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World Trade Organisation: Implications
for Indian Economy
The rich nations want open access to every market, while protecting their own agricultural and industrial interests. They want developing countries to export like mad to pay off their debts and raise the level of workers’ rights...and all this at zero cost. The vast majority of developing nations have opened up their economies and introduced trade liberalisation often at great human and social costs. For some of the poorest nations, the cost of implementing trade commitments can be more than a whole year’s budget, but time and again they have found the results disappointing. The economic paradise promised by unlimited, uninhibited and inescapable global trade has proved illusory. A small number of developing nations has, however, made the best of the liberalisation regime. To them, the World Trade Organisation has been the saviour. The Hong Kong Ministerial meeting of the WTO commences on December 13. For several months now, the negotiations are deadlocked on the whole gamut of issues and on all possible fronts, including tariff-reduction formula, special production, subsidy reduction and special safeguards mechanism for the developing world. Last-ditch attempt is being made to breach the differences and arrive at some broad convergence of views in Hong Kong, but so vast is the gap between the developing and the developed countries that perhaps no amount of back-channel diplomacy, pressure tactics or concessions would bridge it. The European Union is not prepared to accept deeper cuts in farm subsidy and Brazil and India have refused to offer any higher tariff cuts in agriculture. It wouldn’t be surprising, if Hong Kong goes the Cancun way. One thing is, however, clear`85 that WTO’s paralysis is not good news for either side. The book covers complex issues like the much-debated Agreement on Trade-related Investment Measures (TRIMS), Trade Related Aspects of Intellectual Property Rights (TRIPS), Copyright Act etc., besides WTO’s history and progression and the challenges before the referee body in global trade disputes. This encyclopaedic publication contains answers to practically all-possible queries about the WTO and global trade. R. A. Mashelkar, Director-General of the Council of Scientific and Industrial Research, notes in his foreword: "It is a very comprehensive document, so assiduously put together and presented with appropriate case studies." The debate is still continuing in India and elsewhere in the developing world whether the price one has to pay for joining the WTO outweighs the gains. The experience of two decades shows that this debate is largely rhetorical, as 148 countries have already joined the global body and dozens, including Russia, are waiting in the wings. It may not be a perfect body, but it is indispensable. As P. K. Vasudeva maintains: "The WTO could exercise greater discipline in agricultural trade, especially due to its dispute-settling mechanism." It has been instrumental in the opening up of markets in some of the highly "protected" countries like South Korea, Japan and the European Economic Community. Scores of major agreements have been successfully negotiated under the auspices of the WTO. The Agreement on Agriculture (AoA) provided "a level playing field to traders in agricultural commodities". It is "endowed with a stronger dispute-settlement mechanism" compared to GATT. Perhaps the strength of WTO lies in the provision of "one member, one vote’ which, Vasudeva says, "distinguishes this organisation from the Breton Woods institutions". Vasudeva paints a rosy picture of the WTO framework, which not many are likely to share. Despite the "one country, one vote", the developing countries have been waging an uneven battle in the global body that is supposed to offer them a level playing field. The impression in the developing world is that the developed world browbeats the global body to suit its interests. What it gives the developing world by one hand in the WTO, it takes away by the other in the Regional Trading Agreements (RTAs) and bilateral Free Trade Agreements (FTAs). These involve obligations that have been carefully avoided in the WTO. While the US and the European Union, whose farmers are among the world’s most protected, refuse to budge on the issue of agriculture (thereby virtually paralysing the WTO), they have been eroding the global body by using mechanism under the RTAs, and FTAs to extract unfair concessions from the developing countries, which defeats the WTO mandate. By joining NAFTA, Mexico hoped to transform itself, but its economy has been devastated. It has no doubt increased its exports of fruits and vegetables, but it now imports more corn, which was the mainstay of its agriculture. In the countryside, nearly 1.7 million jobs have been lost. After the NAFTA embrace with the "colossus of the North", Mexico has ended in tears. Perhaps the greatest merit
of the book is an elaborate elucidation of the vast array of issues and
complex dispute-settling mechanism in easy-to-understand terms. The
graphics have been imaginatively prepared, but all this is too
textbookish. The book is strong on details, but weak on analysis. It
lays out an elaborate meal on the table without hinting what are the
most delicious items on the menu. |
THE
neo-Liberals have made a god of market. The globalisation zealots are
never tired of chanting the market mantra that unhindered trade and the
resultant tide of prosperity would lift all boats. While it has taken
almost a century for the US to reduce tariffs, the developing world is
being asked to end protectionism overnight.