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Aman Abhinav. Legal Intern, Centad
The Doha round of Development has rekindled the hope to the developing countries that development still remains high on the priority of the WTO and a deal could usher in gains over USD 300 billion per year. This comes at time when the global economies are at the lowest ebb and are reeling under the impact of recession. The talks had reached a standstill in the month of July last year (2008). Negotiations faltered on the SSM but ever since the elections are over both in the US and India there has been sharp shifts in the positions. The recent turn of events, both political and economic on American as well as the Indian front, has posed great challenges before the nations of the world in terms of overcoming the Doha stalemate, and also at the same time has provided them an opportunity to recount and reconsider their follies in the past and re-strategize their approach towards the broader objective, which the World Trade Organization intends to achieve.
The popularly elected and stable governments now in place at both the epicenters of trade negotiation, a new ray of optimism has opened up with the US government ready to push forth the Doha deal. The ongoing global recession and economic unrest however make the journey more arduous and would demand more than a mere initiative to see the deal come through. Secretary General, Pascal Lamy has also urged the member countries to refrain from taking up protectionist policies, which would completely rupture the already distorted trade. It is quintessential for the member countries to maintain the status quo, to help successfully re-engage with the suspended negotiations. The re-engagement places a greater onus on the shoulders of the United States to prove that their commitment is genuine and their conscience is clear. There is a history of events that question the plausibility of the multilateral regime and contradict the promises of the developed world and hence would require proactive effort on their part, if their pledge is to be redeemed.
Having said that, it is also to be understood that, an equal amount of burden has been placed on the Indian commerce ministry to out-manoeuvre the machinations of the United States. The United States has been known to broach-up new issues, in order to divert the attention from the ongoing negotiation, if they are not getting a fare share. Given the American clout in international forums, India should appreciate the fact that it cannot unilaterally put forward stronger terms of negotiations, but the same becomes easier if it is cloaked as a collective concern of the developing world. The Unique situation of the talks, amongst the worst of market situations, makes it inevitable for the rules of the game to contemplate a change.
The negotiations are expected to resume from the point of suspension and Agriculture and NAMA are to play prime stakes. The talks at the WTO collapsed on account of the hard position taken by both US and India on the position of SSM. India has been strongly supporting the position of the G-33 countries where agricultural still holds the key on account of the predominant employment and livelihood implication. The positions of the G-33 coalition symbolize the Non-trade component of the developing countries and strengthening it will not just improve the global agricultural system but also reduce the development bias that persists in the WTO negotiation. The talks are still in the nascent stage and still many aspects of agriculture need further attention. Even the final modalities are not reached and countries need to redefine the period of implementation which would mean revisiting almost all components whether it is the tariff simplification, escalation and tropical products. In the wake of the recent drug seizures, and due to the completion of the ‘tariffication’ process, the Non-Tariff Barriers have emerged as new bones of contention which need to be assuaged and barriers on account of environment standards are expected emerge. Apart from the NTB’s the TRIPS-plus issues also pose grave concern, there ought to be an understanding as to the ceiling/cap beyond which the TRIPS provisions cannot be read. The loosely worded border measures mandated under TRIPS need immediate attention as there exists no jurisprudence with respect to the application/internalization of these procedures.
It can be easily foreseen that the US would require India to open up its service sector in lieu of it resuming issuance of H1B visas to Indian workers. Apart from the above, the Americans would expect leverage in other sensitive sectors as well. The average applied industrial tariff as low as 20%, equips India with the strategic advantage to push for reduction of the high industrial tariff (peaks) in US and EU and provides India with upper strategic hand.
Before the talks ensue, it needs to be kept in mind that the negotiations shouldn’t be concluded in haste. There is no strong reason for India to show their cards early. Similarly there is no need for India to propose concessions, unless they are similarly reciprocated. There should be a visible and concerted effort on both sides in order to seal this deal and the original objective of international trade should play the torchbearer. Let’s not turn trade into a game, kids play for amusement, but a conscious effort towards realizing the originally envisaged notions of “global social, economic and technological development”.
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