India And WTO

12-18-2005, 11:40 PM

The current negotiations in Hong Kong has once again shown to the world that the developed nations are always ready to adopt double standards . While, they want the poorer nations to open up their market yet they are not ready to remove the various advantages that they are giving for the protection of their own products , notably agricultural products and cotton.

12-19-2005, 07:43 AM

QUOTEWTO draft sets date to end farm aids 
Reuters / Hong Kong
A draft deal put to World Trade Organisation (WTO) states on Sunday set an end date of 2013 for farm export subsidies, extended some help for the WTO's poorest states and offered something to African cotton producers.

Agreement on the plan is seen as vital to WTO hopes for a draft trade treaty early in 2006 which could inject billions of dollars into the global economy and lift millions out of poverty. Leading developing countries gave it a cautious welcome.

"India welcomes this final revised draft. From going round and round about we now seem to be setting course to a development agenda," said Indian Commerce and Industry Minister Kamal Nath.

The compromise text, proposed after six days and almost as many nights of hard bargaining between rich and poor nations, must be approved by the full 149-state membership gathered for a ministerial conference in Hong Kong.

"We agree to ensure the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect to be completed by the end of 2013," the draft declaration said.

An accord on when to end export subsidies would remove one of the major obstacles to progress in the WTO's Doha round of free trade talks, even if the compromise fell short of the 2010 date that major agricultural goods' exporters had been seeking. The draft also proposed eliminating export subsidies on cotton -- a sensitive issue for the United States -- in 2006, and proposed April 30, 2006, as a deadline for reaching a draft pact for the wider Doha trade round.

The Hong Kong ministerial meeting had initially been scheduled to sign off on a Doha draft, but differences were so great between states going into the conference that the WTO opted to lower the bar and seek a more modest pact.

For Least Developed Countries (LDCs), the text offered duty-free and quota-free access on at least 97 percent of all their goods by 2008, falling short of their demand for 99.9 percent.

It left open the possibility of dismantling rich nation cotton subsidies, a key African demand, at a faster pace than would eventually be agreed for all farm goods under a final deal.

But non-governmental organisations, which campaign on behalf of developing countries, were not impressed.

12-19-2005, 08:44 AM

Confessions of an Economic Hit Man - John Perkins is an interesting read. His interview is here

12-24-2005, 10:53 PM

The just concluded Hong Kong Declaration adopted at the conclusion of the WTO meet on 19th December 06, is indeed a surprisingly broad based document calling for wide ranging changes in EUâs agricultural export subsidy to industrialized countryâs tariffs on exports from least developed countries.

According to international media reports India played an important role in the negotiations. The International Herald Tribune stated, âIndia, the champion of the developing world since the days of Gandhi but now a computer programming power as well, played a crucial intermediary role in persuading poor countries to accept portions of the agreement calling for freer trade in services like telecommunication and banking.â
It may be recalled that till the 1990s , India had some of the stiffest protectionist policies, and it still has high tariffs on many imports , from food to shoes. However, the rise call centers , computer programming, accounting and financial analysis in cities like Bangalore, Hyderabad and other cities has created a large lobby in India for offering these services to other countries. This has made it possible for India to take mediatory stand on issues of free trade.
It is hoped that in the future negotiations India, Brazil and the Group of 90 nations will be able to maintain their solidarity and get the best of the deals possible from the industrialized nations.

12-25-2005, 10:34 PM

QUOTEIndia loses out in Hong Kong 
Pioneer.com
The UPA Government has squandered our initial advantage in WTO negotiations, says Arun Jaitley

The WTO Ministerial Conference at Hong Kong was initially aimed at not a very high level of ambition. Developing countries, particularly India, had entered negotiations both pre-Hong Kong and at Hong Kong at a relative position of strength. India's grit and determination as a Trade Negotiator was demonstrated in the Doha Ministerial Conference in the year 2001.

