WTO: Why all the fuss over the Doha Ministerial?

Financial Express, November 6, 2001

By Pradeep S Mehta

The hype in India over the ministerial meeting of the World Trade Organisation (WTO), scheduled to begin this week at Doha, can only match the Niagara Falls in its fury, but in substance it is as nonsensical as an elephant climbing the Mount Everest.

Indeed, the WTO is an unequal treaty, but that truth applies to all countries, including the rich. If one looks at the hype in the United States over WTO it is about the same level as that in India. But, we are a tiny economic player against what the US is, despite the current downturn in the latter.

In this scenario, basically there are three issues before the international community: whether Doha is a safe place to meet at this juncture; whether the draft text of the ministerial declaration is acceptable to all, and lastly, in the unfair international trading system, whether the poor are going to get the short end of the rod once again.

Doha is as safe or unsafe as any other place in the world today. A huge collection of important economic decision makers at one place could attract a terrorist action through whatever means, anywhere in the world. If the World Trade Centre or the Pentagon could be attacked, so could the Convention Centre in Singapore. And the action could be through chemical or biological means as well, however, that is a remote possibility in the present circumstances.

The likely attackers are under siege, and Doha is not the best place for them to carry out an adventure knowing that it would alienate the Arab community, thus losing the polarising advantage.

Second, as many of us know, the international community could not have pulled out from Doha at this critical juncture for both political and economic reasons. It would have alienated the Arabs to quite an extent. After all, Qatar offered its capital to host the meeting at a juncture when no other country was willing and has spent a considerable amount in ensuring that it is held in a proper manner. Also, people don’t want a second Seattle.

On economic grounds, postponement of the meeting could have lead to a lull in the possible recovery that the world is desperately looking for.

Now to the document which is causing much heartburn, because it seeks to continue to deepen the WTO’s involvement with non-trade issues such as investment, competition, environment etc. Are these non-trade issues in the realpolitik sense? They are not. The Uruguay Round, itself, had brought them in, and the first ministerial meeting at Singapore in December 1999 ensured that they are on the WTO’s agenda and work programme. Investment and competition have been discussed in a structured manner over the last four plus years, while environment has been discussed in a committee since the beginning of the WTO.

Investment is already there under the General Agreement on Trade in Services (GATS), while negative investment measures have been outlawed under the agreement on Trade-Related Investment Measures (TRIMs). It is the TRIMs-agreement which requires further work on investment and competition.

Despite, the US recalcitrance on both investment and competition, the subjects are there for being adopted for negotiations. That means that the US is acceding to the European Union (EU), for getting them to agree to reduce its subsidies in agriculture. The EU would like to show some achievement at Doha if it has to carry along members such as France to cut subsidies. Tactically, the EU has drummed up storm on environment to create further non-tariff barriers for agro goods. That is also another bugbear for the US, considering the dispute over he beef hormone case etc. Environment, itself has been discussed inconclusively over the last five years. In this, there are issues for India as well as other developing countries, such as biodiversity, TRIPs, transfer of technology, domestically prohibited goods etc.

So, there exists a balanced agenda under this too. The problem areas are labelling, and the manifest PPM issue under it. But, it is not so difficult for the negotiations, if any, to be carried on for another few years. If one looks at investment and competition, negotiations will only be launched at the next ministerial. Here too, countries will be allowed to opt out if they are uncomfortable. The situation is not so bad as it was under the Uruguay Round period. Developing countries, including India, are better equipped with even the US as a strong ally, that one needs to be afraid of negotiations. Besides, we have smart negotiators who can drag the issue for years and years without any conclusion. In the end, there may not be any agreement at all. Perhaps, only good practice codes maybe agreed which will not be justiciable.

In any such comprehensive negotiations, inevitably there are trade-offs. As issues to be gained from, India will have enough to push its own agenda: traditional knowledge and geographical indications under the TRIPs agreement, movement of natural persons under the GATS and so on. The only problem that we have in India, and perhaps few other developing countries, is that civil servants are the negotiators. By the time they learn the ropes, they get shunted out to another job. If only the government can think of a better arrangement, we may ultimately lose out.

On the matter of transparency in government procurement and trade facilitation, we have nothing to lose. On the contrary, we have everything to gain. First, it will lead to better governance and reduction of barriers, which can be helpful both domestically and for our export markets. The only fuss is that we have limited capacity to negotiate at Geneva. That can be resolved quit easily, if sufficient resources are devoted, which a country like India can afford.

However, in this game there are elements within our country, who would be happy to continue to bask in a protectionist framework, as it suits them. They are not lobbying for the economy, but for their narrow goals and they need to be checked if India has to push its reforms agenda.

One good example of this is in the move to enact a new and better competition law. One of the main reasons for this is the discussions at the WTO. The proposed bill is already facing opposition from the same protectionist elements.

India is neither a small country not a weak one, that one needs to be afraid about the agenda at Doha. After all only a road map will be adopted, and not the final destination. We have enough capacity and gumption to take on what will come out of it. We already have our own road map, which will need to be worked upon in times to come.