JR: No, I think I certainly did
not argue that a Millennium Round was inevitable because once President
Clinton had thrown his weight in favour of the labour unions and the
trade unions (you know, he gave an interview just prior to the Seattle
Conference), it became very clear that Seattle was headed no where,
that it was going to end in chaos, in disaster. What I had certainly
argued before Seattle was that India should proactively try to influence
the agenda for the so-called Millennium Round, the idea for which had
been going around since 1996. Before Seattle, once Clinton had made
common cause with the trade unions for his own domestic political purposes
– to boost Al Gore’s re-election chances – it was very clear that the
Millennium Round was a non-starter. But it is true that I have consistently
held the view that India’s concerns on agriculture, on intellectual
property rights, on services, which could be in one way termed as implementation
concerns, can only be addressed in the context of a new round. It cannot
be addressed through a bureaucratic process of negotiation at the WTO.

AG:
But the main grievance of developing countries
is why they must make further concessions just to ensure that developed
countries fulfill their previous obligations. By accepting a new Round,
will we not acquiesce to the inaction of and protectionist interests
in developed countries?

JR: It’s certainly true that so
far as Europe is concerned, any concessions that they make on agriculture
is not a favour; these are all commitments they have already made in
the Uruguay Round. But I have not taken the view that we should agree
to a Multilateral Agreement on Investment, for example. I view the new
Round, or any Round, the agenda in terms of three categories.

Track I would be agriculture, services, intellectual property rights,
anti-dumping, and so on and so forth. That is where we have to actually
get commitments. Industrial tariffs also, I would put it in that category.
Second, I would argue are issues like procurement, competition policy,
and investment where we should have domestic laws before we start taking
on international commitments. But where it is in our interest to do
things even without the WTO telling us (for example, procurement – how
can you argue against transparency in procurement, against competition
in procurement, against fairness in procurement; similarly competition
policy – the objective of competition policy should be to promote competition,
not decrease competition), Track II really involves issues where we
need domestic legislation in any case. Once we have domestic legislation
we can take on international obligations, a period that could take anything
between three to five years.

Track III are clearly the social clause issues – labour and environment
– which we should discuss by the way but which we cannot link with trade
because it is bad economics, bad politics. Labour, of course, is under
the ILO; for environment there’s already a committee on trade and environment
in the WTO. And frankly I see no great harm in accepting the NAFTA type
of approach, which is no link with market access, no link with trade
negotiations but NAFTA only enjoins the US, Canada and Mexico to implement
their own standards; and have consultations on the implementation process.
So on labour and environmental standards, while the argument should
be “no link with negotiations”, I think the argument should also be
that we have no reason to feel defensive about, that we are willing
to talk.

AG:
In fact, Arvind Panagariya has argued, in an article
in The Economic Times a few months back, that the US itself does not
conform to many of the labour laws that might be brought into the multilateral
regime. The shoe’s on the other foot in that sense.

JR: We actually have nothing to
be defensive about on this. Incidentally, Subramaniam Swamy had an argument
some years ago with which I had some sympathy. He said that if it’s
going to cost us $ 6 billion to eliminate child labour, let’s bring
child labour on to the international agenda and let’s get the $ 6 billion
in terms of resource transfer to India to start schools, educational
programmes and so on. There is some merit to be said for this. There
are two arguments here. Should Indian carpets be banned because of the
use of child labour? That’s a linkage with the trade argument. That’s
bad economics, bad politics but good for the guilty conscience I suppose.
. But the other argument is why are we afraid that this issue does in
fact get raised? Because it is a problem and if the international community
is willing to help us to address this problem, in terms of resources,
then we should make use of this opportunity. He made this argument four-five
years ago in a report that he produced on labour standards.

But the appropriate forum is not the WTO, it is the ILO. In fact, now
there is a consensus of views that even on intellectual property rights,
the WTO is not the right place, but it is really the WIPO, which is
the World Intellectual Property Organisation. And that it was a mistake.
Economists, T. N. Srinivasan for example (who is a very WTO-friendly
economist), has taken the view that the WTO is not the appropriate forum
in future for the TRIPS, it is the WIPO. This assumes special significance
because one of the concerns for India is the link between TRIPS and
the Convention on Biological Diversity, the CBD, particularly when it
comes to things like Basmati, protection of bio-resources, and so on.
What will be the appropriate forum for the CBD? Certainly, it will not
be the WTO. So I think these institutional questions also require to
be addressed.