India, along with Brazil, had been instrumental in forming an alliance of developing countries in Cancun in 2003 on the issue of agricultural negotiations. The significant change that Doha and Cancun had brought to India's negotiating position was that first, India could no longer be ignored as a Trade Negotiator and second, the developing countries, by forming the G-20 alliance, had corrected the imbalance in the WTO which earlier had been entirely driven by the US and the European Union.

Cancun marked a distinct advantage to developing countries like India where large population is dependent on agriculture for livelihood and survival. The agenda of the WTO negotiations was radically changed. Market access and tariff cuts were now secondary, which the developed world had earlier tried to push. The principal agenda was that unless the developed countries substantially reduced and eventually eliminated the trade distorting subsidies, countries like India could not be expected to cut tariffs.

The UPA Government entered the WTO negotiations from this position of advantage. This advantage was substantially squandered at Geneva when the declaration of August 1, 2004, was approved by the General Council. The objections to the Geneva draft declaration by the BJP were as under:

* There was no specific commitment on the date of elimination of export subsidies and export support.l The draft sought to expand the Blue Box subsidies before reducing the subsidies contained in the Blue Box. The Blue Box subsidies are incentives to the farmers to restrict their production. The Geneva draft declaration recognised "the role of the Blue Box in promoting agricultural reforms".

* The Geneva draft, while recognising the role of the Blue Box in promoting agricultural reforms, treated the Green Box (ostensibly intended as subsidies for environment and livestock) as non-trade distorting. The draft referred to the "effectiveness of the Green Box".

* The Geneva Draft fell into the trap of ambiguity by stating that "as the first instalment of the overall cut in the first year and throughout the implementation period the sum of trade distorting support will not exceed 80 per cent". It, thus, left scope and ambiguity for the Blue Box to be first expanded and the trade distorting amber subsidies to be added to it and the entire amount of this trade distorting subsidies were to be 80 per cent throughout the period of Doha round.

* The Geneva draft even provided for reduction of de minimis support by the developing countries.

The BJP had strongly voiced its opposition to the Geneva Agricultural draft. Sadly, the Hong Kong draft incorporates the Geneva draft as the eventual mantra for global agricultural trade. We are now struck with it and all future negotiations for determining reduction in tariffs as also reduction in trade distorting domestic support subsidies will be on the basis of highly objectionable Geneva draft of August, 2004.

The Left parties, and several other independent observers, have already criticised the Government for its eulogising the Hong Kong draft and the gains for India in Agriculture. The BJP has reserved its comments in order to enable it to carefully study the draft and then offer its well considered reaction.

The Hong Kong draft declaration on agriculture is disappointing. It does not advance the cause of Indian farmers. The Government has yesterday released a four-point gains for the agriculture from the Hong Kong draft. We deal with each of these points.

* De-minimis Subsidy: It is the Government's case that it has been able to secure an agreement that WTO will not come in way of domestic support given to farmers in developing countries like India. The domestic support is given to farmers of India as a transport subsidy. This is no achievement negotiated at Hong Kong. Article 9.4 of the Agreement on Agriculture already protects this as a de minimis subsidy given by developing countries to its farmers.

The upper cap of this subsidy is 10 per cent but India on account of its domestic constraints is not able to provide even three per cent subsidy. The quantum of this de minimis subsidy was fully protected even in the Cancun draft where the talks broke down. The Cancun draft in para 7.1 had mentioned "developing countries shall be exempt from the requirement to reduce de minimis support". However, the Geneva text of August 1, 2004, diluted this position to now read in para 11 "developing countries that allocate all de minimis program for subsistence and all resource farmers will be exempt".

Even the Hong Kong draft provides that developing countries with AMS (aggregate measurement of support) commitments can be asked for reduction in de minimis subsidies. Is it a great achievement that the Government is boasting of?

