Preparing for Doha

WITH PREPARATIONS FOR the Doha ministerial conference of the World Trade Organisation in November still deadlocked over the issues to be taken up for negotiation, the first warning about India's position has come from Mr. Robert Zoellick, the U.S. Trade Representative. During Mr. Zoellick's visit, the U.S. announced the restoration of zero-tariff access to 42 products though important products like pharmaceuticals will continue to be denied this benefit which was withdrawn some years ago; but the more significant event was the USTR's public warning to India that it will be left behind if it does not endorse the launch of a new round of trade liberalisation negotiations at Doha. More admonishments and entreaties can be expected over the next few months as countries engage in intense negotiations to reach a consensus decision at the WTO. However, Mr. Zoellick's visit should catalyse discussions on what India's negotiating position should be and how far it is willing to take its position, whatever the dire warnings about ``isolation''.

It is a fact that a growing number of developed and developing countries favour a new WTO round. But it is also a fact that most of them continue to strongly disagree about the agenda for such a round and countries have not budged very much from the positions that they had taken at the failed ministerial conference in Seattle in 1999. While there is much talk about beginning a new round, what is important is what the agenda for the round will be. The Indian position is that while it is against an enlarged and comprehensive round at the WTO, it will engage in talks on issues such as services and agriculture as well as a review of TRIPS, all of which had been identified earlier for negotiation. An additional factor is the Indian argument that the ``implementation issues'', the concerns about shortcomings in the existing WTO agreements, should be dealt with first before beginning a new round. There is considerable merit in this particular argument since all the WTO members had decided in May 2000 that the implementation issues would be settled before the Doha ministerial meeting. But what complicates matters is the conflicting demands of many countries to balance the proposed liberalisation of agriculture trade with the addition of more issues to the agenda. India and a number of other developing countries are caught in the middle of this impasse, between the U.S. and the agricultural exporting nations on one side and the agricultural protectionists such as the European Union and Japan on the other. Both groups are more than willing to postpone a final resolution on the implementation issues to a future date.

India is therefore placed in an unenviable position even if its stand is morally defensible. To make matters more difficult, the domestic political opinion is so hostile to the WTO - at times on exaggerated grounds - that it will be political suicide for the Government to extend support for an ambitious round that includes talks on a foreign investment treaty. Some economists have suggested that India extend its support for a new round by suggesting an agenda that includes negotiations on lowering industrial tariffs and implementation issues, besides the existing built-in agenda. The problem with such a proposal is that it will satisfy no one at the WTO as it will be seen as too narrow and at the same time it postpones a decision on the implementation issues to a future indeterminate date. But, with time running out, India needs to put together an alternative set of proposals which, if the situation arises, could win the support of a substantially large number of countries and will counter the pressures of the U.S. and the E.U. The Government is continuing with its efforts to build and maintain a developing country alliance. But, as past events have shown, this can come apart at the last minute. The Government should not be caught in a position in Doha where it has to sign on the dotted line because in the end it finds itself alone.

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