OP-ED
/ OPINION/WTO DOHA ROUND
Under pressure, India makes U-turn
At a two-day international seminar on "Saving Doha and delivering on
development" that concluded at New Delhi on 13 March, India's Commerce Minister
Kamal Nath provided ample evidence of India's willingness to go along with the
rich and industrialised countries. The writing is on the wall, says
Devinder Sharma.
15 March 2007 -
The writing is clearly on the wall. With India succumbing to pressure and the
G-33 group of developing countries unlikely to stand in the way, the
controversial Doha Development Round of the World Trade Organisation (WTO) may
just be all set to sail through.
At a two-day international seminar on "Saving Doha and delivering on
development" that concluded at New Delhi on Mar 13, India's Commerce Minister
Kamal Nath provided ample evidence of India's willingness to go along with the
rich and industrialised countries. In what appears to be a u-turn in India's
position so far, Mr Kamal Nath said: "This round is not about removal, but about
reduction of distortions that lead to artificiality in prices."
To be seen in conjunction with what Prime Minister Manmohan Singh said the same
day at another roundtable organised by The Economist in New Delhi: "India was
committed to an early positive conclusion of the Doha Development Round," the
underlying message is crystal clear.
For a few months now, after the suspension of the Doha round negotiations in
mid-2006, New Delhi has been under pressure to drop its opposition. WTO chief
Pascal Lamy had time and again visited India, and had used every opportunity to
negotiate on behalf of the developed countries so much so that he was allowed to
walk after he had literally threatened India. Knowing well that Kamal Nath's
'tough' posturing is aimed only at the media, Lamy now made it abundantly clear
that an agreement on Doha round has to be reached before the
expiry of the US Trade Promotion Agreement in June.
If the agreement is not signed by June, the US President will lose his Fast Track authority to approve international trade agreements, which means the US Senate/Congress will then oversee the agreements.
This is why the US wants to hurry.
On the other hand, if no agreement is signed by June it will still be beneficial for Indian agriculture.
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The 'free trade' explosion
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Much ado about nothing
If the agreement is not signed by June, the US President will lose his Fast Track
authority to approve international trade agreements, which means the US Senate/Congress
will then oversee the agreements. That is why the US wants to hurry. If no agreement is
signed by June it will still be beneficial for Indian agriculture. As long as the
subsidies stay in the rich countries, we will not be able to protect our agriculture.
The two-day conference in New Delhi was therefore an effort by the Ministry of
Commerce to provide justification for a complete somersault in its official
stand. The list of invitees, and the selective picking up of speakers and
rapporteurs made the real objective copiously clear. Keeping the real
stakeholders away, and ensuring that the critical voices were not present,
"Saving Doha" became the rallying point.
Henry Benfield Jeffrey, Guyana's Minister of Foreign Trade and International
Cooperation and Moudjaidou Soumanou, Benin's Minister for industry and Commerce,
were two speakers who made it clear that they were not in favour of a bad
agreement. Most of the other speakers, and that included ambassadors from Brazil
and Indonesia and trade ministers from South Africa, Mexico and Argentina, only
expressed concern but were more than willing to see the round through. The
selectively picked Indian speakers, many of them retired bureaucrats, were of
course for a speedy conclusion. They included Radha Singh, former Agriculture
Secretary, B K Zutshi, former Ambassador to GATT, S N Menon, former Commerce
Secretary, S Narayanan, former Ambassador to WTO. Anwar Hoda, former Deputy
Director General of WTO (and now member Planning Commission) was also present.
Interestingly, the empirical evidence that Sandra Polaski of the US-based
Carnegie Endowment for International Peace presented showing that the Doha round
to be heavily biased against the developing countries, found few takers.
The UNCTAD-India study on Green Box subsidies and the benefits it would throw
for the developing countries if the support were to be abolished, also did not
find many takers. As expected, the rapporteurs made only a passing reference to
what was in reality the most substantial contribution to the deliberations.
The rest was merely rhetoric.
