As India Bends to Trump, the WTO Paves Way for the Washington Trade Organization
In a dramatic pivot from global trade norms, US president Donald Trump appears to have unilaterally launched a parallel system to the World Trade Organization – one that some now call the Washington Trade Organization.
With the original WTO – a rules-based, member-driven, consensus-oriented, Geneva-headquartered body which is nearly 80-years-old – seemingly brushed aside. Trump has strong-armed nations into negotiating directly with the US, transforming Washington into the de facto arbiter of global trade.
This seismic shift was triggered by Trump’s announcement of sweeping reciprocal tariffs on April 2. Though paused for 90 days amid market volatility, the threat remains potent. In the wake of the announcement, dozens of countries – starting with Japan – rushed to Washington in a bid to avoid punitive tariffs, many agreeing to quiet concessions that blur the line between diplomacy and coercion.
India, for its part, proudly declared it was already initiating talks with Washington, casting aside the Geneva-based WTO – a multilateral platform where countries like China and Canada have challenged US tariff actions. So far, the WTO has handled hundreds of cases but now remains paralysed due to the unilateral US stance to remove the binding Appellate Body that ruled against Washington’s allegedly illegal practices in several trade disputes.
New Delhi has repeatedly suggested that its bilateral free trade agreement (BFTA) negotiations are advancing well with multiple voices from the government claiming that the BFTA with the US will result in $500 billion two-way trade by 2030. It begun talks with the Trump administration immediately after the prime minister’s visit, declaring it would soon finalise the BFTA.
While some nations seek a united front to resist Washington’s demands, others have chosen to comply. Around 70 countries are reportedly negotiating with Trump’s new trade order. “There will be a trade deal, 100%,” Trump proclaimed during a White House meeting with Italy’s prime minister Giorgia Meloni, who invited him to Europe for further talks.
Trump’s Washington Trade Organization has already sketched out its payment framework. Stephen Miran, Trump’s chairman of the Council of Economic Advisors, outlined the rationale at the Hudson Institute: member nations must now pay for what Washington calls “Global Public Goods.” These include:
- A US-provided “security umbrella” sustaining decades of global peace, and
- The US dollar and treasury securities anchoring the global financial system.
According to Miran, these goods come at a cost: “Our soldiers take heroic risks to keep the world safe. Our reserve currency has distorted global trade. The resulting deficits have devastated American industry to subsidise foreign growth.”
Hence, the menu of compliance is stark:
- Absorb US tariffs without retaliation.
- Flood domestic markets with American goods.
- Ramp up defence spending – preferably on US arms.
- Invest in American factories to bypass future tariffs.
- Or, most bluntly, write checks to the US Treasury.
- Accept US tariffs without retaliation, providing revenue for “global public goods.”
- Open domestic markets and buy more American goods.
- Increase defence spending – ideally on US-made arms and equipment.
- Invest in US manufacturing, setting up factories to avoid future tariffs.
- Or, quite simply, write checks to the US Treasury.
China is the only nation to openly retaliate in a tit-for-tat framework, matching every tariff increase with equal measure of retaliation. Others, like India, Japan, and several others appear to be caving, sacrificing their core interests, in areas like agriculture, at the altar of Washington’s pressure tactics.
India, once a vocal proponent of trade sovereignty, is reportedly complying with Washington’s demands – from agreeing to purchase defence systems and nuclear reactors, to capitulating on cotton and several other agricultural items that could have damaging consequences for India’s poor farmers. A recent post by US Congressman Jack Kimble suggested that if China “is going to pivots from us, we should do the same and start selling more of our beef to India”.
The shift in India’s ongoing negotiations with the officials of the Trump administration is stark. In 2019, Prime Minister Narendra Modi struck a nationalist, protectionist tone. Today, he has sidestepped direct negotiations with Trump, possibly to avoid political heat. In his memoir No Trade Is Free: Changing Course, Taking on China, and Helping American Workers, the former US trade representative Robert Lighthizer recounts how Trump’s team confronted Modi during G7 talks, in France in 2019, accusing India of being “the most protectionist country in the world” and a job-killer for American workers. According to Lighthizer’s account, Modi sought the restoration of the GSP benefits that were terminated in 2019 but meted with disapproval from the Trump’s side.
Now, that same India appears to be realigning itself with Trump’s vision with breakneck speed and at a steep price . Indian negotiators are now leaving no stone unturned during the upcoming visit to draw up a “realistic 90-day roadmap” to clinch an interim agreement covering a range of issues, including tariffs, non-tariff barriers, and services, according to a report in the Indian express. “The Terms of Reference (ToR) have been finalised and will be further developed with the aim of moving closer to a trade deal within 90 days reciprocal tariffs pause window. Nineteen chapters are under negotiation, covering areas such as tariffs, non-tariff barriers, rules of origin, and customs facilitation.”
A founding member now on the sidelines
Historically, India played a foundational role in shaping the multilateral WTO. Under former prime minister Jawaharlal Nehru, India joined the GATT framework promoting non-discriminatory trade in 1948. In 1994, the Narasimha Rao government, through wide political consultation, joined the WTO’s launch by signing the Marrakesh Agreement. The process included debates, dissent, and public discourse – unlike the current opaque concessions under the Modi government.
Media report suggest that many of these new trade concessions – potentially worth billions of dollars – have gone unannounced in India. The only clarity comes from the verbose president of the Washington Trade Organization himself, who repeatedly touts foreign payments as validation of US might.
While the original WTO was built on negotiated rights and obligations, Trump’s WTO functions as a toll booth: pay up, or get shut out. China has called for reviving the Geneva-based WTO, warning that Trump’s shadow organization could kill the multilateral system altogether.
As India quietly drifts toward the Washington Trade Organization, it risks erasing decades of multilateral leadership. This may go down as a pivotal moment in trade history – when New Delhi, once a champion of global rules, chose silence and surrender.
At a time, when BRICS – Brazil, Russia, China, India, and South Africa – whose combined trade could constitute a potential bloc against Trump’s America, some black sheep seems to be holding back. Whether India’s quiet alignment with the Washington Trade Organization will benefit its 1.4 billion citizens remains uncertain. History, however, will not forget which side New Delhi chose.
The Wire is now on WhatsApp. Follow our channel for sharp analysis and opinions on the latest developments.