* Special Products: The Government has claimed that developing countries can now declare appropriate number of special products on a self-selection basis. The declaration of certain number of unspecified products as special products has been part of negotiations at Cancun, Geneva and Hong Kong. What was expected was that the number of special products should have been fixed in terms of percentage either at Geneva or Hong Kong. This could have been a quid pro quo for the letting off developed countries lightly on the issue of subsidy reduction. However, even today we are in the dark as to how many products can be declared as special products. Mere reaffirmation of the expected position is hardly an achievement in agriculture.

* Special Safeguard Mechanism: The special safeguard mechanism is not new to the agricultural negotiations. It has been a part of the failed declaration at Cancun and the declaration at Geneva. It is a defensive mechanism. The Government is claiming that it has created a defensive mechanism to prevent an import surge but the question is why do we fear an import surge? We fear an import surge because in the event of substantial reduction in tariffs which we have agreed in the Geneva draft, reaffirmed in the Hong Kong draft, a defensive shield is required. We have first created a problem for ourselves and are now trying to find solutions to it.

* Export subsidies: The elimination of export subsidies by 2013 appears to be the only major achievement which the Government is claiming in the Hong Kong draft. The Government has forgotten that the very basis of the Doha declaration in 2001 dealt with the elimination of export subsidies. The Doha declaration mentioned that "building on the work carried out and without pre-judging the outcome of the negotiations, we commit ourselves to comprehensive negotiations aimed at substantially improved market access, reduction of export subsidies with a view to phasing out of all forms of subsidies and substantial reduction in trade distorting support".

Thus, the elimination of export subsidies by reduction and eventually phasing out is a part of the Doha declaration. For elimination of export subsidies, developing countries have already paid the price at Doha. What was to be agreed upon was the only potential date of elimination of export subsidies. The life of the Doha round is expected to last till about 2013. The export subsidies had to be eliminated during the lifetime of the Doha round. We have now agreed to their elimination at the fag end of the Doha round virtually taking it to the last date.

The elimination of export subsidies could not have been postponed any more under the Doha declaration. Agreeing to the worst possible date for elimination of export subsidies, a fact which had been agreed upon at Doha, can hardly be an achievement. In any case, export subsidies at about $4 billion are a minuscule percentage of the overall trade support and trade package that the European Union and the US gives to their farmers. Is it the Government's case that no commitments have been made for reducing 97 per cent of the subsidies at Hong Kong and the last date possible for elimination of export subsidies constituting only one per cent of the basket has been agreed upon?

We have agreed to the adoption of a Swiss formula with unidentified coefficients for reduction of industrial tariffs. The basis of the Swiss formula is that those with higher tariffs will reduce more. This inherently means that countries like India with higher industrial tariffs have to reduce more as compared to what our counterparts have to reduce. But the Swiss formula amongst the developing countries hurts India more and perhaps helps countries like Brazil. The Government claims that the concept of "less than full reciprocity in reduction commitments" is a major Hong Kong gain. The Government is conveniently forgetting that this was one of the achievements of Doha where the declaration said, "The negotiations usually take fully into account the special needs and interests of the developing and lean country participants including through less than full reciprocity in reduction commitments."

There is a somewhat curious paragraph 24 of the Hong Kong declaration. It mentions a high level of ambition for market access for agriculture and NAMA. It provides that the ambition is to be achieved in a balanced and proportionate manner. India can have aggressive interest in the services. We can have a relatively more aggressive interest in industrial products which has to be blended in several cases keeping our domestic concerns in mind. Obviously, we cannot have aggressive interest in agriculture. Our interest in agriculture has to at best a defensive one. How can we agree for the same level of ambition of the two sectors? The declaration at Hong Kong overlooks this.

The Government appears keen on marketing the Hong Kong declaration as a spectacular achievement. The reality is that it was never expected to be spectacular result-producing declaration. The oral pronouncements prior to Hong Kong as also at Hong Kong created a comfort level in the country that India's interest would be saved at Hong Kong. There is, however, a visible disconnect between the oral pronouncements and the draft declaration to which India is a party. This indeed is a matter of serious concern.

