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TRADING PLACES
- India helped to keep developing nations together at Cancun

The large function hall of the Mediterranean style Cancun hotel was filled to capacity. If a vote had been taken among the non-governmental organizations present there to choose the most popular commerce minister attending the World Trade Organization meeting in Mexico last week, there would have been no doubt about the outcome. Arun Jaitley easily stood out among his WTO colleagues at the five-day meeting, which is now being hailed as a landmark in global politics in the new millennium.

The most impressive moment in the approximately 90-minute interaction between Jaitley and NGOs from all over the world who had travelled to Cancun to watch over the trade proceedings came when a representative of Action Aid from Pakistan stood up to speak.

He congratulated India for what it has been doing at the WTO headquarters in Geneva in the nearly two-year period since the trade body adopted what is known as the Doha development agenda. India, the Pakistani said, represented the hopes of millions of people in the world who had lost their future and their voice because of distortions in the global trading system. For Jaitley, the compliment did not come as a surprise. Throughout his week-long stay in Cancun, Pakistanis have been privately telling him of their pride in what India has been doing.

In India, Jaitley has been hailed during and since the Cancun meeting for being an effective spokesman for developing countries. Actually, such a label does disservice to the contribution made by India’s commerce minister to the fifth ministerial meeting of the WTO.

At one point during the ministerial deliberations, the European trade commissioner, Pascal Lamy, told the meeting that Europe had not made any commitment in Doha to significantly reduce or eliminate domestic support and export subsidies for its agriculture. Jaitley opened his folder, took out a document and merely read out a sentence from it. The sentence was a quote from Lamy in Doha which committed Europe to reduction and eventual elimination of subsidies and support “without pre-judging the outcome of any talks” in this regard.

For once, the often-abrasive, often-angry, but always aggressive, Lamy was at a loss for words. What India — and other similarly placed countries — today need in the WTO in order to claim their space is more interlocutors like Jaitley.

The rich countries made a grave miscalculation in Cancun. Just as they isolated India in Doha in 2001 and left Jaitley’s predecessor, Murasoli Maran, holding the can for the third world, they thought they could divide the group of 21 developing states and have their way in the last days of the conference.

The Americans, at least, came prepared for that scenario. They signed a free trade agreement with Chile although Chile, as a member of the United Nations security council, had honourably refused to go along with the United States of America on Iraq. They held up the FTA they recently signed with Singapore as a model for others and dangled the FTA carrot in front of other developing countries.

But because of a combination of factors, some fortuitous, some incidental, the unity among the developing countries held through the weekend. That does not mean this unity will remain as Europe, the US, Japan and other rich states pick off developing countries one by one through a combination of threats, blandishments and quid pro quos. It is common sense to assume that the “victory” of the third world in Cancun is no more than pyrrhic. Which is why ministers like Jaitley are needed. Lamy said in his final press conference in Cancun that the WTO is a “medieval” organization. “The procedures, the rules of this organization cannot support the weight of its task.” Implicit in this is the threat to refashion the WTO somewhat in the image of the UN with its security council composition of permanent members and less equal non-permanent ones.

Jagdish Bhagwati, the eminent India-born professor at Columbia University, said in the run-up to Cancun that “developing countries are scared out of their wits now because they don’t understand what they are being asked to sign” in WTO. “The agreements are going way outside trade issues and involve a helluva lot of things like your access to oil, your access to intellectual property and capital controls.” Bhagwati was quoted in the latest issue of the US’s leading liberal magazine, The Nation, as comparing the new agreements which developing nations are being asked to sign to the fine print in insurance policies in the US. “I couldn’t make anything out of it and I’m a reasonably informed person, a pretty smart economist as they go.”

Compounding the woes of poor countries like Mali, Benin or Chad, which are being forced to sign such agreements, are hordes of corporate lawyers hired by multinational corporations to enforce the consequences of such agreements.

Does anyone in India pause to think what may have happened to Indo-US relations if Enron had not gone bankrupt and good old “Kenny boy” had not overnight become “Mr Lay” for the White House in the wake of the exposure of Enron’s shenanigans' Which is why men like Jaitley now have a destiny to fulfil. Lamy may have had his way with many ministers in Cancun when he barefacedly asserted that he had made no commitment in Doha to reduce subsidies or to eliminate them. But not with Jaitley, who is also one of India’s leading lawyers.

But in the WTO, being a lawyer is not just enough — not even if you are a smart one. In the run-up to Cancun, Jaitley spent week after week studying papers from commerce ministry archives about the history of India’s negotiations in the general agreement on tariffs and trade, the predecessor to the WTO. He has also gone through India’s positions in the WTO with a fine toothcomb. On the penultimate day of the Cancun meeting, Pierre Pettigrew, Canada’s trade minister, who chaired the WTO’s working group on the so-called Singapore issues such as transparency in government procurement and investment, phoned Jaitley.

“Arun”, Pettigrew said, “help me out, I have a difficult job.” Because Jaitley was by then so thorough with WTO issues, he told Pettigrew that his was the easiest job at the conference. He recalled that in Doha it was agreed that in order to start talks on the Singapore issues, a “decision (would have to be taken) by explicit consensus in Cancun”.

By then, 16 countries, including India, had written to conference managers in Cancun that they were opposed to any negotiations on the Singapore issues. Jaitley told Pettigrew that all he had to do was to send a one-line report back to the chairman of the ministerial meeting, the Mexican foreign minister, Luis Ernesto Derbez, that there was no consensus, explicit or otherwise.

Those familiar with the archival material that Jaitley has gone through have told this columnist that an amazing aspect of those papers is the total absence of any ministerial role in decision-making relating to trade since the time Pranab Mukherjee was commerce minister until Murasoli Maran took the job.

It should make every Indian think about what kind of representative democracy we are running when decisions affecting future generations on economic matters have been left entirely to bureaucrats. Compounding this lack of accountability are stories from veteran international trade officials about how some Judases among Indian negotiators sold out for the biblical 30 pieces of silver in Punta del Este during the Uruguay Round of ministerial talks that led to the creation of the WTO.

Because Jaitley has grasped the complex issues in the WTO more than any of his predecessors since Pranab Mukherjee, he also has a realistic view of what is possible. India was under tremendous pressure in Cancun to become a “leader” of the third world. Indeed, India was erroneously portrayed as such in much of the Indian media.

There was constant pressure on Jaitley to enlarge the agenda of the group of 21 countries which took a firm position on agriculture. It is a measure of the maturity of reformist India that Jaitley resisted all such pressure. It was a different story from Bandung where Jawaharlal Nehru took the lead in 1955 in rallying forces against the West. Or at the UN general assembly in 1975 when Indira Gandhi decided that India would cast its vote in favour of a resolution equating Zionism with racism.

India’s insistence in Cancun that there is no grand alliance of the third world, but only issue-based agreements among delegations is as significant as Jaitley’s efforts last week to hold together the group of 22 in the face of disinformation, cheque-book diplomacy and crude threats by rich nations.

It is also a measure of the effectiveness of the strategy that Jaitley pursued in Cancun that no one at any stage challenged the morality or the fairness of the stand taken by India and other developing countries — not Lamy, not the US trade representative, Robert Zoellick, and certainly not the WTO chief, Supachai Panitchpakdi, who actually intervened in the proceedings at one stage on behalf of the extremely poor cotton-growing African states ravaged by subsidies for cotton farmers in George W. Bush’s home state of Texas.

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