during Modi’s 2014 visit to discuss the issue through Foreign Secretary level talks. Nepal alleges that it tried twice to convene such talks since then, and received no positive response from Delhi. In December, there were also reports of India brushing the issue under the carpet, even allegedly refusing to receive a special envoy to discuss the dispute.
At the root of the issue may also be differing interpretations of what exactly warrants a diplomatic dialogue. On the one hand, in Nepal’s maximalist perspective, this should cover all territories it claims, now also including Limpyadhura. The thinking in Kathmandu goes that if India conveys its own territorial claims in official maps, does it have any legitimacy to pressure Nepal not to come up with its own? On the other hand, in India’s minimalist perspective, perhaps reflecting why it delayed dialogue, the issue is seen to be more of a technical nature, focused on delimitation, boundary pillars etc. The current crisis has exposed the extent to which both countries’ interpretations clash and the different levels of priority.

✍✍Does this dispute reflect a deeper problem in India-Nepal relations?
Yes, the current border dispute reflects a growing structural problem in India-Nepal relations. C. Raja Mohan thus identifies the territorial dispute as “merely a symptom of the structural changes unfolding in the external and internal context of the bilateral relationship.”
As I argued in 2017, Delhi and Kathmandu need to work hard to keep their relationship stable, even if not special. For example, India can no longer afford to focus on its past Cold War policies of right of first refusal. No longer an Indian satellite or exclusive sphere of influence, as it is often depreciatively described in Delhi, Nepal has been embracing a policy of strategic diversification to reduce its dependence on India and enhance its non-aligned autonomy.
The rising presence of China across the Himalayas, especially after the BRI, forced India to recalibrate its policy towards Nepal. Delhi has begun shifting the emphasis away from geostrategic denial and insulation towards greater economic delivery and connectivity. This has been a tough adjustment, beginning in the 2000s, but with many Indian actors pushing in different directions. Some in India still look at twenty-first century Nepal through a nineteenth century colonial prism: as a buffer state with limited sovereignty, where India’s resources should be focused on political engineering and cultivate assets to topple a pro-China “puppet government.”
There is no better example of the larger problem in India-Nepal relations than the tragic fate of the report prepared by the Eminent Persons Group (EPG) from both countries. The EPG was mandated in 2015 by Prime Minister Modi and former Nepali Prime Minister Deuba to assess the state of bilateral relations and come up with major recommendations, whether on the 1950 Treaty or the open border.
Submitted in 2018, the EPG report has still not been accepted: sources initially noted that Prime Minister Modi had not found the time, but by now it is obvious that Delhi is uncomfortable with some of the non-binding, expert recommendations that it had commissioned itself. Such lack of confidence and openness to reassess the fundamentals of the relationship has transmitted negative signals to Nepal.

✍✍Does this crisis reflect a failure of India’s Neighbourhood First policy?
No, it is rather simplistic to assume that this crisis reflects a failure of India’s regional strategy. On Nepal, in particular, the successes have been astonishing since the 2015 course correction, after the blockade. After 2017, in particular, Prime Ministers Modi and Oli engaged at the highest level on multiple occasions and developed a direct, political and personal link that India-Nepal relations were often lacking, maybe since the 1980s.
Most importantly, driven by a new logic of interdependence and connectivity, India invested in upgrading its cross-border infrastructure and economic assistance: there are now new rail and road links, an electronic cargo system for Nepali goods to transit via Indian ports, inland waterway navigation plans, and a new cross-border pipeline for petroleum products. These are just some examples of the many achievements of India’s new connectivity strategy, focused on delivering more, better and faster to support the development objectives of Nepal and other neighbours. Unfortunately, these silent successes rarely make it to the headlines in Delhi or Kathmandu.
India’s new approach to Nepal has been gaining ground, especially in diplomatic circles, in different line ministries, in cross-border states/regions, and among a new generation of business and civil society stakeholders on both sides. But it still remains a secondary approach and work in progress. The traditional approach, focused on security, military and other geostrategic factors, continues to prevail, especially in moments of crisis and tension such as now.
As I argued in 2017, it will take some time for India to de-addict itself from the temptations of micromanaging Nepal’s internal politics. Delhi’s proactive engagement of the Nepal Communist Party (NCP) majority led by Prime Minister Oli was a welcome development, reflecting new pragmatism and a focus on delivery and connectivity. It is important for Delhi to realise that Kathmandu politics matters, but that different governments will come and go, all proclaiming an “India first” policy even while balancing with Beijing and others. India will continue to have its friendly political preferences in Nepal, but it should never forget that only its interests are permanent.