JR: First of all, in all these things
we have to have our own domestic legislation. That’s the first absolute
requirement. For example, on this Basmati controversy also, the fact
that we didn’t have a Geographical Indications Bill, the fact that we
didn’t register Basmati as a geographical indication domestically, was
a deterrent for it to be recognised internationally. Although under
the present WTO Agreement only wines and spirits are accepted, but nevertheless
our international case gets strengthened if we have domestic legislation.
We don’t have domestic legislation on bio-diversity, now we have legislation
on geographical indications, we now are formulating the rules for domestic
legislation on plant varieties, but it’s still in the works. So, I think
the lesson one draws from all this is you’ve got to have domestic legislation,
which is of world standards.

Let’s take the other example. Today, in intellectual property rights,
the big issue is on the price of anti-retro viral therapy for AIDS.
Now there is the Indian route and the Brazilian route. Now Brazil is
TRIPS compatible in every sense, and it has said to the Americans that
“we are going to have compulsory licensing, we are going to bring down
the prices of anti-retro viral drugs, as far as AIDS treatment is concerned.
And the Americans have decided not to contest that case. Similarly with
Argentina. But the Indian thing is that we have not yet passed our own
domestic law. Although we are on target, we have until 2005, but still
our domestic patent law is not WTO compatible in the strict sense of
the term. In the sense that we don’t allow foreign product patents as
yet, particularly in the pharmaceutical and the chemical industry. So,
the Indian thing is ‘be out of TRIPS and keep throwing stones at TRIPS’
whereas the Brazilian approach is ‘be in TRIPS’ and use the flexibility
that TRIPS offers to protect the national interest. South Africa, Israel,
these are other examples.

AG:
On the issue of investment, in a recent paper
Nagesh Kumar has argued that following the bilateral rather than the
multilateral route on investment measures has proven more successful
historically.

JS: I am not a great believer in
this Multilateral Agreement on Investment. First of all, it’s immaterial
to foreign investment, there is no link between that and investment
laws. I think it’s a bunch of OECD bureaucrats, trying to find work
for themselves who thought of this! Even the Americans are not very
keen on this. This is really an EU (not even the British) type of an
effort. Frankly, I don’t lose much sleep over it. But I agree with Nagesh
incidentally that the Bilateral Investment Promotion treaties have proved
to be more advantageous for us. Maybe that’s the route to take. In many
of these international trade negotiations one has to walk on two legs
– one has to walk on the bilateral leg and one has to walk on the multilateral
leg also. For example on Basmati, the Basmati patents issue we my have
won but the Basmati trademark issue is very much alive. And that we
can deal with only bilaterally in the US courts.

The Chinese have mastered the art of doing bilateral deals with the
Americans while entering the multilateral process. Where I think we
tend to become very fundamentalist. Our approach should be that we stand
for the sanctity of the multilateral process but when we find the multilateral
process slow, when we find the multilateral process not working to our
advantage we’ve been edged out (for example, we have been edged out
of textile exports because of NAFTA) then I think we should end up doing
a bilateral deal; there’s no harm in doing bilateral deals. But we should
take a position that all bilateral concessions and preferential treatment
should be MFNised in a reasonable time frame. I would argue that
in a five-year time frame all bilateral deals should be MFNised.

AG:
But coming back to the “sanctity of multilateral
agreements”, again after the Seattle chaos led to the Special Sessions
on Implementation Mechanisms being set up, at repeated meetings only
about 10% of the issues on implementation, that had been raised at Seattle,
were discussed. Then, it becomes very difficult for developing countries
to even profess the sanctity of the multilateral regime.

