WTO and the Blame Game

Published: The Hindu Business Line, May 09, 2003
By Pradeep S Mehta

“Earlier there was one East India Company, now the WTO is bringing in thousands of them”

NEVER before has the world shrunk so much. Satellite television and the Internet have accelerated the process. Not many realise that globalisation is not the Frankenstein they imagine it to be, but a wave that can help the poor overcome poverty. However, globalisation continues to be attacked by all and sundry for reasons often inexplicable.

At another level the WTO faces the ire of most people, who see it as an ugly vehicle of globalisation. More so in India, Pakistan, and Bangladesh where it is seen as a new avatar of the East India Company.

Much of this is due to ignorance coupled with propaganda by distortive elements in the society.

Says a farmer to a reporter: “Globalisation? Earlier there was one East India Company, now the WTO is bringing in thousands of them.”

The bogey of East India Company is superimposed on the Indian psyche. One often sees newspapers carrying stories on the FDI policy with the wolf cry that it will bring back more East India Companies. The FDI policy is being liberalised to attract investment, as it is scarce in India. Not only developing countries such as India, but also rich counties woo foreign investment, as it helps them to move faster on the growth ladder.

However, anything foreign is looked at with suspicion. If the swadeshi (national) outlook can help us improve the economy, it should have happened long ago. Conversely, the WTO — in spite of its faults — can help India grow.

“We read about WTO opening new markets but will they buy our bajra or guar? On the other hand urbanites now buy soyabean and rapeseed oil from abroad, and we have stopped growing mustard,” says another farmer. Rapeseed, yes, but the farmer does not know that much of the soya consumed is produced locally. On the other hand, rapeseed or palm oil is much cheaper than mustard oil. This helps the poor in India which has the highest per capita edible oil consumption in the world.

The allegations are often baffling too: If there is no demand for onions then the “imported onions” are blamed; If local seeds are difficult to procure, then the foreign seeds are accused of flooding the market.

Another peculiar link between the WTO and a non-trade issue — the weather — was propounded at a seminar in Mumbai last September. If prices of agricultural commodities vary according to output which suffers from the vagaries of weather then it must the WTO which is responsible for the changing climatic conditions. Weathermen were called upon to study the links!

The latest Budget spoke about reduction in tariffs, so that the production costs are lower and exports more competitive.

India’s competitive advantage is huge in the textiles and clothing sector. Thus, there is a strong case for reducing tariffs on inputs such as petrochemicals, man-made fibres and yarn.

Promptly, some vested interests lobbied against the same, arguing rather speciously, that such reductions should be done only in the framework of WTO negotiations.

Using the WTO as a bugbear has become a habit for many. However, there are voices of sanity. At the release of WTO: Road Ahead, published by the Institute of Chartered Accountants of India in New Delhi, the Vice-President, Mr Bhairon Singh Shekhawat, queried the Cassandras: “If communist China has struggled to get into the WTO, why should India even think of exiting from the same.”

The Minister of State for Commerce and Industry, Mr R. P. Rudy, at the same function, added that China had done homework for 20 years to prepare itself for the WTO. “We need to emulate China and make progress on all fronts,” Mr Rudy asserted.

The fact is that for their own selfish interests, political parties, particularly when in Opposition, distort the debate on globalisation.

A few industrial houses — afraid of competition — also join the bandwagon. The need of the hour is for intellectuals, politicians, consumers and businesses to drop the campaign to discredit globalisation or the WTO.

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