Unity on WTO issues

THE COMMON POSITION that the South Asian Association for Regional Co-operation has decided to take on the issues that will be deliberated at the Doha ministerial conference of the World Trade Organisation in November signals to the global community that a consensus on the agenda for future negotiations cannot be reached without taking into consideration the views of the countries in the region. In the face of mounting pressure to agree to the launch of a new round of trade liberalisation negotiations, SAARC has made it clear that its members' concerns on imbalances in the existing WTO agreements should be addressed up front before widening the agenda for negotiations, as demanded by a number of countries led by the U.S. and the European Union. The SAARC communique also emphasises the need to stick for now to the already mandated negotiations and reviews. The position taken by SAARC should be a source of encouragement to other developing countries that a larger united position is possible at the WTO. The SAARC bloc accounts for less than one per cent of world trade and there is therefore a tendency to dismiss its position as being of no real consequence at the WTO. But the influence that SAARC and the developing countries as a whole do not have by way of a large share in world trade they make up for in their number in the consensus-driven WTO. With less than three months to go for the Doha meeting, the developing countries still hold the key, for, while most of the advanced economies and a fair number of South American and East Asian countries have agreed to the launch of a new round they remain deeply divided about the agenda for negotiations. Endorsement from the Third World is therefore crucial for a consensus decision.

Much will ultimately depend on the steadfastness of the Indian position since it is India which has largely been responsible for crafting the agenda on ``implementation issues'', around which an alliance of many developing countries in Asia, Africa and South America has been built. Any doubts on where India stands should finally be set at rest by the speech last week of the Prime Minister, Mr. Atal Behari Vajpayee, in which the Indian opposition to a new round in the present conditions was reiterated. This should end the voices from within the Government which have raised the bogey of isolation at the WTO and expressed the view that India should give up its opposition and agree to a compromise agenda that would be more accommodative of U.S. interests. The Prime Minister has at the same time indicated flexibility by stating that India has an open mind on all trade matters but not on non-trade issues such as labour and environment. This raises the possibility that if there is some movement forward on the implementation concerns, India could agree to the launch of a new round provided the agenda is restricted to additional issues such as industrial tariffs and trade facilitation. A concrete alternative formulation of this kind may be necessary in case the bloc of developing countries now opposed to a new round begins to break up on the eve of the Doha meeting. A failure to have a contingency plan carries with it the risk of true isolation at Doha.

In this critical period, turf battles within the Government can be disastrous since the major trading powers will be able to play on such divisions. Unfortunately, the past year has seen a tussle between the Commerce Ministry, the traditional administrative arm for trade policy, and the Ministry of External Affairs, first about the appointment of a new Ambassador to the Indian Mission at the WTO and then about the Indian stand on a new round. Now that Mr. Vajpayee has publicly made clear the Indian position on a new WTO round, a position which has been articulated by the Commerce Ministry, there can no longer be any ambiguity about where India stands at the WTO.

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