Will Cancun talks become Cantcun?

In about a fortnight’s time, trade ministers from 146 member countries of the WTO will congregate for their two-yearly meet at Cancun, Mexico. At the last such conclave held in November 2001 at the Qatari capital, the Doha Development Agenda was spelt out. Its objective is to further liberalise global trade in a manner so as to enhance gains for developing countries.All negotiations are to be completed by January 2005. Not much has actually been accomplished so far.
At Doha, India stood in splendid isolation. Most countries indulge in multilateral rhetoric but open bilateral windows of compromise. Not India. Murasoli Maran cannot be blamed. He reflected an all-party consensus to commit hara-kiri. His successor’s brief at Cancun will be no different. The noise that India makes in international forums is disproportionate to its measly share of world trade of less than just 1 per cent. Part of the problem is that no government in India has had the courage to sustain a campaign for public education on WTO-related issues.
Dispute settlement is at the heart of the WTO. India has lost some cases like in drug patents and won some against the US and the EU in areas like textiles. This system has to be made more effective. It is in India’s interests that the reluctant Americans, Europeans and Japanese reduce their huge farm subsidies, both overt and covert. But our case for championing this cause is eroded when we keep increasing import duties on agricultural commodities. We must review agricultural subsidies even though the WTO is not forcing us to do so.
Indian agriculture is being starved of essential public investment because most of government’s money goes into subsidies. We also have to ask ourselves, even though there is no WTO pressure, whether the huge amounts we spend on food security — Rs 28,000 crore this year — is achieving its objective. Quotas on textile imports will be abolished in the US and Europe by January 1, 2005. We have to be fully prepared for this new regime. India must introduce product patents for pharmaceuticals by January 1, 2005. This will greatly help Indian science and technology. Countries like Brazil have WTO-compatible patent laws while retaining the right for sovereign action during well-defined public health crises. Here, the US has not played fair by giving in to lobbying by US drug firms.
Liberalisation of trade in services is of particular interest to India, but we must give just as we take. In recent years, there has been an increase in protectionist sentiment in the western countries on visas, for instance. But through bilateral agreements with the USA and the EU, such barriers can be overcome. It is pathetic that India continues to harp on ‘‘special and differential treatment’’ for developing countries. Africa needs this. India does not. India’s case against the use of anti-dumping duties by the developed countries has lost its legitimacy. It is now the largest user of such duties. The hurt that is inflicted upon us is greater than the damage we can cause our trading partners.
WTO is as much of trade law as much as of trade. But we have yet to build up significant expertise. Domestic legislation to take full advantage of the WTO also must be in place. The Chinese are using the WTO to drive fundamental internal reforms. On the other hand, many in India still look upon the WTO as an evil devil. Greater exports from India are prevented not by external constraints but by our own policies at home, whether it is agriculture or textiles or manufacturing. Twenty years ago, China’s exports were twice that of India’s. Today, they are over six times greater. The same applies to imports. This is important as India still clings to the out-dated notion that fair trade means more exports and little or no imports.
kautilya.jairam@indiatimes.com