JS: The
main culprit, as far as I can see, in implementation right now is on
the Agreement on Agriculture and the main culprits are Europe and Japan.
The Americans have made common cause with the Cairns Groups and they
want faster trade liberalization because basically, they have put all
their subsidies into a box that will not be amenable to any cuts! But
I think more fundamentally, more than the implementation of the Agreement,
many parts of the Agreement on Agriculture need to be renegotiated.
So, I think that’s why the new Round becomes absolutely critical. I
agree with your basic point that they are not doing us any favour. But
if we are going to take the fundamentalist position of no new round,
then we can spend the next five-six years trying to figure out how these
commitments are going to be met.

AG:
I think that brings us to the question of whether
we are really isolated or not. In fact, the Chinese Foreign Minister,
in July, announced that China is in favour of a new Round, probably
as a way of getting the US to admit it into the WTO�

JS: Yes, I think on July 4th or
July 7th when the working group negotiations came to an end, they announced
that they would like a new Round.

AG:
Right. But, on the other hand, there’s been the
G-15 Summit in Jakarta in May, the Like-Minded Group statement in July
and the Development Agenda of the 49 Least Developed Countries, all
expressing reservations about a new Round, including Malaysia, which
is a key player in the ASEAN. So, how isolated are we really?

JR: The basic point is many countries
come on board with us initially. But our experience in the Uruguay Round
is that, one by one, everybody just surges to maximise their own interests.
For example, according to the Indians Jamaica is a Like-Minded Country.
But when I talked to Bob Zoellick, he said, “That’s news to me! I thought
Jamaica was like-minded as far as the US was concerned.” Even in the
Uruguay Round, Malaysia, Mexico, Argentina, Brazil, these were all countries
with India, on intellectual property rights, but one by one, they all
fell by the wayside. Our approach should be very cold-blooded in this.
What is our interest and how best is our interest served? Our interest
is to get these commitments off the ground, our interest is to prevent
new issues from becoming subject matters of market access in negotiations,
and our interest, in my view, should be to build an alliance with the
US. Much more than the Uruguay Round, in this new round the interests
of India and the US converge, whether it is agriculture, whether it
is services, whether it is e-commerce. I think the entire TRIPS debate
in the last five years has been transformed. The one single AIDS issue
has made America much more sensitive to the needs of consumers. Pharmaceuticals
are not exactly favoured boys in the American discourse. I believe that
the South Africans and the Brazilians have brought a division in the
debate.

AG:
It’s interesting that you want this alliance
with the US as a key strategic move on India’s part. You had talked
about this the transition from “panga to pragmatism” in a speech that
you made at the Asia Society in New York in 1999. That was more in terms
of strategic diplomacy. In trade diplomacy, what exact moves would you
want India to adopt in making that transition?

JR: Well, why not a Free Trade Agreement
with America? Not the Jordan-type FTA where labour and environment become
very much part of the negotiating agenda. But why not a NAFTA-type agreement
where there’s a commitment only to discuss and implement your own standards?
At least start the ball rolling. It might take you some time but at
least then you have demonstrated your bonafides, you have demonstrated
your credentials, you have demonstrated an interest to engage the Americans.

But the American perception is that India is obstructionist and that’s
what you really want to combat. And the fact of the matter is if you
want to pry open international agricultural markets, you have to work
with the Americans. If you want to pry open international service markets,
you have to work with the Americans. On the service argument, it’s an
interesting thing that Germany gave 22,000 visas (Green Cards) last
year, of which they got only 4,000 applications, and only 400 hundred
were from India. So I don’t think visa is a constraint as far as skilled
manpower is concerned. Yes, sure it is a constraint as far as the aayas
(housemaids), butlers and cooks (the ABC economy) are concerned. I don’t
think the H1B rate of rejection is very high. So, even in services,
the argument that the markets are closed to us, I don’t buy it entirely.
You take the Middle East. We have two million Indians in the Middle
East. While it’s true that we must liberalise services trade, to argue
that India’s services exports have been dramatically and adversely affected
because of regulations in the destination countries might be exaggerating
things.

Similarly, on agriculture my argument would be that much more than implementation
of the WTO Round, it is our own domestic policies which have come in
the way of faster exports. We have stop-go policies. Our own competitiveness
and our own minimum support price policies today have made Indian rice
and Indian wheat non-competitive in world markets. I think while an
international environment enables market access, ultimately the rules
of international competitiveness are to be found in domestic economics.