(Arun Jaitley, MP and BJP general secretary, handled WTO negotiations in the Vajpayee regime)

01-26-2006, 05:08 AM

World Economic Forum kicks off in DavosQUOTELater in the day, attendees were to discuss the emergence of China and India as major players on the global stage, including the former's role in becoming a regional and international leader.

Klaus Schwab, who started the Forum more than three decades ago, announced on Wednesday that he planned to start an annual meeting in China starting in the summer of 2007.

"China will be the home of many of the companies" that are expected to emerge on the global scene, Schwab told reporters. "In some way we are creating a parallel World Economic Forum for the next generation of companies."

Also on tap was a candid discussion on the changing shift in jobs in the future. With an estimated 1 billion workers from emerging economies joining the global labour market, it has created both disruptions and opportunities

01-26-2006, 11:47 PM

'India Everywhere' in the Alps QUOTEDAVOS, Switzerland, Jan. 25 â Delhi swept into Davos on Wednesday, with an extravagant public relations campaign by India intended to promote the country as the world's next economic superstar, and as a democratic alternative to China for the affections of foreign investors.

There were few places one could go, on this first day of the World Economic Forum's annual meeting here, without seeing, hearing, drinking, or tasting something Indian. The organizers call the campaign "India Everywhere" and they appear to mean it literally.

"The last two years, we felt there was too much about China, and India wasn't being heard," said Ajay Khanna, the chief executive of the India Brand Equity Foundation, which is orchestrating the promotion. "This year, we decided to make a major effort to give India a voice
.................................... cont

07-05-2006, 03:01 AM

QUOTERitual sulking 
The Pioneer News Desk
WTO is about negotiations, not tantrums ---- The walkout by Commerce Minister Kamal Nath was not merely the straw that broke the camel's back at the WTO mini-ministerial at Geneva; it was something substantially more damaging. It enshrined the throwing of a tantrum as a ritual at WTO events. Instead of leveraging his position as the principal negotiator representing one of the largest economies of the world, Mr Kamal Nath chose to act as an opposition parliamentarian making a political statement.Â <img src='style_emoticons/<#EMO_DIR#>/thumbsdownsmileyanim.gif' border='0' style='vertical-align:middle' alt='thumbsdownsmileyanim.gif' /> His remark, that "there was no point" in continuing, smacked of a casual disregard of the principles on which GATT was formed, and with which WTO has continued. Just eight days prior to his impetuous and totally unnecessary intervention, he had spoken like a statesman at a press conference in Washington DC, in which he personified optimism and sagacity. And why shouldn't he have? The strategy to forge a grand alliance of 110-member countries headed by India, an endeavour mooted in the early 1990s, had paid off during the Ministerial in Hong Kong in December. He had sounded positive on the 'self selection' consensus by which developing countries could be allowed to specify the areas in which they would not agree on subsidy cuts. In this background, it is difficult to appreciate the reasons for his turn-around half way down the meet. Surely, he was not unaware of the sparks that were waiting to fly at Geneva? After all, the Europeans and Americans had been wrestling over agriculture subsidies since the beginning of the Uruguay Round and many an impasse had been forced upon the movement for free trade over the issue. Understandably, India and the developing world had a fight waiting for them. But, Mr Nath, who is not new to multilateral engagements (he was India's representative to the 1992 Earth Summit), chose grandstanding over diplomacy.

All this may make many wonder about a coincidence. Around the same time as Mr Kamal Nath was authoring the Geneva conundrum, the Prime Minister was performing somersaults with agricultural rhetoric in Hyderabad over the worsening plight of farmers. Could there be a link between the UPA Government's embarrassment over its failure to mitigate farmers' suicides (a 2004 election issue) and a thinly veiled attempt to externalise the responsibility as seen in Geneva? Perhaps, Mr Nath borrowed a page out of the Left's book of tricks, but it will only end up lowering India's prestige. Those who recall Mr Arun Jaitley's prolonged stay at Cancun (in September 2003) to fight over the 'Singapore issues', fail to recognise a strain of continuity in India's behaviour at Geneva. There is a sense of deja vu about the collapse of dialogue; Mr Kamal Nath should have shown more maturity as a negotiator for not only India but the farmers of the developing world.

