The Doha round of global trade negotiations launched amidst much fanfare
in November 2001 when the last WTO Ministerial Meeting took place in
Qatar is stalled. Trade and commerce ministers from over 140 countries
will meet at Cancun in Mexico in September to review progress and see
how the negotiations can be speeded up and brought to a satisfactory
conclusion in the time frame that had been originally planned.

At Doha, India stood in splendid isolation. It presented the spectacle
of a country yearning to be a leader but desperate for followers and
supporters. France amongst the developed countries behaved like India
resisting till the very last minute all attempts to broker an agreement
to eliminate the huge subsidies that European countries provide to their
farmers who constitute no more than 3-5% of their population. The then-Commerce
Minister Murasoli Maran went to Doha fortified by an all-party consensus
to indulge in needlessly aggressive confrontation and indulge in collective
suicide. He was felicitated by all in this country and he awarded himself
a gold medal for his performance-a performance that actually cost India
many friends.

India has a measly 0.6% or thereabouts share of world trade. But the
noise it makes in international forums is disproportionate to this share..
Countries that are critical of the WTO in public always keep a bilateral
window of compromise open with countries like the USA and Europe. India,
on the other hand, takes its public posturing far too seriously and
has been unable to establish quiet, non-formal, back-channel mechanisms
to resolve disputes and extract what it wants from its major trading
partners. We also take positions not always in the national interest.
For example, India was the leader in getting the quota for textile imports
by developed countries to be eliminated by January 1, 2005. Other countries
will gain because our policies are just not oriented to making the Indian
textile industry domestically productive and globally competitive. If
we do not make these changes now, we will lose whatever market share
the quotas gave us to countries like China.

Part of the problem is that no government in India has seen it fit to
launch a massive campaign for public education and awareness on WTO-related
issues. On December 11 2002, China celebrated the first anniversary
of its entry into the WTO in grand fashion-and it has had to make huge
concessions to enter, concessions that India has not had to make since
it was a founder member of GATT in 1948. On that very same day, New
Delhi hosted a major international seminar on the dangers of globalisation.
That is the difference. The Chinese exploit the numerous opportunities
that globalisation offers while India keeps harping on the avoidance
of the risks associated with globalisation. We do not realise that the
constraints to greater exports from India lie not in external constraints
but in our own policies at home. Twenty years ago, China’s exports were
twice that of India’s. Today, they are six times greater. That is entirely
because of government policies and nothing to do with the WTO.

Not many people in this country are aware that there is a dispute settlement
system in the WTO. This is at the heart of the WTO and sets it apart
from the earlier GATT. Countries like the USA and the European Union
have brought cases against us and won these cases like in pharmaceutical
patents. India too has complained against the US and Europe and it too
has won its fair share of disputes in areas like textiles.

It is in India’s interests that the USA, Europe and Japan remove the
huge trade-distorting agricultural subsidies they provide to their farmers.
But our moral and political case for championing this cause is eroded
when we keep increasing import duties on agricultural commodities ourselves.
Today, the average import duty for farm products exceeds 65%. As for
removing subsidies, we are not being called upon by the WTO to reduce
them. Alone among developing countries, India has had a negative subsidy
on agriculture to the tune of something like (-)35% of the value of
production. The limit prescribed for developing countries is 10%. The
reason why our subsidy is negative is simply that output prices in general
have been lower than corresponding international prices. In fact, one
argument could well be that Indian farmers will agree to the removal
of subsidies if they are given global prices for their output. But this
is not always feasible since the consumer angle has also to be kept
in mind.

We have to seriously review agricultural subsidies not because the WTO
is forcing us to do so (which it is not) but because of our own bankruptcy.
The rate of growth of public expenditure on subsidies has been over
three times the rate of growth of public expenditure on investment.
What Indian agriculture requires most today is public investment in
irrigation, roads, markets, research, extension, power and post-harvest
technology. But such investments are simply not forthcoming because
most of the resources are devoted to subsidies. As far as food security
is concerned, the WTO is not asking us to dismantle the public distribution
system. We ourselves have to ask whether the Rs 28,000 crore we are
spending every year on the public distribution system is, in fact, achieving
its objective. It is not particularly in northern ad eastern India.

On intellectual property, India has necessarily to introduce product
patents for pharmaceuticals by January 1, 2005. This will help our own
drug industry make the transition from being mere copy-cats to being
research-driven enterprises. Countries like Brazil, Argentina ad Israel
all have WTO-compatible intellectual property protection legislation
while retaining the right for sovereign action during public health
crises and emergencies.

Liberalisation of trade in services which is very much part of the Doha
agenda is of great interest to India since this in an area where we
are globally competitive. In recent years, there has been an increase
in protectionist sentiment in the western countries. Restrictions on
the movement of technical personnel from India are also increasingly
in evidence. But through bilateral agreements with crucial countries
like the USA, it is possible to overcome such barriers. In fact, even
as we negotiate in the WTO, we must explore bilateral free trade arrangements
with the USA and Europe as well in areas of critical importance to us.
It will bring many advantages in terms of market access. We will, of
course, have to resist pressure on linking environment and labour standards
to trade. But this is not an insurmountable obstacle.

Finally, WTO is as much about trade as it is about trade law. But we
have yet to build up expertise in this area even though we have had
two distinguished lawyers-P. Chidambaram and Arun Jaitley-as commerce
ministers. This needs to be attended to in law schools first. Domestic
legislation to take full advantage of the WTO also needs to be put in
place in a comprehensive manner. The Chinese have used to WTO to drive
fundamental and far-reaching internal reforms. On the other hand, we
still look upon the WTO as an evil devil.