For those who have been following the WTO negotiations, a turn around by India
at the crucial juncture is nothing new. Remember the failed Cancun WTO
Ministerial in 2003? India's former Commerce Minister, Arun Jaitely had
shouted from the rooftop that he was unwilling to accept any agreement with the
massive farm subsidies of the rich countries intact. And yet at the concluding
stages of the negotiations (which finally failed because of a walk-out by
African countries), India had actually accepted the unjust agreement.
Negotiators should be asked to openly spell out the benefits to their
respective countries after they have inked an agreement.
Kamal Nath picked up from where his predecessor left. After the hastily
concluded July Framework 2004, which had allowed the rich countries to increase
their agricultural support, he was against the re-opening of the agreement as it
addresses the developmental issues of the developing countries. What
'development' benefits did Kamal Nath see when even a former US Trade
Representative Charlene Barshefsky made an honest admission (to the Third World
Network on 21 February) that the Doha round was launched on false pretences,
including calling it a 'development' round.
Just before Hong Kong Ministerial in December 2005, Kamal Nath had loudly said before
a cheering media: "What the US proposed is not real cuts in agriculture
subsidies. The real cuts would be when there is decline in the support provided
by the US treasury." Nath was referring to the US offer to reduce domestic support
by 53 per cent and the EU following it up with another offer of 70 per cent.
Interestingly, post-Hong Kong, for some strange reasons the minister agreed to
the same commitment he rejected.
Whatever the US and EU may offer to keep Doha round is not going to translate into
any actual reduction in the massive domestic support, this much is known. The
US $360 billion support to agriculture in US, EU and Japan will remain
intact. In fact, the US has announced more support to agriculture under its
new Farm Bill 2007, and this is not surprising.
In 2006, at a day long meeting of trade negotiators in London, ahead of the G-6
'Striptease' Summit on Mar 10-11, Kamal Nath stopped talking about agricultural
subsidies. Senior trade officials from the US, the EU, Brazil, India, Australia
and Japan debated only on how to overcome the differences in the market access
pillar of the Doha farm trade negotiations. There was no mention of agricultural
subsidy commitments.
India had by then shifted to identifying the number of 'special products' for
which there were to be no further tariff reduction commitments. Subsequently, at
the World Economic Forum 2007 at Davos, Kamal Nath was even willing to provide
'flexibility' in the number of 'special products' to be negotiated, which in
other words meant that he was willing to reduce the tariff lines that need to be
protected.
In any case, 'special product' is not a long-term protection. Pascal Lamy had
earlier cleared the mist: "the use of special products will be limited, and in
the future it will shrink." As subsequent studies by the Carnegie Endowment for
International Peace has shown that even with all the SPs and Special Safeguard
Measures intact, the gains will still be more for the developed countries. If Doha
round succeeds, the entire gain in agriculture to the developing world would be
to the tune of US $6.7 billion dollars. This so-called gain has to be shared
between 110 developing countries. G-20 countries must tell us what 'development'
gains they have for each member country.
Not only India, but the G-20, G-33 and the G-90 group of developing countries
have failed to get the developed countries reduce even one dollar in the
massive domestic support they give to their agriculture. The tall claims of 'victory' at the conclusion
of every WTO Ministerial and general council agreements speaks volumes about the
incompetence and failure of the negotiators from the developing world. I don't
know if any one of them has ever worked out cost and benefits accruing from the
Doha round. Negotiators should be asked to openly spell out the benefits to
their respective countries after they have inked an agreement. It is high time
trade negotiators are made accountable to the society.
Meanwhile, Indian farmers and for that farmers in the other developing countries
must continue to pay the price with their blood for yet another unseen 'development',
which in reality means keeping agribusiness companies in western countries
afloat.
Devinder Sharma is a food and trade policy analyst. He also chairs the New Delhi-based Forum for Biotechnology & Food Security. Among his recent works include two books GATT to WTO: Seeds of Despair and In the Famine Trap.