AG:
But in international economics, and since you
mentioned bilateral agreements with the US, you also write that we cannot
“wish away Bhagwati.” And we know Bhagwati’s and Srinivasan’s position
on this. So, would you think that it would not be a move away from multilateral
regimes?

JR: It is, it is. But I am taking
a practical position. Bhagwati’s is a purist position. I appreciate
it. But this is very important: the MFNisation of preferential tariffs
worked out as part of PTAs or bilateral trading agreements. India must
take a strong position that this is open regionalism that we are talking
about and not restricted only to the contracting parties. I look upon
the bilateral track with the US more as a matter of tactics rather than
strategy. It’s not the end product. But it is more of a matter of a
confidence-building measure with the Americans, that India wants to
engage in international trade diplomacy.

AG:
Again on the question of being obstructionist, you have argued that
India should build a team of economic, legal and diplomatic experts
who can again take that proactive approach. Again it seems that even
large developing countries, like India and Brazil, face much larger
and much more well researched teams from the developed countries at
these multilateral fora. How well placed are we for the Doha Ministerial?

JR: When I went to China, for example,
I was amazed at the extraordinary assistance that the Chinese were trying
to get, legal assistance. See WTO is not just about trade; it’s more
about trade law, much more about jurisprudence. The Chinese have recognized
this. We think it’s about trade still, so only economists talk about
WTO. When I went to China, I was amazed at the number of German law
firms, American law firms that were providing technical assistance to
their Chinese counterparts, training the Chinese in this area.

Unfortunately, trade in this country has been dominated by the bureaucracy,
like most things. And I find it very strange that Zoellick, before he
comes to India, gets briefed by Jagdish Bhagwati and Arvind Panagariya
on India, whereas when our Prime Minister or our trade minister goes
to New York, he doesn’t see it fit to consult these guys. I met the
Prime Minister recently; he asked me what he should do in New York.
And I told him that the most productive thing he can do in New York
is to call six or seven Indians who are at the cutting edge of WTO work
and talk to them for an hour as to what is to be done, what should be
India’s negotiating strategy. There’s Jagdish Bhagwati and T. N. Srinivasan
at the broad policy level. Arvind Subramanian is an acknowledged expert
on intellectual property rights. Aaditya Mattoo, at the World Bank,
is a front-ranked scholar in the whole area of trade and services. Then
you have Arvind Panagariya himself who is perhaps amongst the top trade
economists. You have Jayashree Watal who has now brought out a book
on intellectual property rights and who is perhaps today the world’s
leading authority on how developing countries can use the existing TRIPS
Agreement to their advantage, to use all the flexibilities, and what
additional changes are required in TRIPS to make it more developing
country-friendly.

But our system does not believe in consultations with the external world.
Seattle, I think, was the first time that some corporates went as part
of the delegation. But homework, a WTO team which has lawyers, economists,
political scientists – we still don’t have a WTO team in the Ministry
of Commerce. We had a guy dealing with WTO, he was shunted off as Secretary
Sports, then somebody else came and how long he continues here, God
only knows! There is no continuity; there is no respect for professionalism.
I tried for two years. There was a young man who came back to India;
I had a small role to play in his coming back to India. He was Arthur
Dunkel’s Special Assistant. Because I knew him, I asked him to come
back to India. I wanted him to be part of the WTO team, because he has
worked in the GATT for ten years, he has been Arthur Dunkel’s ideas
man. The system couldn’t absorb him. We don’t take these issues seriously,
we tend to politicise them too much.

AG:
In fact, it is ironical that in the heyday of
Indian planning, Jagdish Bhagwati had an office on the top floor of
Yojana Bhawan and now he is not consulted. Again on the issue of preparedness,
what do you make of the controversy surrounding the turf war between
the External Affairs and Commerce Ministries in appointing negotiators?

