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The
biannual meeting of trade ministers of the WTO member countries held at
Doha is over. The WTO will launch a new round of global trade negotiations.
This round is to be completed by January 1, 2005. As far as India is concerned,
there are five major benefits to be had from the broad negotiating agenda
agreed upon. How much we will actually gain, of course, depends on the
negotiations themselves and, more importantly, on domestic policy reforms.
# The protectionist anti-dumping laws and rules which Europe and America
use liberally to stop imports from developing countries are to be liberalised;
# Europe, Japan and America are to phase out their huge farm subsidies;
# In case of an emergency involving public health, the interests of consumers
could override the patent rights of pharmaceutical companies;
# America and Europe will reduce the duties they levy on imports of textiles
and other labour-intensive manufactured goods from developing countries;
# Movement of skilled manpower from developing countries to rich countries
will be facilitated further.
The
main setback to India is that the linkage between environment and trade
figures explicitly in the negotiating agenda, although negotiations are
to begin after two years and only with the explicit consent of all WTO
members.
Union Commerce Minister Murasoli Maran is claiming victory. His trumpeting
makes for smart politics at home but the reality is that the outcome is
contrary to his shrill pre-Doha rhetoric and his stance at the conference.
India was isolated at Doha with all developing countries deserting it.
The Americans were completely exasperated with us. India lobbied for the
wrong issues. For instance, it sought faster dismantling of the textile
import quotas by the developed countries, which would not serve India's
interests given our domestic policy distortions. On patents, Brazil and
South Africa achieved the breakthrough and on agriculture, it was pressure
from countries like Australia, New Zealand and Canada, with support from
the US, that persuaded the Europeans to come around. India's opposition
to transparency in government procurement, a global competition law and
simplification of customs procedures was simply unjustified. Its harping
on "implementation issues" though justifiable to some extent,
was overdone, unrealistic and, at times, misleading.
However, Maran should not be criticised too much. He was, after all,
reflecting a solid domestic consensus with Indian industry, media and
political parties supporting him in his aggressively confrontationist
posture before and at Doha. But it is now time to look ahead and prepare
ourselves for the difficult task of actual negotiations that lie ahead.
First, our negotiating style has to change. Whatever case we may have
is lost because of this style and approach. The Brazilians are also tough
like us but not as disliked as we are.
Then, the Government needs to appoint a high-level political personality
to function as a minister for WTO affairs exclusively and that person
must not be disturbed till the negotiations are over. This is a public
and proactive role that cannot be played by a bureaucrat. Moreover, the
commerce minister has other equally important responsibilities to be able
to do justice to the demanding WTO assignment.
We also need to put in place a genuinely multi-disciplinary team of
sectoral experts, economists, trade administrators and lawyers who will
provide sustained intellectual support to both the strategy and specifics
of India's negotiations. There are a number of Indian experts like Jagdish
Bhagwati, T.N. Srinivasan, Arvind Panagariya, Aaditya Mattoo, Arvind Subramanian,
Ashok Gulati, Hardeep Puri and Jayashree Watal working abroad who are
consulted by all but by their home country. Stronger research capabilities
in trade policy and law also need to be built up.
While we negotiate in the WTO in Geneva, we must keep bilateral windows
open and humming, especially with the US. That bilateral window has been
damaged in recent weeks by India's provocative approach in the run-up
to and at Doha. Bilateral channels at both the official and non-official
levels need to be established.
Finally, we must realise that Indian tariffs are now the highest in
the world and they dilute our bargaining advantage. We must also ensure
that domestic legislation is in place soon in areas like competition policy,
government procurement, biodiversity protection, patents, etc. On contentious
issues like environment, investment, competition and labour standards,
we need to think more positively on what constructive position we can
take without jeopardising national interests.
(The author is with the Congress party. These
are his personal views)
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