07-31-2006, 05:57 AM

QUOTEA triumph for vested interests 
Pioneer.com
The collapse of the Doha round augurs ill for the developing and under-developed countries, says AndrÃ© Mejia-Vergnaud

The death of the Doha Round is a victory for rich people in poor countries, farmers in rich countries and many other vested interests. Some even claim it is good for developing countries. The biggest losers, as ever, are the poor, who have no voice.

Mr John Hilary, the policy director at the British NGO War on Want, claimed this week that "the deal on the table would have caused great damage to developing countries." In fact, over the past fifty years, such trade negotiations have gradually removed quotas and reduced tariffs on a whole range of goods. The result has been an increase in world trade and economic development.

But the mystery is that all parties agreed in public that this deal was a good thing. The answer is that all parties had political reasons to make the WTO talks fail.

The deal on the table was a commitment by rich countries to reduce or eliminate their enormous farm subsidies if developing nations opened up their trade. Least Developed Countries had already gained exemption, although they need trade more than anyone.

For anti-trade activists, a good deal would have meant reducing subsidies in rich countries but allowing all poor countries to maintain their own barriers to trade, not only in agricultural products but in many other sectors such as industrial goods, services and - yes, it is hard to believe - medicines.

From the beginning of the WTO's Doha Round in 2001, it was clear that agricultural subsidies in rich countries would be the main issue. These subsidies cause great harm to farmers in poor countries - as well as poorer citizens of rich countries. This taxpayers' money has also created powerful lobbies against trade liberalisation, especially in the EU, the US, Japan and South Korea.

In parallel, vested interests also prevailed in poor nations. Brazil and India, big trade players both, argued that rich countries should remove their subsidies and barriers while allowing poor countries to maintain theirs. Brazil's protectionist attitude was responsible for the collapse of the Free Trade Area of the Americas (FTAA) negotiations in 2003.

Protectionism is superficially and emotionally attractive but it means building up inefficient businesses at the expense of local consumers who could have imported the same thing cheaper and better made. Those inefficient businesses are inevitably run by cronies of the ruling cliques, further strengthening their rule.

Various European countries were quick to take advantage of the confusion - and not just France: The new Eastern European members were enticed in with large grants, while others cling to their old ones. In fact, the EU's current agreements prevent it from even discussing alterations to agricultural subsidies until 2013.

The front man for all this, the EU Trade Commissioner, Mr Peter Mandelson, was not even a full representative with a set mandate: Any EU member state could disagree at any time and derail the whole process. According to the anti-trade activists, charities and NGOs, poor countries win because they can continue to maintain substantial barriers to trade, especially farm trade.

But barriers to farm trade cause artificially high prices of food in poor countries, where malnutrition is a severe problem. Barriers to non-farm products have the same effect. But worse, this protectionism encourages farmers in poor countries to produce uncompetitive, low value products, thus feeding the vicious circle of poverty.

Barriers to trade can even kill. Many poor countries impose heavy tariffs and taxes on medicines, a policy that reduces access to drugs in countries where diseases kill many, especially children.

There are indeed winners in the collapse of the Doha round. Anti-trade activists who claim to speak on behalf of the poor can boast an ideological victory. Politicians can keep their lobbies happy. Subsidised farmers in rich and poor countries will maintain their privileges.

But poor people in poor countries have lost the chance to make, buy and sell goods and services freely and at better prices: They have lost the only way to make poverty history.

(The writer is Director of the Colombian think-tank Instituto Libertad y Progreso, in BogotÃ¡, promoting the institutions of the free society)

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