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VIEWPOINT: KAUTILYA
As Usual, India Is An Outlier
The WTO summit in Qatar is just three months but India
is
ill-prepared
By Jairam Ramesh
The Fourth Ministerial Meeting of the WTO is being held in
Qatar from November 9 to13 this year. The main agenda item is bound to
be the launch of a new round of global trade negotiations. India is the
only major country to have publicly opposed a new round. Privately, we
may well tell US Trade Representative Robert Zoellick when he visits Delhi
shortly that India will ultimately come on board. But this two-faced approach
does India no good. What is also ironic is that while we express opposition,
much of the cutting-edge work on the WTO is being done by Indian scholars
like Jagdish Bhagwati, T.N. Srinivasan, Ashok Gulati, Arvind Panagariya,
Arvind Subramanian, Aaditya Mattoo and Jayashree Watal.
 First,
all important countries have come out in support of a new round. On July
16, 2001, in an unprecedented move, Zoellick and Pascal Lamy, his EU counterpart,
wrote a joint article in The Washington Post arguing strongly for a new
round. This is significant because the US and the EU have been engaged
in a number of trade disputes. Earlier, on July 4, Chinese vice-minister
of foreign trade had unequivocally stated that China (which is likely
to join the WTO at Doha) supports a new round. Latin American and east
Asian countries have also expressed their support.
Second, India has stated that its main concern
is the implementation of the commitments made during the earlier Uruguay
Round. Assuming that our position is legitimate, the question is how best
it is addressed. Discussions have commenced in the WTO on agriculture
and services. The review of the agreement on trade-related aspects of
intellectual property rights (TRIPs) has also started. These discussions
will meander along. But if these issues are taken up as part of a new
round-and a round is a politically mandated, intensive period of negotiations
on a basket of issues which involve give and take-then the chances of
reaching a resolution are significantly enhanced. That single-subject
negotiations do not offer scope for bargaining is borne out by the Information
Technology Agreement in which India did not participate to begin with
but had to finally accept without any quid pro quo.
Third, although it does not form part of the
"built in" Uruguay Round agenda for review, we have a great
interest in bringing the issue of industrial tariffs to the negotiating
table. The general perception is that with their tariffs averaging 3-5
per cent, more cannot be extracted from the developed countries on this
score. This is wrong and in areas like textiles, plastics, leather, footwear
and fisheries, tariffs of 5-35 per cent still persist. To be sure, domestic
policies constrain India's emergence as a global leader in labour-intensive
mass manufacturing but high tariffs in importing countries could emerge
as a bottleneck.
Fourth, India has rightly raised its voice against
growing protectionism in the West. India has also stood for the strengthening
of the multilateral process. But of late bilateral and regional trading
agreements have proliferated. In the memorable words of Bhagwati, regional
trade blocs are not building blocks of free trade worldwide, rather stumbling
blocks. Only the launch of a new global round can curb the growth of protectionism
and push the process of globalisation of preferential tariffs.
Fifth, a new round is inevitable. The exact
agenda has yet to be worked out and undoubtedly the process of finalising
it will prove acrimonious. India's interest is best served by its being
in a position to influence the agenda, if not actually determine it. That
position of being able to influence the agenda to reflect our concerns
will accrue to us only if we take a proactive approach of support to the
very idea of a new round.
On the substance of the new round, India should
take a broad three-track approach fully realising that the WTO is as much
about trade as it is about trade law-which means the involvement of not
just civil servants and economists but also of lawyers. Track-I would
be issues on which we want to see negotiations and commitments quickly.
These include agriculture, services, industrial tariffs, anti-dumping,
TRIPs, e-commerce and globalisation of preferential tariffs. Track-II
would be issues that we are prepared to discuss, where we need to bring
forward domestic legislation but where negotiations and commitments need
to be made later. These are investment, procurement and competition policy.
Track-III would be issues that we reject for linkage with trade negotiations
but on which we are prepared to talk in the appropriate forums. Labour
standards are best dealt with in the International Labour Organisation.
There is already a Committee on Trade and Environment in the WTO and our
position should be one of no negotiations but a commitment to implement
our own environmental standards and regulations strictly.
(The author is with the Congress party. These
are his personal views.)
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