Preparing for Doha

By C. Rammanohar Reddy

THE FOURTH ministerial meeting of the World Trade Organisation - the first since the Seattle conference of 1999 - will take place in Doha, Qatar, in November. However, the shape of the agenda and more crucially whether or not a new round of trade negotiations are to be launched at the WTO will not be decided at Doha but before that. The decision is almost surely to be taken over the course of the next two months in Geneva and in the capitals of the more powerful members of the WTO.

For the Indian political establishment, the timing of the Doha meeting could not have come at a more difficult time. Agriculture is reeling under the impact of falling prices, rightly or wrongly attributed to the WTO. The fears in agriculture and industry about what will follow the removal of the quantitative restrictions (QRs) are still there even if there has been no immediate flood of imports in the two months since they were removed. And the continuing sluggishness in the demand for locally manufactured industrial products - in small, medium and large industry - is perceived as the direct outcome of years of import liberalisation now capped by cheap Chinese imports, a process that is again seen as WTO- driven.

Yet, there are not many signs that India is prepared with alliances, negotiating strategies and compromises for dealing with the pressures for a new round of trade negotiations at the WTO which on paper at least could be as wide-ranging as the Uruguay Round of Multilateral Trade Negotiations between 1986 and 1993. India's approach so far has been that the WTO already has on its table a large and packed negotiating agenda. There is the developing country agenda for a more meaningful implementation of the Uruguay Round agreement and redress of imbalances in that agreement. There is the ``built-in'' agenda of further negotiations on services and agriculture which has already been taken up. And there is the ongoing review of the agreement on the Trade-related aspects of Intellectual Property Rights (TRIPS) and the work programme of studying the links between investment and trade and between competition policies and trade. This approach has worked so far. Indeed, India can take most of the credit for placing the ``implementation'' issues on the table and for building an alliance of many of the developing countries that has been able to successfully ward off pressures over the past three years to launch a new round. But will this work in 2001 as well?

In a sense, many of the divisions among the members of the WTO remain as wide as they were two years ago at Seattle. For instance, the differences within the advanced country bloc about farm subsidies have not been narrowed. The developing countries on their part are as opposed as they were in the past to bringing labour (the ``social clause'') and environment into the WTO. Similarly, whether it is in implementation issues or proposals for new talks on investment and competition policies the gaps have not been bridged. However, while such divisions were the cause of the collapse of the Seattle ministerial conference, what was missing then but is beginning to surface now is a political commitment among the leading trade powers for a new round.

In recent weeks, one after another, a number of groupings have asserted their commitment to a new round and want it to be launched at Doha. The ministerial meeting last month of the Organisation for Economic Cooperation and Development witnessed the issue of a communique that called for the launch of a new round of trade talks at the WTO. A similar communique was issued at the meeting in Shanghai earlier this week of the Asia Pacific Economic Cooperation group where even China, which is yet to become a member of the WTO, has joined the chorus on a new round. In addition to the E.U. which ever since the 1996 Singapore ministerial meeting of the WTO has been lobbying for a new round, Japan too has now become an enthusiastic campaigner. The most important difference between 1999 and 2001 is, however, that while Mr. Bill Clinton tried then to ride the two horses of trade liberalisation and protectionism, Mr. George Bush is a far more aggressive proponent of liberalisation and unwilling to listen to either the U.S. trade unions or NGOs on slowing down the WTO or trade bloc process.The major trade powers do not fully agree on what should and should not be on the negotiating agenda. But what they do agree on is the need for a new round, which spells trouble for India and a few other developing countries which remain opposed to further liberalisation even before the outcome of the Uruguay Round has been ``digested''. The danger now is that with the ``elephants'' in the multilateral trading system coming together the ``ants'' are likely to scatter. There are already signs of that happening. A number of South American countries are becoming restless about the developing country focus on the implementation issue. The Least Developed Countries on their part are being wooed with promises of a preferential and zero tariff regime if they sign up for fresh WTO negotiations. That leaves India and Pakistan, with Malaysia, Egypt and Cuba, as the only consistent demandeurs of a correction in the existing regime before the launch of a new round.

If this is the scenario that is now unfolding, it is possible that India and a few of the large developing countries could find themselves in a corner and forced to agree to the agenda for a new trade round - with some sops as sweeteners. This in essence will not be very different from Punta del Este in 1986 when the Uruguay Round was launched. But the difference between Punta del Este and Doha is that after the experience of the past six years the Indian public is far more agitated and sceptical about the benefits of WTO-driven trade liberalisation. The Indian officials and negotiators have so far been able to hold the line, but what is needed now is intervention at the highest political level, at home and abroad. Without informed debate about the options that India has and a measure of consensus about what the country wants from the WTO and what it is willing to give up in exchange, the officials will negotiate with their hands tied behind their back and without any brief other than to say ``no''. Last month's conference of the Chief Ministers can only have been a beginning.

There are many in agriculture, industry and citizen's groups who need to be informed and consulted about what lies ahead. Unfortunately, even within the Government there is at times no unanimity. For instance, the Ministry of External Affairs (and earlier sections in the Prime Minister's Office as well) in its anxiety to move ever closer to the U.S. on all matters has been and will be more than willing to go along with whatever the U.S. wants at the WTO. Internationally too, a political commitment by India to building lasting alliances at the WTO has been absent.

A valuable opportunity was lost at the recent G-15 summit in Jakarta to articulate a common and workable position on behalf of the developing countries. The summit has come and gone but that does not mean that India and like-minded developing countries cannot in the weeks ahead engage in the same high-level political activity that the advanced countries have been indulging in over the past few months on a new WTO round.

There is a different kind of scenario that may well unfold between now and Doha. The differences among the advanced countries will not be narrowed in the ongoing negotiations in Geneva. The developing countries will hold firm and pressure from the non-governmental organisations in the South and North will once again prevent the launch of a new round. That may happen but only may. India and other developing countries cannot bank on such an outcome.

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