Win some, lose some at trade talks

Published on: Financial Express, November 20, 2001,
By Pradeep S Mehta

Whether India won or lost at Doha is the hot topic of discussion these days. India neither won nor lost; it bargained hard — and with fair amount of success — to minimise the losses and maximise the gains.

In the world of international trade, each country pursues its interests. With that in mind, commerce minister Murasoli Maran did play a bold gamble and succeeded. The strong alliance that India had built up with other developing countries had frittered on the eleventh hour, and if Maran had not played the gamble, India would have had to give more than what it would have been ready for.

One important area of perceived gain is that negotiations, if any, on the new issues — investment, competition, trade facilitation and transparency in government procurement — have been postponed by another two years. To me it is but a pyrrhic victory.

During the Uruguay Round (UR), the United States stopped short of demanding a full scale investment agreement under the Agreement on Trade Related Investment Measures (TRIMs) in order to wrap up the talks as well as ensure the closure of the Trade Related Intellectual Property Rights (TRIPs).

In the current drama, it was the EU which was a demandeur for the new issues to offset perceived losses in its agreeing to negotiate (but not ‘reduce’, as some newspapers have mistakenly reported) agriculture subsidies. Meanwhile, horse-trading will continue, and the EU will pursue its non-trade agenda as vigorously as before, if not with greater vengeance.

We have been shouting for quite some time that non-trade issues should be kept out of the WTO. Therefore, investment and competition should be out, but it is during the UR that we have agreed to examine them under the TRIMs agreement for being adopted as a part of the WTO agenda.

It was a built-in agenda, like in agriculture or services. Thus, we could not have said these issues should not be there at all, otherwise we would have run the risk of losing the issues we wanted the trade community to discuss.

TRIMs remains in the WTO agenda. It would have been a significant gain if only we could have gotten the international community to begin examining the validity of the existing non-trade issues already in the WTO such as TRIMs and TRIPs, the root of most problems. We did not pursue this line as we were afraid that we will not be taken seriously.

I have always argued that the so-called Singapore issues are not entirely against our or any developing countries’ interest. Except perhaps the issue of investment, as there is no evidence to show that an international agreement on investment can facilitate investment flows, or vice versa. However, if there is a trade off with whatever else, then we can negotiate an investment agreement subject to getting an agreement on the movement of labour.

As far as a multilateral competition policy is concerned, we have been asking for it ever since 1948 under the Havana charter. It is required to balance the producer bias of the WTO, to be a bulwark against cross-border mergers and acquisitions, and to regulate international cartels.

Two years will whiz by so fast that we will get caught napping again. We need to take an active part in each of the four working groups and guide the agenda. For all this much homework will need to be done from today.

As regards TRIPs and public health, the ET reported on November 16 that the power of a country to import such life-saving drugs from any other country, when it doesn’t have its own manufacturing capacity, is suspect.

This is not exactly correct. Indeed the declaration has asked the TRIPs council to find a solution to this problem before the end of 2002. However, IPR pundits have interpreted the TRIPs flexibilities to include imports where it is not possible to manufacture the same locally. It is quite commonsensical and precedented as well. During the recent crisis in the AIDS drug, AZT, it was Indian pharmaceutical manufacturers who were exporting to South Africa, Kenya, etc.

As regards cashing in on the gains in the WTO talks, we have to attend to a huge domestic agenda before we can reap any of the perceived gains that future negotiations can throw up. Maran said this clearly, and that is his most statesmanlike statement after the Doha ministerial

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