✍✍Why has India not yet taken the initiative to defuse tensions and begin a diplomatic dialogue?
India’s silence is the greatest cause for concern for the future of bilateral relations and is creating natural uneasiness in Kathmandu. After indirectly indicating its displeasure at the politically charged environment in Nepal, India has largely remained silent. The optics of the Indian ambassador in Kathmandu being summoned also conveyed India’s discontentment: the envoy simply “stated” Delhi’s position and handed over a public declaration of the MEA’s spokesperson.
One month later, we have still not seen any significant de-escalatory move from Delhi, and that betrays clear intent, especially in a context of friendly relations marked by a positive phone call between both leaders in early April. Silence speaks volumes and the relationship may now be in for a deep freeze. We do not know the exact reasons why, but it certainly transpires that Delhi does not feel comfortable to address the issue at this point or in the current context.
In recent weeks, India received the United States special representative for Afghanistan, held a virtual leaders’ summit with Australia, and participated in a border meeting with China to resolve the dispute in Ladakh. So it is certainly not for lack of time or interest that nobody in Delhi has yet found the time to talk to Nepal .

✍✍Does this mean India has lost confidence in Prime Minister Oli?
It is possible that this affected Delhi’s trust in Prime Minister Oli, especially given how long this dispute has played out and that both leaders have still not talked to each other. Whether it is because of his relations with China, his politicisation of the dispute, his jibes at India’s national symbols, or any other possible reason, it certainly looks like Delhi may now be less confident in Prime Minister Oli. This does not mean India will interfere to support any political alternative, despite what may circulate in Kathmandu’s many conspiracy corridors.
The reality, once again, is less flattering. Delhi may simply not care, having made its displeasure clear and now willing to wait it out. This would mean that India may now see Prime Minister Oli as more of a problem, rather than part of the solution to improve bilateral relations. Trust and direct communication is critical for India, and previous India-Nepal crises have generally flared up when Delhi picks up signals of anti-India rhetoric, a politically hostile environment, and extra-regional involvement – normally China. This would reflect a worrisome disruption in bilateral relations and, most importantly, a possible end to the strong personal and positive rapport both prime ministers have developed in recent years.

✍✍Are both sides really interested in a dialogue?
Not necessarily. Nepali analysts often overestimate the importance of their country in India’s foreign and security policies, or read too much into its allegedly “strategic” outlook. Not everything is planned in detail: Delhi’s decisionmaking, even on next-door Nepal, can be quite confusing and contingent. With many other urgent issues taking precedence in India, whether the COVID-19 pandemic at home or the military standoff with China, Nepal may simply not be a priority.
India’s calculation may be that it can afford to wait this out, watching how Kathmandu’s politics play out. This would be in line with the old colonial Raj tradition of “masterly inactivity.” On the other hand, Prime Minister Oli is unlikely to just get on a call with India without any significant assurance that he can present as a political victory at home, even if only to save face. So we may be in for a prolonged stalemate. As a Hindustan Times edit points out, however, this stasis may end up hurting Nepal more than India.

✍✍Will India ever give up control over the territory claimed by Nepal?
Unlikely and certainly not under any compulsion. Nepali nationalists may like to believe that passing a constitutional amendment, roping in the support of China or internationalising the issue at the United Nations will force India to back down. But it is doubtful that any realist in Kathmandu, especially Prime Minister Oli, is under the illusion that Delhi will cave in to any such demands or coercion. This is why despite all of its political rhetoric and pressure, the Nepali government has always continued to emphasise the importance of a diplomatic dialogue.
This crisis thus reflects that it is not easy for Prime Minister Oli, or any other Nepali leader, to have its cake and eat it too: having opened the pandora’s box of Nepali nationalism and anti-India rhetoric, it will be difficult to force that genie back into the bottle of policy pragmatism that is required to earn India’s trust.

