The Hindu : India to oppose multilateral investment regime at WTO

Online edition of India's National Newspaper
Wednesday, Jul 30, 2003

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India to oppose multilateral investment regime at WTO

By Sushma Ramachandran

NEW DELHI JULY 29. India has decided to strongly oppose the inclusion of a multilateral investment regime on the trade agenda at the coming Cancun ministerial conference of the World Trade Organisation even at the risk of being isolated from the rest of the world community. Though other developing countries, including China, are voicing the same views, seasoned negotiators are aware that when the crunch comes, it could be India alone standing against the issue.

Sources here say that the Commerce and Industry Minister, Arun Jaitley, has been given a brief from the Prime Minister's office to staunchly oppose the multilateral investment proposal despite strenuous efforts of the U.S. and the European Union to lure India into accepting at least a discussion on the issue. As a result, India's negotiators at Geneva recently and at the ongoing Montreal mini-ministerial conference have been directed to be firm on blocking the move by developed countries to discuss modalities for placing investment on the trade agenda.

Investment is one of the four "Singapore issues", the others being government procurement, trade facilitation and competition policy. At the last WTO conference at Doha, it was left to the former Commerce Minister, Murasoli Maran, to take a hard line against including them in the new trade round. His obduracy on this count forced the meeting to seek "explicit consensus" of all members before even going ahead with modalities to discuss the Singapore issues.

Since then, both the U.S. and the European Union have been lobbying hard to ensure that India agrees to discuss the issues at a broad level. The most critical of the issues is investment and developed countries are seeking to play down its significance by suggesting that there should be talks "merely'' on a framework for a multilateral agreement.

Commerce Ministry officials, however, say that the proposals made at the recent General Council meeting at Geneva are extremely vague and do not provide any clarity about the direction of the discussions. In such a situation, it would be virtually like going "blind" into the talks, they feel, and could result in the country being committed to measures against its own national interest.

Caution is being exercised largely because of past experience when the South allowed intellectual property rights to be brought on the multilateral agenda as trade related intellectual property rights (TRIPs). When it was introduced in the Uruguay Round, none of the developing countries, including India, could have realised the long-term implications of negotiations on the issue.

In this backdrop, the Commerce Ministry has sought a clear directive on the stance to be taken on linking trade and investment. This is especially necessary since India's viewpoint has to be consistent in all the negotiations being held in the run up to Cancun. The official delegation both to Geneva and Montreal has thus been given the brief to oppose the linkage of trade to investment without any ambiguity.

Reports from Montreal indicate that China and India appear to be thinking on the same lines as they are both opposed to "last minute surprises" sprung on the delegates which had characterised the past rounds of multilateral trade negotiations.

The Disinvestment Minister, Arun Shourie, and the Chinese Commerce Minister, Lu Fuyuan, who met on the sidelines of the mini-ministerial, said that documents should be made available to member countries well in time to allow coordination of positions before the Cancun meeting.

On the Singapore issues, an official release said that China concurred with India's view that there should be an agreement first on the modalities on the basis of explicit consensus before entering into negotiations.

Mr. Lu agreed that there should be coordination on substantive modalities, the implications must be fully understood and "we should not be asked to take the first step without knowing where the journey will end".

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