JR: This is an old war that External
Affairs has always felt that it needed a more active role in international
economic diplomacy. The Commerce Ministry has long taken the view that
promoting exports is not its business but international economic diplomacy
is its business! I would argue that the Ministry’s of Commerce’s real
role is to promote exports. And promote imports. Both. But the Ministry
of External Affairs should do all these specialised international economic
negotiations. But where it is located, in my view, is immaterial as
long as you have a critical mass and you have multi-disciplinary team,
which we clearly do not have and which most other major countries have
invested in. And it reflects in the quality of their decision-making.
For example, today there is nobody in India who is looking at WTO case
law, or jurisprudence. There are so many disputes that have been settled
in the WTO. We have won some disputes, we have lost some. What is the
WTO jurisprudence all about? Nobody’s really looked into these questions.
Maximum you’ll talk about four or five intellectual property rights
lawyers in the country. When you talk of anti-dumping, again the same
three or four names keep coming up. This is a field in its infancy and
I feel we need to pay much more attention to developing the human resources,
who will manage this WTO regime better.

JR: Well, Zoellick is a political
appointee; Zoellick does nothing but WTO and trade issues. Why can’t
you have a counterpart like Zoellick dealing exclusively with international
trade issues? The Commerce Minster’s business is to promote exports.
In the US, that is the Secretary of Commerce. Zoellick is not Maran’s
counterpart. So, the institutional structure in India, I am afraid,
politically, economically, and technocratically is incomplete.

AG:
But even in the US, it is interesting because academics have found empirical
evidence that when there is divided government (such as even now) then
the constraints imposed by Congress upon the President (even the Fast
Track Authority) become much stronger. So, in that sense the political
appointee (and it is the American system of having political appointees)
will also have his hands tied?

JR: Of course, we don’t have the
requirement of Parliamentary ratification or approval, and thank God
for that! But what I would argue as the primary role of a political
appointee, a full-time negotiator, is public awareness, public education,
liaising with the states, talking with the NGOs, bringing about transparency
issues. How do you manage the Agreement, the negotiating process politically?
The bureaucracy is a system that gets naturally closed. And I feel that
one needs to draw a distinction between these two functions. Like today,
the Ministry of Commerce should be promoting India’s exports and imports;
not getting itself entangled in details of international trade diplomacy,
for which it is very ill-equipped.

AG:
So, just like the USTR, an Indian TR’s should
be a 24-hour job?

JR: You’ve taken the words out of
my mouth. We need an Indian TR.

AG:
I would now like to dwell on the issue of discourse
for a while. During the Seattle chaos many protesters alleged that the
mainstream media (CNN, BBC, etc.) presented a biased version of events
and conveniently lumped them as violent stooges of hardline American
right-wingers. Do you believe that the globalisation and free trade
discourse has been one-sided or incomplete for informed debate?

JR: I think it’s been hijacked by
fascist elements, by protectionist elements. In fact, the Internet,
which is the icon of globalisation, has benefited the anti-globalisers
more than the globalisers. It’s the Internet that has made the globalisation
of protest possible. But in this what has happened is that a motley
crowd has gotten together. And I am worried that there are genuine fears
of globalisation which need to be addressed but I wouldn’t put protectionism
in this category. I wouldn’t put anti-capitalism in this. You know,
it is fashionable to be anti-capitalist in the West, particularly if
you are from the upper middle classes; you don’t know what poverty is
all about and romanticise poverty. So, I would take these guys with
a great deal of suspicion.

But there are people who have concerns on globalisation, what it does
to employment, to livelihoods, to inequalities, which have to be addressed.
For example, while I am a fundamentalist on trade liberalisation and
investment liberalisation, I am not gung ho on financial liberalisation.
And I agree with Jagdish Bhagwati that trade in widgets is different
from trade in dollars and you cannot lump the two together. And post-East
Asia people have begun to realise that financial globalisation is different
from trade globalisation, that one can push for trade globalisation
and also be very cautious and prudent on financial globalisation. Unfortunately,
the globalisation debate has got murky because of so many factors joining
in and we need to separate out the guys who are really making substantive
points like the pace of globalisation, like the impact on livelihoods,
particularly in agriculture, like the issue of intellectual property
rights. These are genuine issues. But I don’t think all these upper
class kids in Washington and New York or these NGOs are serious protesters.

AG:
Academics, when trying to deal with the global
governance issue, argue that WTO negotiations should be more inclusive,
bring in NGOs?

