The Hindu : WTO: Dust on the road to Cancun

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Wednesday, Mar 05, 2003

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WTO: Dust on the road to Cancun

By Sushma Ramachandran

For developing countries, the Tokyo conference proved a good opportunity to gauge the extent to which the U.S. and the E.U. will push forward for acceptance of their respective proposals.

THE RECENT mini-ministerial conference of the World Trade Organisation in Tokyo not only failed to clear the air but probably raised more dust than expected in the run-up to the full fledged WTO ministerial conference at Cancun in September. For the official delegation led by the new Commerce Minister, Arun Jaitley, it was a chance to test the waters on critical issues such as agriculture, TRIPs and public health and the controversial "Singapore" issues. Though the conference was reported to be deadlocked, it would have been unrealistic to expect any consensus at this early stage. It was more an opportunity for developed and developing countries to come to grips with differing stances on the key issues and try to present their own positions as forcefully as possible. As the WTO is all about negotiations, various blocs and groups were able to identify which of the key players could support or oppose them in what has been described as the Doha Development agenda.

Any discussion on the Doha agenda would be incomplete without a mention of the key role played by former Commerce Minister, Murasoli Maran, at the last ministerial conference. Despite the dismissive approach of many here who felt his aggressive posturing was not required and did not yield dividends for India, the reaction has been far different abroad. Even the seasoned European Commission negotiator, Pascal Lamy, reportedly told journalists in confidence that he would have taken the same approach as Mr. Maran had he been in the same position.

Ultimately, the question has often been asked as to what Mr. Maran's contribution was to the negotiating process for this country. It hinges largely on the insistence that "explicit" consensus is needed to discuss the Singapore issues of transparency in procurement, trade facilitation, investment and competition policy. The inclusion of the significant word "explicit" led to the entire WTO conference being stalled till the developed countries agreed on this draft. In international draft agreements, the fate of nations hangs on such apparently trivial changes. It must be recalled that it was the failure of developing countries to stall the inclusion of the so-called trade related intellectual property rights (TRIPs) that has led to a paradoxical situation now when a multilateral trade body debates the issue of patents which should actually have nothing to do with the WTO. It was the failure on this front that made the South react far more vociferously when the North sought to introduce the "social" clause, bringing labour into the WTO fold. India has been in the forefront of countries opposing this attempt and insisting that labour issues rightly lie in the purview of the International Labour Organisation (ILO).

The WTO is thus sought to be made into an omnibus body tackling virtually all aspects of economic activity in the garb of globalisation. While the original aim of having a rule-based organisation to resolve international trade issues was laudable, it has metamorphised into a giant amoeba-like creature covering all aspects of the economy. The Singapore issues, for instance, have nothing to do with trade. Transparency in government procurement is, simply put, purchases by sovereign Governments for their own use. While transparency is a desirable aim in purchasing, ensuring that all government procurement is put up for global bidding does not promote the cause of globalisation or liberalisation. It has more to do with every country's own corruption index and the entry of foreign players is not likely to improve the level of transparency.

Similarly trade facilitation is a laudable aim and a country like India seeking to raise the volume of trade undoubtedly needs to improve infrastructure. This is not, however, an issue that needs to be discussed at a multilateral trade forum. As for investment, the issue has been discussed at length at various multilateral fora and even the rich man's club, the OECD, has not been able to reach any consensus or conclusion on a multilateral investment agreement (MIA). Even if such consensus had emerged, the South is clear that investment is not an issue for a trade related organisation though the issue of an MIA is recurrently raised by developed countries. Equally, competition policies have little to with trade agendas.

In other words, the so-called Singapore issues are yet another attempt by developed countries to hijack the agenda of the WTO and expand it beyond all proportions. It was to subvert this process that Mr. Maran insisted on "explicit consensus" which meant that all countries must agree to include Singapore issues on the WTO agenda before any discussion can take place.

It was this apparently small textual alteration that enabled the present Commerce Minister to use the term "explicit consensus" as a crowbar to open up the controversy over these issues at Tokyo. Initially, Mr. Jaitley was able to push the unpalatable Singapore issues to the tail end of the agenda and then succeeded in highlighting their unsuitability for inclusion in a multilateral forum. Immediate support was forthcoming from the rest of the developing world.

In this context, it must be pointed out India still seems to retain its aura as a natural leader of the developing world at fora like the WTO negotiations. Despite the fact that the country's economy does not have the impact of China, smaller nations especially in Africa lacking in infrastructure for the complex WTO negotiations still rely for support on India. Realistically, it must be recognised that when the crunch comes, they can be won over by sops offered by developed countries. But they have realised the importance of negotiating jointly and African and Caribbean countries have become a bloc to be reckoned with ever since the Seattle conference.

Though like all countries, they all look for their own advantages, India's reputation for taking a principled stand and sticking to it has given it an enhanced status at the last two ministerial conferences. It was no wonder then that the Indian delegation had many requests for bilateral talks from other developing countries to finetune the negotiating approach in the run-up to Cancun. While the media may be insisting that the Tokyo conference has failed, for developing countries it proved a good opportunity to gauge the extent to which the U.S. and the E.U. will push forward for acceptance of their respective proposals. India, like others, has to take the approach that will yield it most benefits. It may find it more fruitful to ally with the U.S. on the agriculture issue as the E.U. is reluctant to bring down subsidies, but may find the E.U. more amenable on the TRIPs issue. As for developing countries, India has found it is clearly aligned with Brazil, a large pharmaceuticals producer on TRIPs while many others would be allies on the tricky issue of industrial tariffs.

In regard to India's own initiatives, it will have to push hard for opening up of services and the critical issue of movement of natural persons, an area of tremendous advantage for this country. Just as the developed world has sought to open up markets of the South, the movement of natural persons will also have to be opened up for India and other countries with a large pool of technically qualified manpower. Many other issues have to be taken up but what is of utmost importance is that India becomes even more vigorous than at Doha in protecting its own economic interests at the coming Cancun ministerial conference.

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