✍✍Are there any possible solutions to this dispute in the long term?
Even after political trust is restored and diplomatic dialogue begins, whether in a few days, months or years, both sides will have to compromise. The border dispute has now turned into a permanent political irritant between both countries. The status quo privileges India, which is in comfortable control of the territory. India may choose to stall and brush the issue under the carpet again, but not without significant damage to its interests and influence in Nepal.
The sooner India settles this dispute with Nepal, the lesser the chances for China to get involved. Beijing has chosen to remain quiet this time, but its future calculation may change. The Kalapani dispute between India and Nepal is also an almost perfect mirror case of the 2017 Doklam crisis between China and Bhutan, where India stepped up and deployed its military forces to restore the status quo ante.
As noted by Dinesh Bhattarai, a former Nepali diplomat, the border dispute “looks minor, but allowing it to fester is likely to sow the seeds of immense competition and intense rivalry in the sensitive Himalayan frontier with far-reaching geopolitical implications.” Similarly, Indian scholar and Nepal expert S. D.
Muni cautions that, sooner or later, the dispute “will be exploited by the third parties to their advantage.”
The historical, technical and cartographic claims from both sides will probably lead to a dead-end, with never-ending, clashing interpretations about river alignments and other contentious criteria. Assuming that there is political buy-in from the leadership on both sides, the only workable solution is to seek some form of co-management or shared sovereignty for the disputed territory.
There are many bold possibilities: maybe there could be joint deployment of military and police forces, as during the 1960s on the Nepal-China border. Given the trade potential, both countries could also consider establishing a special economic zone. Finally, it is in the interest of both that Indian and Nepali pilgrims can use the improved infrastructure in the Kalapani region to reach Mount Kailash.
Hostile states have been able to find such innovative solutions in other parts of the world and, at one point, India and Pakistan were close to finding solutions for Siachen or to make borders irrelevant in Kashmir.  Based on their history of friendly relations and driven by pragmatism, it should not be difficult for India and Nepal to think out of the box and find a practical solution. Delhi and Kathmandu could lead the way to liberate the subcontinent from the sovereignist, nationalist and territorial logic that continues to leave everyone in the region worse off.

✍✍The WTO's Existential Crisis: How to Salvage Its Ability to Settle Trade Disputes

US refusal to allow the appointment of new judges (or members) to the World Trade Organization’s Appellate Body—a key component of its renowned dispute settlement system—has pushed the organization into an existential crisis. The Appellate Body no longer has the requisite number of members to hear new cases on appeal. The terms of two of the three remaining members have expired, leaving the WTO without an appeal function. US officials charge that certain Appellate Body decisions on WTO dispute panel rulings have expanded WTO obligations and constrained WTO rights—what trade lawyers call “judicial overreach”—and so they have blocked the appointment of new Appellate Body members until other WTO countries address US complaints. Schott and Jung analyze the WTO cases brought against the United States and find that the problem of judicial overreach seems to surface primarily in a subset of US losses in antidumping and countervailing duty (AD/CVD) cases that target specific methods of calculating dumping margins. They warn that disabling the whole appellate system is a disproportionate response to the specific problem. It will weaken enforcement of WTO obligations and undermine prospects for negotiations to update the WTO rulebook, thus corroding the rules-based trading system, one that has been modeled on US law and practice. A better approach would be to exempt AD/CVD cases from appellate review (while still subjecting them to dispute panel rulings). This targeted change in the WTO Appellate Body process, coupled with procedural reforms already advanced in proposals that have been widely supported by WTO members, could mitigate US concerns and allow the Appellate Body to be repopulated.

