Cloud over WTO talks has silver lining for third world
New Delhi, August 8:
Ok, so the recent trade negotiations at the World Trade Organisation (WTO) in Geneva failed but the affair also had a great outcome, at least for India and other developing countries, given the state of play.
The collapse of the talks has meant that developing countries have united against rich nations and prevented them from concluding a trade deal that would have been one-sided. The tough stance taken by Indian interlocutors led by commerce minister Kamal Nath and their counterparts from China led to vociferous complaints by the US and the European Union over the intransigence of these two emerging economies that did not accept the terms laid down in the draft agreement on agriculture.
Many years ago when the Uruguay Round was being negotiated, developing countries got the short end of the stick mainly because most of them did not understand the technicalities of the deal. The world trade scenario has changed enormously since that time and developing countries are now realising that not only do they have a voice but also enough muscle, if they remained united, to ensure their concerns are brought on board.
In the latest round of ministerial negotiations, India was adamant that it would not agree to drop the provision for special safeguard mechanisms (SSMs) that will allow developing countries to use tariffs to protect their farm commodities from cheaper imports. In addition, neither India nor China — nor other developing countries — was satisfied with the extent to which developed countries had reduced their trade distorting subsidies on agricultural products. The rich countries, on their part, felt that developing economies were not opening up their markets sufficiently and this would in turn impede global trade flows.
The unity of the third world in recent years has baffled the US and EU trade negotiators. Trade diplomats have conceded that it is a completely different ball game from the one played out during the previous Uruguay Round. Issues that could have easily been pushed on to to the table and squeezed into the final pact are now simply unacceptable to the developing
Credit for the unity goes the troika of India, Brazil and South Africa which has been holding consultations for the last few years before any ministerial or mini-ministerial to ensure that the common concerns of the developing world are not ignored at the negotiating table.
It is on agriculture that developing nations have drawn the line — thus far and no farther. Both India and China have pointedly stated that there can be no discussion on livelihood issues that affect hundreds of millions of farmers in these countries.
Failure of the mini-ministerial is not the end of the road for Doha Round. It just means negotiations will resume after a while with the aim of finally reaching some sort of consensus.
There is little hurry just now since the US presidential elections are being held at the end of the year. Once a new US administration is in place, trade talks are likely to move forward once again.
However, developing countries have made their point. They will not be bulldozed into any kind of trade agreement. It must be one that balances interests of the rich and the poor globally.