Will WTO’s Cancun become Cantcun?
In about a fortnight’s time, trade ministers from 146 member countries
of the WTO will congregate for their two-yearly meet at Cancun, Mexico.
At the last such conclave held in November 2001 at the Qatari capital,
the Doha Development Agenda was spelt out. Its objective is to further
liberalise global trade in a manner so as to enhance gains for developing
countries. All negotiations are to be completed by January 2005. Not
much has actually been accomplished so far.
At Doha, India stood in splendid isolation. Most countries indulge in
multilateral rhetoric but open bilateral windows of compromise. Not
India. Mr. Murasoli Maran cannot be blamed. He reflected an all-party
consensus to commit hara-kiri. His successor’s brief at Cancun will
be no different. The noise that India makes in international forums
is disproportionate to its measly share of world trade of less than
just 1%. Part of the problem is that no government in India has had
the courage to sustain a campaign for public education on WTO-related
issues.
D ispute
settlement is at the heart of the WTO. India has lost some cases like
in drug patents and won some against the USA and the European Union
in areas like textiles. This system has to be made more effective. It
is in India’s interests that the reluctant Americans, Europeans and
Japanese reduce their huge farm subsidies, both overt and covert. But
our case for championing this cause is eroded when we keep increasing
import duties on agricultural commodities. We have also committed absurdly
high levels of “bound duties”-that is the maximum level. We
must review agricultural subsidies even though the WTO is not forcing
us to do so. Indian agriculture is being starved of essential public
investment because most of government’s money goes into subsidies. We
also have to ask ourselves, even though there is no WTO pressure, whether
the huge amounts we spend on food security-Rs 28,000 crore this year–
is achieving its objective. Quotas on textile imports will be abolished
in the USA and Europe by January 1. 2005. We have to be fully prepared
for this new regime.
India
must introduce product patents for pharmaceuticals by January 1, 2005.
This will greatly help Indian science and technology. Countries like
Brazil have WTO-compatible patent laws while retaining the right for
sovereign action during well-defined public health crises. Here, the
US White House has not played fair by giving in to lobbying by US drug
firms. Liberalisation of trade in services is of particular interest
to India, but we must give just as we take. In recent years, there has
been an increase in protectionist sentiment in the western countries
on visas, for instance. But through bilateral agreements with the USA
and the EU, such barriers can be overcome. It is pathetic that India
continues to harp on “special and differential treatment”
for developing countries. Africa needs this. India does not. India’s
case against the use of anti-dumping duties by the developed countries
has lost its legitimacy. It is now the largest user of such duties.
The hurt that is inflicted upon us is greater than the damage we can
cause our trading partners.
WTO
is as much of trade law as much as of trade. But we have yet to build
up significant expertise in this area. Domestic legislation to take
full advantage of the WTO also must be in place. The Chinese are using
the WTO to drive fundamental internal reforms. On the other hand, many
in India—industry, political parties, academics and NGOs– still look
upon the WTO as an evil devil. Greater exports from India are prevented
not by external constraints but by our own policies at home, whether
it is agriculture or textiles or labour-intensive manufacturing. Twenty
years ago, China’s exports were twice that of India’s. Today, they are
over six times greater. The same is true of imports. This is important
as India still clings to the notion that fair trade means more exports
and little or no imports.
