Opinion - News Analysis   

The WTO and civil society: an encounter

Sushma Ramchandran

Indian stakeholders express their unhappiness with the Doha round.

WORLD TRADE Organisation director general Pascal Lamy felt the full weight of Indian civil society on a recent visit as he sought to get a sense of the stakeholders' views on the Doha development round of negotiations. From angry farmers to lucid economic experts, he heard the strong views of those who may ultimately be affected by the outcome of the current round of trade talks.

Mr. Lamy, who is known to survive on bread, bananas, and early morning jogs during marathon trade talks, must have been amazed by the wide range of views expressed. Contrary to its name as the "development" round, few were convinced it was in favour of the developing economies. Instead, the perception that the WTO is pro-rich and that the North will be the biggest beneficiary was clearly projected to the visiting official.

At the same time, there was a division among Indian stakeholders. Those in the agriculture sector viewed the WTO talks with hostility and even suggested farm trade should be taken out of the WTO's purview. On the other hand, the corporate sector was keen on services negotiations and on viewing the WTO as a forum where the movement of professionals could be liberalised, yielding tremendous benefits to India.

The stakeholders' forum organised by the United Nations Conference on Trade and Development (Unctad) and the Union Commerce Ministry illustrated this divide, but the concerns of the farm sector, representing a much larger segment of the population, naturally dominated the discussions. Many of the participants had fascinating sidelights to share on the debate over free trade in global agriculture. On basmati rice, for instance, a speaker asked Mr. Lamy why rice should be grown in Europe by giving hefty subsidies to enable the producers to compete with the much cheaper and cost-effective product raised by South Asian farmers. In this context, he cited the "straight-faced" explanation give by Europeans about the need to protect rice farming in Spain. He recalled that they claimed it created a habitat for wild birds and this, in turn, needed to be protected. In contrast, of course he noted to the need to protect subsistence farmers in India.

Another stakeholder, representing the interests of cotton farmers, described the WTO as another form of neo-colonialism while highlighting the $3.5 billion subsidy given for growing cotton in the United States. As a result of these subsidies, he said, prices had fallen in the international markets affecting cotton farmers in poor countries. It was pointed out that dairy farming was still largely a subsistence activity in India. Most dairy farmers had only three to four milch animals as against the thousands of animals in the developed world's dairy farms. The high "bound" rates of import duty on dairy products in India were thus completely justified, it was stated.

High farm subsidies

Most farmers' spokespersons told Mr. Lamy that agriculture subsidies had not been reduced over the past decade since the WTO was set up. This had led to a fall in global prices of most farm products. They also told him that if comparative advantage was to be a determinant of trade, India would be the most competitive as it produced rice at one-third the cost in developing countries. Besides, there was anger over subsidies being provided to agri-business and big farmers in developed countries. Several also linked the decline of Indian agriculture and farmers' suicides to these subsidies.

These issues were raised again at a protest demonstration on the second day of the WTO chief's visit where farmers demanded that agriculture be taken out of the ambit of the trade talks. Mr. Lamy had to repeatedly insist that he was not a negotiator at the talks and was only functioning as a kind of umpire. He even had to concede that the existing comparative advantage enjoyed by the developed world in agriculture was unfair and needed to be corrected by slashing subsidies. But clearly the views expressed on both days must have toned down any optimism for concluding the Doha round by the deadline of end-2006.

The prospects of achieving the earlier target of fixing modalities for agriculture subsidies and talks on industrial tariffs by the end of April also look bleak at this stage. Mr. Lamy has to bring both sides to the table. Forward movement on the talks depends largely, however, on the developed world in order to ensure that the term "development" for the Doha round has any real meaning.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Mr. Berlusconi's clear defeat
The limits to openness
Narmada project: the points at issue
The WTO and civil society: an encounter
Too old to be a ballerina? Then just buy the accessories
A symptom of this age of stalemate
Corrections and clarification
Price of negligence
Futile exercise
Reservation debate
"Cooperation and conflict co-exist"

Copyright © 2006, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu