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Why is the EU Seeking a WTO Alternative? Key Insights

The World Trade Organization (WTO) is under scrutiny as the EU proposes alternatives and the U.S. sidelines multilateral trade rules. With India gearing up for its 8th Trade Policy Review, this topic is crucial for exams like UPSC, SSC, PSC, and more. Here’s a breakdown of key issues, sample Q&A, and why aspirants should take note.

Key Points to Understand
1. WTO Trade Policy Review (TPR) & India’s Role
India’s upcoming TPR comes at a critical time when the U.S. rejects WTO dispute mechanisms, opting for bilateral deals.
Experts warn this shift threatens rules-based trade, especially for developing nations like India.

2. Why is the EU Pushing for a WTO Alternative?
European Commission President Ursula von der Leyen suggested a Europe-led trade coalition (possibly with CPTPP nations) to replace the struggling WTO.
Rising global trade conflicts and a non-functional Dispute Settlement Body (DSB) fuel this move.

3. India’s Stance & Challenges
Developing Country Status: India leverages this classification to protect its trade interests but faces pressure from developed nations.
WTO Reforms: India advocates for transparency, fair dispute resolution, and special protections for emerging economies.
Recent Actions: India filed multiple disputes against the U.S. (e.g., retaliatory duties on steel/aluminum tariffs).

Sample Questions & Answers for Competitive Exams
Q1: What is the primary purpose of the WTO’s Trade Policy Review (TPR)?
A1: The TPR ensures transparency by evaluating member countries’ trade policies and practices periodically.
Q2: Why is the U.S. blocking appointments to the WTO’s Dispute Settlement Body?
A2: The U.S. criticizes the WTO for overreach and prefers bilateral negotiations over multilateral rulings.
Q3: How does India’s “developing country” status impact its WTO negotiations?
A3: It allows India longer timelines to implement agreements and safeguards for key sectors like agriculture.
Q4: What was the EU’s proposal to replace the WTO, as per recent reports?
A4: A Europe-led trade partnership with CPTPP nations to create a more “structured” alternative.
Q5: Name one recent trade dispute India filed against the U.S. at the WTO.
A5: India challenged U.S. tariffs on steel and aluminum exports, seeking retaliatory duties under WTO rules.

Why This Matters for Exams
UPSC (Mains): Topics like international institutions (WTO) and India’s trade diplomacy are recurring themes in GS Paper II.
SSC/PSC: Questions on global organizations and current trade policies feature in general awareness sections.
NID/NIFT/FDDI: Entrance exams test analytical skills; understanding trade dynamics helps in essay/GD rounds.
Pro Tip: Link this to broader themes like globalization, economic development, and India’s foreign policy for higher marks!