JR: I think that would be a disaster.
The WTO is an inter-governmental body, it should remain so. It should
leave to governments to consult NGOs. In fact, the single biggest disservice
that has been done to international trade and economics is by people
like the President of the World Bank, who have gone out of the way to
appease the NGO lobby. I think the NGOs are fundamentally a luddite
and ante-diluvium lot. It’s very difficult to find a technology-friendly,
development-positive NGO. By definition, they have to look at the glass
half-empty. If they start looking at the glass half-full, they are out
of business! I know that Joseph Nye has made this argument in a recent
issue of Foreign Affairs that the WTO should be made more democratic.
Of course, it is democratic; it’s one country one vote and it works
by consensus. But he wants NGOs to have locus standi, which I think
is an absolute recipe for disaster and which will be resisted by India
in Doha, and subsequently also.

AG:
It’s interesting that you mention this ‘appeasement’ of NGOs. In Seattle
738 NGOs accredited�

JR: In Doha, incidentally, 647 registered
NGOs are going.

AG:
But again, coming back to your point about upper
class kids from developed countries trying to change the world, 87%
of the NGOs accredited at Seattle were from developed countries. So,
given that in terms of political economy this kind of appeasement will
continue for some time to come, should India try and encourage Indian
NGO to be more participatory?

JR:
No, our NGOs are also following, like comprador capitalism, comprador
NGOism. So our NGOs are equally tied up with their counterparts in the
West. Sometimes they do good. But most of the time, in my view, they
are a force for destruction. They are a destructive lot, they are a
negative lot, and they have their own agendas. So, I think what India
should do is domestically follow a transparent policy. We should consult
as wide a cross-section as possible, we consult NGOs, trade unions,
state governments; that’s the advantage of having a political person.
But when we go for negotiations, I am afraid this is an inter-governmental
agreement, these are agreements between states, not individuals.

AG:
But as you said some have done good. For example,
Medecins Sans Frontieres played a very crucial role in the South Africa
AIDS drugs case?

JR: Yes, there are some who have
done very good work, particularly on the AIDS issue. So, one has to
be a little careful. By and large, I have seen, they have not been a
force for positive change.

AG:
Again, coming back to the general discourse on
free trade, the discourse seems to be incomplete about the minuses or
the losses or the constituencies which will lose out and how they can
be compensated.

JR: Pardon my saying so, but over
the last fifty years having this argument has ended up with India losing
market share. India had 2.5% of world trade and now we are down to 0.6%.
India had such a share in the textile sector, look at what has happened
today. Countries with poorer resource endowments than India have ended
up with higher market shares. So you can keep arguing at a philosophical
level whether free trade immiserizes or makes countries prosper. But
the fact of the matter is that India, by following anti-export policies,
has lost out on global market share and therefore, lost out on employment.
A very telling illustration of this is if you compare India and China.
China’s export’s twenty years ago was only about two times that of India’s;
today they are five times that of India. So, the gap has increased tremendously.
And what is the Chinese export basket? Essentially, it’s a low-tech
export basket. It’s not ICs and software. And low-tech is what creates
blue-collared jobs for the masses. We must recognise that by losing
global market share we have lost domestic employment opportunities.

AG:
So would you suggest that we go through another
crisis situation, which might spur further trade liberalization?

JR: Unfortunately, we have become
victims of our own success because all the things that we did in 1991
was to prevent the external crisis from recurring. Today, we have a
low current account, a low short-term debt, no capital account convertibility
for domestic residents, high foreign exchange reserves of $ 45 billion,
you don’t have privatisation of the financial sector taking place at
a rapid rate, you discourage short-term speculative capital. So, all
the policies since 1991 to prevent the recurrence of the 1991-type crisis
have prevented India from becoming vulnerable externally and thereby,
denying to India a pressure point for change.

AG:
On the issue of sectoral impact, one would assume
that industry lobbies would try and influence government positions.
For example, the US Coalition of Service Industries or the Trans-Atlantic
Business Dialogue has been very strong in influencing their respective
government’s positions. How can India counter such influence? Are its
business lobbies doing enough?