✍✍Differing approaches to the WTO’s existential crisis: India and the EU

As its 25th birthday rolled in, the World Trade Organization (WTO), received an unpleasant, but perhaps not entirely unexpected, present: a wide-spread breakdown in its functioning. For long it had been called out for opaque and corporate-greed-fuelled negotiations, but WTO-insiders could at least take heart in the fact that the organization’s dispute settlement system (DSS) was not only functioning smoothly, but in terms of usage and jurisprudence developed, had far surpassed its peers like the International Court of Justice (ICJ) and the International Criminal Court (ICC). However, after 11 December 2019, this little comfort too went out the window, with the complete asphyxiation of the DSS’s appeal mechanism. There is now fairly ubiquitous concern regarding the future of the ‘rule of law’ in trade relations, and some suspect that we may be on our way to the ‘GATT era’, where power-politics, not the letter of the law, determined who was right.
In such a situation, WTO officials urged sensible reform in both mild, and strict tones. However, the purpose of this piece is not to explore the universe of problems plaguing the WTO; suffice to say they are many. Instead, it seeks to briefly lay out the actions taken – i.e. demands made and suggestions forwarded – but two major players: India, a self-styled voice of the ‘global south’, and the European Union (EU), a collective that prides itself in promoting not just free, but also fair, trade. Both players see the benefits the WTO brings and wish for the organization to continue operations. However, both agree that for that to happen, sweeping changes need to be made – the only problem is: they disagree on what these changes should be.
For India, the biggest substantive issue remains the forgotten Doha promise. The only negotiating round conducted under the aegis of the WTO was supposed to highlight problems faced by developing countries; however, for various reasons (and both sides blame one another), developed and developing countries could agree to very little. Instead, the former group proposed negotiations on ‘new issues’ like e-commerce and investment facilitation, which has generally been opposed by India. New agreements cannot be signed, it says, until old issues are resolved. This position was exemplified in 2013, at Bali, when India threatened to torpedo the almost-clinched Trade Facilitation Agreement (TFA) till its concerns over food security were addressed. This resulted in a ‘peace clause’ – an understanding that India could exceed its subsidy-granting limits for certain crops (recently operationalized for the first time in light of the Coronavirus situation), and that this would not be challenged by others under the DSS.
As a speaker for developing countries, India has also strongly resisted efforts by countries like the United States (US) to straightjacket the definition of ‘developing countries’, who are otherwise granted some flexibilities in rule-implementation. In response to US’s demand to insert ‘objective criteria’ to determine which countries qualify, India (along with four others) pushed to keep the status ‘self-declaratory’: it presented figures such as per capital income and capacity constraints, and alleged that the developed bloc was “kicking away the [developmental] ladder”, especially given that previously developed countries received ‘reverse’ relaxations and waivers. As a negotiating modus, India is strongly committed to the ‘consensus principle’ (one Member one vote, and decisions to be taken only by consensus), and has not been a part of plurilateral talks for the Trade in Services Agreement (TiSA) and the Information Technology Agreement – 2 (ITA 2), notwithstanding those that opine that given India’s relative strength in these areas, it should be involved in these negotiations, in the least, in order to influence the outcome.

Finally, with respect to the DSS, India has been highly critical of the US’s approach of blocking appellate appointments in bad faith, and has organized ‘mini-ministerials’ in Delhi to garner consensus regarding away forward. In 2018 it co-sponsored two submissions, with the EU, setting out its main concerns as well as some possible solutions regarding, inter alia, concerns about judicial-overreach and delays in release of dispute rulings. However, in what some can read as a telling statement, the trade minister recently declared in Parliament that India was under “no obligation” to implement a recent ruling against it, given the non-functioning of the appeal system: one can wonder to what extent this is in good faith.
As for the EU, currently it seems to be mainly preoccupied with keeping the DSS intact. To that end it has been an active submitter of proposals, hoping to bring the US to a constructive dialogue. It was however wary of the side-deal struck between US and China to halt their trade war. And when it realized that nothing could save the appeal mechanism (as originally intended) it found a creative legal solution by using a rarely-used, barely-known WTO provision to establish a parallel system for appeals. Initially partnering up with Canada and Norway, the EU has brought this arrangement to the approval of 15 signatories (India not being one of them, though interestingly, China is). On substance, it is a strong proponent of discussing e-commerce and investment and has often criticized developing countries for not joining (and sometimes not allowing) the conversation. Further, state subsidization is its big concern: it feels that current rules are insufficient to reign in (Chinese) ‘state-owned enterprise’ (SOE) subsidies, and in its 2018 ‘concept paper on WTO modernization’ it expressed disappointment at the low level of subsidy notification, even suggesting “sanctions for wilful and repeated non-compliance”. Finally, while not as persistent as the US, the EU too does not favour ‘undifferentiated’ developing country status and has urged Members to graduate, so that relaxations can be “needs driven and evidence based”.
In all, a well-functioning WTO, that takes care of all sides, is a priority for all countries – if, for nothing else, than the fact that the modern global economy requires an umpire. Fixing the system and not toppling it should be the priority of both India and the EU. While the EU is mostly transparent and well-organized in trade-policy, India has been previously criticized for uncoordinated decision making. This was evident from its recent last-minute departure from the Regional Comprehensive and Economic Partnership (RCEP) table. However, given that for the first time in living history, US’s hegemonic position seems to be crumbling, the time is ripe for India and developing countries to increase their say in global economic governance. ‘Let no crisis go to waste’, as the old saying goes, and the problems at the WTO are an opportunity to build a better global organization, and for India and EU to assume responsible, forward-looking roles, that cement their positions as true global leaders.