Frontline Volume 18 - Issue 24, Nov. 24 - Dec. 07, 2001
India's National Magazine
from the publishers of THE HINDU

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Trade rounds and bounced cheques

Interview with V. P. Singh.

A strong critic of the World Trade Organisation (WTO) and its policies especially those vis-a-vis developing countries, former Prime Minister V. P. Singh says nothing much has come out of the Doha Ministerial round. He sees no point in the next round of negotiations which, according to him, will be like writing a cheque again when a previous one has bounced. Excerpts from an interview he gave T.K. Rajalakshmi.

Your comments on the outcome of the WTO ministerial meet in its totality.

There were two objectives, essentially from the point of view of developing countries. One was the implementation of old issues and the other related to new issues. A promise was made earlier that the developed countries such as the United States, Japan and the members of the European Union would reduce their agricultural subsidies and that would open the market for agricultural products from developing countries. The U.S. had promised that by 2001 it would reduce the quota restrictions on textiles by about half. None of these promises materialised. What to say of reducing subsidies, developed countries increased subsidies to the tune of $260 billion. As for textiles, in which we have a major interest, the U.S. has reduced restrictions by about 5 per cent instead of the committed 50 per cent. On the other hand, developed countries have been resorting to anti-dumping provisions much more than in the past. We were looking forward to the provisions of Trade-Related Investment Measures and Trade-Related Aspects of Intellectual Property Rights especially as we have had tremendous problems in the fields of health care, medicines and research.

Does the final declaration reflect India's concern over the credibility of a new round of negotiations when existing agreements are yet to be fully honoured?

Our main question was that when earlier promises have not been fulfilled, what was the credibility of promises in the second round? It is like writing a cheque again when a previous one has bounced. We were apprehensive that even if we were to go for a second round, what guarantee was there that it would be honoured? We have received the brunt of liberalisation. While we opened our agricultural markets, developed countries heavily subsidised their own.

Very little ground was gained on a textiles agreement. Was it a setback or a compromise to get issues like investment, government procurement and trade facilitation off the immediate negotiating agenda?

There was always a clear agreement on textiles but the U.S. muscles its way through each time when it comes to honouring it. The substantive point is that the issues raised in these rounds have an adverse effect. The kind of investment regime they want to bring will reduce national governments to having no role. National governments will have no regulatory authority. On the question of transparency in procurement, questions will be raised about what we procure from our farmers and that will definitely affect our Public Distribution System. They say we should have a "give and take approach" on textiles as they did not get what they wanted on agriculture. How many times are we to encash the same cheque?

What is your opinion about India's credentials as a leading member of the South at the WTO?

One achievement that is being talked about is in the area of compulsory licensing. But we have nothing to gain on anti-dumping, agriculture or textiles. All the other issues are open to negotiations and would be taken up after two years. But if one has not been able to intervene at the entry point of negotiations, what to talk of the end? We see global capital and governments of developed countries using the instrumentality of the WTO in imposing their own goals and priorities on the world economy. Governments have to take their people into confidence. Some of us told the Prime Minister, let us have a discussion on the WTO talks and take a stand - the country's stand. At least in Doha, the Indian delegation could have asked for a vote. Even if we were alone we could not have been thrown out, although this is what India has been afraid of - of being thrown out of the WTO. Expelling a member also requires a two-thirds majority. Had India been organised it would have been different. A credible leadership would have emerged. Smaller countries have no confidence in India. The SAARC (South Asian Association for Regional Cooperation) countries should unite. Within these countries, it should be the right of Parliament and Parliament alone to decide whether to become part of international treaties or not. It should not be left to the government.

What do you feel about the future of the WTO and the multilateral trading system, especially in the context of the global economic slowdown and growth of regional trade blocs?

We have endorsed the multilateral system of trading where the obligations of developed countries are imposed. We favour the multilateral system but it has to be fair. It is like the loaded dice incident in the Mahabharata. The majority of expectations have not borne fruit out of this system. Added to this is the poor state of our small-scale sector and the bigger industries. When vital sectors of the economy get affected, where will the purchasing power come from? The political issue is that national governments are getting marginalised. An elected government is answerable to its people. To whom is the WTO answerable? Anything under the sky can become a WTO subject. They have a dispute settlement mechanism but whenever it is settled that becomes a law for countries. Democracy is getting truncated more and more and nation-states are being taken over by bodies like the WTO.

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