The wit who suggested a man should be judged by the enemies he makes will no doubt be confounded by the dilemma facing India’s articulate minister for law and commerce, Arun Jaitley. In the aftermath of the non-productive World Trade Organization summit in Cancun, Jaitley has become a national consensus. From the Confederation of Indian Industry which went gaga over his Cancun performance, to the Swadeshi Jagran Manch, the country’s leading body of economic xenophobes, Jaitley appears to have pleased everyone. The Jaitley Admiration Club now embraces the Bharatiya Janata Party, the Communist Party of India (Marxist) and even the permanently aggrieved NGO community. It only remains for the causerati diva, Arundhati Roy, to complete the litany of endorsements with a 10,000-word essay in The Guardian.
Actually, it’s the enemy’s-enemy-is-my-friend axiom that contributed to Jaitley’s popularity among those who would otherwise be denouncing his politics. To the fashionable post-Iraq counter-culture, there is nothing more endearing as incurring the displeasure of a seemingly arrogant Uncle Sam. With his sharp one-liners aimed at the United States of America and the European Union, Jaitley acquired the pop-hero status that in the Fifties was conferred on Jawaharlal Nehru’s irascible foreign minister, V.K. Krishna Menon. Like Menon, Jaitley had the ability to effectively counter the West’s condescension. However, unlike Menon, he also had the ability to not speak the language of victimhood. So when the US trade representative, Robert B. Zoellick, wrote disparagingly in the Financial Times of the “broader culture of protest that defined victory in terms of political acts rather than economic results”, he didn’t find many takers, not even in the nerve-centres of globalization.
For India, this was a landmark summit. Unlike the past, when it was wilfully obstructionist, opposed to the fundamentals of a rule-based trading system and consequently ended up horribly isolated, in Cancun India was seen to be pushing the free-trade agenda further. Conversely, it was the US and the EU that ended up as champions of pampered agricultural lobbies. Zoellick’s resolute fight to maintain the $ 4 billion subsidy doled out to 25,000 cotton-growers may be rewarding for President George W. Bush in an election year, but viewed against his callous disregard for the basic livelihood of 10 million people in Burkina Faso, Mali, Chad and Benin, Pax Americana lost some of its moral sheen. The last-minute walkout by some African countries which prevented a final agreement was understood to have been stage-managed by the US to prevent WTO’s balance of power tilting southwards.
The mechanics of the crowd invasion that brought the deliberations to an abrupt end is instructive. In the aftermath of Cancun, there is much heady rhetoric about India once again emerging as a leader of the developing world and crafting alliances that endure. The temptation of chasing the mirage of a non-aligned movement within the WTO must be resisted. The fact remains that it was the so-called least developed African countries that prevented India and Brazil from securing an outright victory and the draw suited the US, if not the EU. Now, with the US and the EU proclaiming their intention of entering into bilateral arrangements with the “can-do” countries and leaving the so-called “won’t-do” nations high and dry, it would be interesting to see how many of these African countries fall prey to strategic inducements.
There are strong — but not necessarily overriding — political compulsions behind the $ 17 billion farm subsidies in the US and the $ 40 billion or so spent on the EU’s common agricultural policy. Cancun saw the first organized assault on these impediments to free trade. Sooner rather than later, the protectionist walls will crumble but not before the EU in particular puts up a dogged, no-holds-barred fight. India has to be prepared for that eventuality by forging its own strategic alliances, if necessary with the US.
However, before the sturdy kisan from Punjab is encouraged to taken on some French Poujadist, it would be prudent to remember that the faultlines are neither geographical nor cultural. The failure to secure an agreement in Cancun riled many powerful interests in the West. These include bankers, manufacturers and service providers — those who see the rustic hillbilly as quaint “items of living heritage”. “Wouldn’t it be better, aesthetically and environmentally,” asked an editorial in The Spectator, “to allow prairie fields to return to the oak forests they once were'” The Wall Street Journal cited a recent International Monetary Fund study suggesting a $ 100 billion growth in global trade if protection in agriculture is ended. In the battle to get Indian agricultural produce better access to global markets, world capitalism is not on the side of Alabama’s cotton-growers.
Unfortunately, neither are they on the side of the subsistence farmer from Midnapore whose labour is exemplary but whose holdings are uneconomic and who is ultimately subsidized by the state. Had a final agreement been hammered out in Cancun, Jaitley would have secured a defensive shield for Indian agriculture, but it would have been an enabling provision. The very same people who have lauded him as a hero would have denounced him as a lackey of the West and he would have had to fall back on the non-voting classes in the CII for support.
The sheer alarmist din would have cost the BJP dearly in the forthcoming state assembly elections and there would have been an orchestrated clamour to withdraw from the WTO. If a small cut in urea subsidy can force the finance minister to eat humble pie, imagine the outcry if agricultural tariffs are scaled down, albeit in slow motion. The Rs 800 crore free power sop to farmers from the chief minister of Madhya Pradesh, Digvijay Singh, is just the latest example of India doing at home what it denounced in Cancun.
In the euphoria over settling scores with an utterly self-centred and manipulative West, India has chosen to ignore a home truth. The political will to make agriculture competitive does not exist in either Washington and Brussels or New Delhi. Not only that, competitiveness involves discarding archaic notions of land reforms and land ceilings. It involves accepting the challenges of capitalist agriculture throu- ghout the country and not merely in the Green Revolution belt. Is India ready to put the enterprising kulak on a pedestal, above the doughty and politically decisive kisan'
These are questions the political class can no longer shy away from. After Cancun, the pressure on the US and EU to scale down the privileges to farmers is certain to grow. As it becomes more apparent that agricultural subsidies are an unacceptable impediment to global trade, the pressure to discard them will become irresistible. Farmers, after all, do not constitute a meaningful voting bloc in either the US or the EU. The moral high ground India occupied in Cancun was dictated by Western hypocrisy. But sanctimoniousness will turn to cussedness once the developed countries combine the generous offer of fair practices in agriculture with hard-nosed insistence of the Singapore proposals on investment, competition, efficiency and transparency.
Since the establishment of the WTO a decade ago, India has viewed the multilateral body with a wariness bordering on conspiracy and fear. In Cancun, it broke ground and chose negotiations and engagement over grandstanding and retreat. It was even prepared to accept two of the Singapore proposals in return for progress on agriculture. This change had as much to do with Jaitley’s personality as the growing self-confidence of Indian capitalism. A combination of enlightened nationalism and economic liberalism made India relevant at Cancun. A failure to digest the formula at home can make it irrelevant again.