Kamal Nath: Showmanship at the WTO that plays well with the poor

The Financial Times, January 30, 2009
By Alan Beattie

Kamal Nath rarely misses the opportunity to make a point. When India’s influential trade minister took time out from the international policy circuit to campaign in November’s state election in Madhya Pradesh, he was the first to admit that questions about the World Trade Organisation were not a staple concern of voters.

But still, he claimed time and again that the uncompromising stance he took in the so-called “Doha round” of global trade talks stood him in good stead as a champion of India’s poor. “They know I stand up for them,” he said. “That’s why they support me.”

Both the Doha round and Mr Nath face an uncertain time. While he refused to discuss it directly, Mr Nath, a Congress MP, was one of the leading candidates to become chief minister in Madhya Pradesh. But the ruling BJP easily held on to the state.

And if, as most assume, the ruling Congress-led coalition in New Delhi fails to retain power in the forthcoming general election, which must be held by May, Mr Nath could face a spell in the political backwaters.

It is not a position to which he is accustomed. Unlike many of his technocratic colleagues, Mr Nath revels in the spotlight. His orchestration of other developing countries in the Doha round, especially in opposition to the US, evokes admiration from his supporters and frustration from his opponents.

More than a few officials and observers in Washington were hoping that a victory in Madhya Pradesh would remove Mr Nath from the WTO circuit. In early December, as the votes were being counted, the director-general of the WTO faced a difficult decision about whether to call ministers to a meeting that could either have achieved an outline deal or ended in another failure.

Many officials and observers identified Mr Nath as the main influence on that decision. Christopher Wenk, senior director of international policy at the US Chamber of Commerce, said at the time: “In reality, the biggest calculation … on whether or not to have another go at a ministerial in December, is whether Kamal Nath, and India, will actually be willing to negotiate or is he more willing to run out the clock on 2009 and the end of the Bush administration.”

In the event, Pascal Lamy, the WTO director-general, decided against taking the risk. And while some countries expressed frustration, Mr Nath insisted that a bad deal for the developing world was worse than none.

India has traditionally been one of the more recalcitrant of the big countries in global trade talks. But under Mr Nath, its influence has increased. Along with Brazil, the EU and the US, India has been part of the core negotiating group at the heart of Doha.

And while Celso Amorim, Brazil’s foreign minister, plays an influential role, it is overshadowed by India’s rallying of other developing nations to demand deeper cuts in US farm subsidies and more leeway for poor economies to protect their farmers with import tariffs.

For those who want a louder voice for the developing world within the WTO, Mr Nath is good news. Pradeep Mehta of the Consumer Unity and Trust Society, a think-tank based in Jaipur, says: “He has been the rallying point, along with Celso Amorim, for the developing world in putting their interests upfront in the WTO … Sharp, witty, pragmatic and astute, Kamal is sure to continue his meteoric rise in India and the echelons of world leaders.”

Yet some within India want to see the country be a force for liberalisation. Ashok Gulati, co-author of a book on WTO negotiations and agriculture, says India has less to protect than it claims. “We should be less defensive,” he says. “We would be in a better position to demand concessions from developed countries if we agreed to lower bindings [ceilings] on agricultural tariffs.”

That seems unlikely with Mr Nath in charge. Defying a promise by the G20 leading economies to take no new protectionist actions, he raised soya tariffs in November. Placating soyabean farmers, it appears, takes precedence over international promises and liberalising trade.

If Congress does lose the elections, whoever takes over from Mr Nath is unlikely to have the same showmanship or political skills. But the pressure any new minister will face – to avoid being seen to sell out India’s poor – will remain.

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