The Telegraph
Since 1st March, 1999
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Taking another shot

India has warned World Trade Organization members that there may be a backlash in the developing countries if the economic reforms decisions being taken by the developed countries are ever perceived to be an imposition on the people of the developing nations. Such setbacks can derail the whole process of multilateral negotiations and bring discredit to the WTO.

The Indian disinvestment minister, Arun Shourie, had asked the WTO countries, at the three-day informal meeting of 24 trade ministers in Montreal, to “stick to the Doha development agenda and be cautious in moving forward”. The DDA is the only tool for the 145 WTO members to tackle sensitive issues like agriculture and trade-related aspects of intellectual property rights on public health between the poor and the industrialized members.

Shourie stressed the importance of agriculture as India’s key concern in the WTO negotiations. Referring to the proposed special products, which are of interest to the developing countries, he emphasized that these need to be combined with special safeguard measures with a suitable trigger mechanism, in terms of both import volume and price, in order to protect farmers’ interests.

Field work

The string of warnings being issued by the developing countries is the latest indication that there are many obstacles in the way of the effective and timely implementation of the DDA. These countries contend that the multilateral trade negotiations are going nowhere in view of the intractable stand maintained by the developed countries. The Cancun ministerial meet may end in another fiasco if things continue to move this way.

It is also strange that even though definite stances have not been taken by the member countries, a draft of the Cancun ministerial text is already under circulation. This may play a crucial role in the final decision-making.

On agriculture, which is the most important issue on the agenda of the developing countries, including India, the official report on the Nyon meeting of developing countries, says, “Agriculture is the make-or break issue for the successful conclusion of Doha round of (multilateral) trade negotiations.” However, much time has already passed without any major breakthrough which could set the tune for future trade liberalizations. The WTO members need to agree on this issue at the fifth WTO ministerial at Cancun.

Reviewing the WTO’s progress on the discussions on market access, export subsidies (competition) and domestic support to agriculture at the mini ministerial conferences held at Tokyo, Cairo and Montreal, it is apparent that the negotiations on agriculture lack the necessary compromises on several issues.

Problem areas

Though an agreement on the contentious issue of agricultural trade liberalization is likely to be struck between the European Union and the United States of America, potential benefits for India and other developing countries are yet to be ascertained. A compromise on agriculture has become a possibility after the EU, the biggest defender of farm subsidies, drew up an internal agreement on a moderate reduction of subsidies by its members. Even then, a US-EU pact on agriculture portends that member countries, especially the developing ones, will be pushed to a compromise on other DDA issues.

Some sensitive issues that have been included in the Cancun agenda are those of trade facilitation, government procurement, investment and competition policy and, perhaps the most controversial one, expansion of the WTO’s powers by negotiating treaties in new areas such as foreign investment. Even as India continues to argue that these issues should not be part of the DDA’s agenda for negotiation, there are chances that the developing countries will buckle under the pressure mounted on them by the developed ones.

A successful ministerial conference is important. Failure to end the stalemate will challenge the very legitimacy of the Doha round of trade negotiations. As a result, the credibility of the WTO may be at stake.

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