UPSC DAW 18th October 2025 Mains Answer Writing - 2026

UPSC DAW 18th October 2025 Mains Answer Writing - 2026

Question

In the era of rising protectionism and trade wars, the World Trade Organization seems to be losing its centrality in global trade governance.” Discuss. (250 Words, 15 Marks) 

Model Answer

Approach: Introduction:  

  • Contextual Introduction. 

 Body :  

  • Present challenges and Relevance of WTO. 

  • What should be done? 

 Conclusion :  

  • Way forward. 

 Introduction: The WTO, created in 1995 to promote a rules-based multilateral trading system, now faces a serious credibility crisis. The surge in protectionism and trade wars has weakened its authority, raising questions about its continuing relevance.  

Body: 

  1. Present Challenges in Global Trade: 

  2. Rising Protectionism: 

  • Many nations are using tariffs, subsidies, and localization policies to shield domestic industries. 

  • The U.S. 2025 tariff plan (10% on all imports, 60% on Chinese goods) signals a retreat from free trade. 

  • India’s Atmanirbhar Bharat and the EU’s Carbon Border Adjustment Mechanism (CBAM) also reflect selective protectionism. 

 2. Trade Wars and Geo-economic Rivalries: 

  • The U.S.–China trade war has disrupted global supply chains and undermined trust in WTO-led resolution. 

  • Technology and security have merged with trade policy — evident in export controls on semiconductors and supply-chain decoupling. 

  • This shift from cooperation to confrontation weakens multilateral trade governance. 

  1. WTO’s Diminishing Relevance: 

  2. Dispute Settlement Paralysis: The Appellate Body remains defunct since 2019 due to U.S. vetoes, rendering WTO rulings unenforceable. 

  3. Stalled Negotiations: The Doha Development Round remains unresolved, with no consensus on agriculture, fisheries, or subsidies. 

  4. Fragmentation of Global Trade: Countries increasingly rely on regional trade blocs (RCEP, CPTPP, USMCA) instead of WTO mechanisms. 

  5. Inability to Address New Trade Issues: WTO lags behind on digital trade, e-commerce, and climate-related trade measures, reducing its policy relevance. 

  6. Marginalization of Developing Countries: Issues like public stockholding and special safeguard mechanisms remain neglected, eroding trust among the Global South. 

  1. Despite challenges posed by rising protectionism and trade wars, the WTO continues to hold significance in global trade governance through the following roles: 

  2. Administers global trade agreements such as TRIPS, ensuring compliance and uniformity among members. 

  3. Resolves trade disputes through its Dispute Settlement Mechanism, preventing escalation into trade wars. 

  4. Provides a negotiation platform for evolving trade issues like services, e-commerce, and agriculture. 

  5. Maintains a rules-based trading system promoting fairness, transparency, and predictability in global trade. 

  6. Facilitates global growth by lowering trade barriers and enhancing market access for all economies. 

  1. The Road Ahead: Reform or Replacement? 

  2. Reform Needs and Barriers 

  • Structural reforms are crucial to restore WTO’s credibility: 

  • Rethink consensus-based decision-making 

  • Revamp the DSM 

  • Improve transparency and monitoring 

  1. Role of Major Players in Reform 

  • U.S, China, and EU must take lead in reform negotiations. 

  • India and other developing nations should engage constructively. 

  • Sensitivities like agriculture and digital trade need nuanced handling. 

  1. Multilateralism vs. Bilateralism 

  • Bilateralism is weakening multilateral institutions. 

  • WTO’s revival is essential for: 

  • Equity in global trade 

  • Predictability 

  • Conflict resolution 

  • A reformed WTO can protect small and developing countries from trade imbalances. 

 Conclusion: The WTO’s decline poses serious challenges to multilateralism, especially for developing economies. Urgent reforms in its structure, decision-making process, and dispute mechanism are essential. A revitalized WTO remains crucial to ensure a rules-based global trade order, address emerging trade issues, and prevent a shift towards economic unilateralism.