JR: One of the things I used to
argue is that India has not done enough to build alliances with consumer
lobbies in the United States, who have a natural vested interest in
keeping the prices of medicines down. This is just an example. I take
your point. Networking is the name of the game right now and you have
to ultimately have a lobby. In fact, the Chinese have great lobbies.
14% of all Boeing sales are to China. That’s a huge plus point. I read
an estimate that 250,000 American jobs depend on trade with China. This
is what we should also be working towards. If we become important players
in the world economy, our sources of leverage will go up. Incidentally,
our sources of leverage will go up not just because of our exports but
also because of our imports.

AG:
In that sense, networking itself will have two
domains. One is the domestic domain, which might tend towards protectionism,
and then there’s the international domain, which might favour free trade.

JR: You have to straddle both worlds.
In India, one of the good things that has happened is that the consumer
lobby has got greater awareness and public prominence. So today, the
government automatically does not impose anti-dumping duties. For example,
in soda ash the domestic lobby is asking the government to impose AD
duties. But the government is saying that all the dhobis (washer men)
in the unorganized sector benefit from cheaper soda ash from Bulgaria
and Romania. Till 1991, I would say Indian industrial and trade policy
was exclusively producer-oriented. But today it involves a balancing
of interests. That is a good thing. Import of PVC hurts Reliance but
benefits millions of footwear manufacturers in the unorganized sector.
In the good old days, the government would have protected Reliance;
now it sees a trade-off.

AG:
Now, coming to a broader issue of strategy, as
to what we can do in the near future as well as in the longer term,
India has always tried to build the ‘South’ coalition�

JR: It’s dead. Because to talk of
developing countries is stupid. Every country wants to be a developed
country; everybody wants to do a deal with the United States, the Europeans
or the Japanese. So, we are chasing a mirage if we are looking at Like-Minded
Countries or G-77.

AG:
Two Oxford-based scholars, Ngaire Woods and Amrita
Narlikar, have highlighted the success of “niche diplomacy”. You mentioned
the Cairns Group earlier. So there seems to be a trade-off between niche,
sector-specific diplomacy and what I like to call “structural diplomacy”
whereby India tries to influence the broader structure of multilateral
institutions, making them more democratic, accountable and inclusive.

JR: In Singapore in 1996, India
and Malaysia were together, but the Malaysians just abandoned us and
signed the Information Technology Agreement because they were interested
in building that Putrajaya Information Superhighway. Both of us our
developing countries, G-77, and Like-Minded. But they abandoned us and
rightly so, because they looked at their national interest.

AG:
We failed to hold the G-10 coalition together
as well.

JR: India does not need a coalition
to make its point. India is an important country in its own right. And
we will be heard because we matter to the world. And the more we liberalise
and the more our economic potential gets unleashed, the more we will
matter. After all, we are the fourth largest economy in the world.

AG:
Earlier I was trying to put forth what India’s
official stance has been. Given what we have discussed, even right now
as we make these statements, or we get the Like-Minded Group of countries
to say something anti-new-Round, do you think that we are living in
a fool’s paradise?

JR: It is. We still think that there
exists a G-77 world, the Like-Minded, developing, the UNCTAD; they are
all remnants of a bygone era. As I said, we have to be pragmatic. We
have to be non-ideological, we have to be cold-blooded, and we have
to be pragmatic. And we must always have a back channel with the United
States. The Chinese have perfected this art of bad-mouthing the Americans
politically but in bed with them commercially. That’s what we should
be doing.

AG:
We’ve noticed that in SAFTA also where we are getting Chinese goods
from Nepal. SAFTA is more of a political statement to give economic
content to SAARC and to give a feeling of confidence to Sri Lanka and
Bangladesh. So, I don’t view this as some great economic initiative,
which is going to transform the economy. It is going to have a major
impact on Sri Lanka and Bangladesh, and to the extent that their economies
benefit, India benefits. I don’t hold out a great vision of SAFTA but
it is an important confidence-building measure in the regional context.

AG:
What would say to the suggestion that we should
have a customs union in South Asia instead?

JR: Well a customs union presupposes
a degree of political camaraderie, which does not exist in South Asia.
It presupposes a desire to have interlocking networks, of trade, culture,
politics, currency, media, sports, which does not exist here. I think
by and by these things will evolve.