A Tale of Failed Talks
Dr. Ashwani Mahajan
On the night of July, 29, 2008, a news flashed that World Trade Organization’s Mini Ministerial talks have failed. These talks started on July, 21, 2008. It was told that Indian delegation demanded for reduction in heavy subsidies, especially trade distorting subsidy being given by developed countries to their agriculture. These nations were not ready to reduce their subsidy, nor were they ready to accept special security measures (SSMs) for security of farmers, as per the demands of developing countries.
WTO came into existence on Jan, 1, 1995. Prior to WTO, world trade was guided through General Agreement on Trade and Tariff (GATT). On the outset GATT was constituted in order to give boost to international trade, which was disrupted due to Second World War. Eight rounds of talks were made under GATT. In the first seven rounds, general talks and negotiations were made to boost world trade by reducing tariff and scaling down of non-tariff barriers.
During the course of eighth rounds of WTO negotiations, four new issues were added namely agriculture, services, investment, and intellectual property. This was now decided that countries would be bound by the decisions taken under the GATT. A dispute settlement mechanism was set in place. All this was included in the Final Agreement and thus came into existence the World Trade Organization. Since then six Ministerial Conferences have so far been organized in WTO. In each Ministerial Conference, discussion is made for future course of action based on the consensus reached earlier. First Ministerial Conference took place in Singapore and second in Geneva in the years 1996 and 1998 respectively. In both these meetings things went on ‘smoothly’ and wishes of developed world were fulfilled to a large extent. In the meanwhile developing countries were forced to reduce their tariff and remove quantitative restrictions on their imports. Nations who were not following the dictates of WTO, faced penal actions.
It was during this time when India also reduced its tariffs and removed quantitative restrictions. Prior to WTO, there were more than ten thousand items on the import of which, quantitative restrictions were in place. Government could block import of any or all these items. But by the year 2000 all these quantitative restrictions were done away with and at present the situations is that we cannot restrict import of any commodity. Many more issues including ‘agriculture’ were added in the negotiations. Prior to WTO, agriculture was not a part of trade negotiations. Inclusion of agriculture in trade negotiations affected agriculture adversely in majority of the developing countries and this led to people’s outburst against WTO. This anger was demonstrated during third Ministerial Conference at Seattle, USA. Seattle Conference was called off due to large scale demonstrations of farmers and NGOs from all over the world. Perturbed by these demonstrations, next Ministerial Conference was organized at Doha in the State of Qatar, where it was impossible to hold any demonstration. But mounting people’s pressure in developing countries, forced their representatives to put up their case strongly and Doha ministerial is known for its ‘declaration on public health’ and notable emergence of issue of agricultural subsidies by developed countries at the forum of WTO. Fifth Ministerial Conference was organized at Cancun, Mexico and people’s anger was once again demonstrated there. Sixth Ministerial Conference was organized at Hong Kong and it was decided that issues would be sorted out in the next six months, and ‘Agreement on Agriculture’ would be finalized shortly. But since then no consensus could be reached so far, thanks to strong positions and adamant behavior of USA and European countries. Failure of Mini Ministerial at Geneva has once again demonstrated the contradictions in this multilateral trade body, that is, WTO.
Indian delegations courage to stand firmly despite pressure from developed world is commendable. Even before this meeting started on July, 21, 2008, pressure was being put on India to concede before the wishes of USA, EU and other developed countries giving huge subsidies to their farmers. They want that India and other developing countries allow free import of agricultural commodities. Problem of developing countries including India is that if this demand is conceded, farmer’s security and thus food security would be endangered. The question is of livelihood of millions of our farmers. Developed countries are not ready to concede to the special security measures (SSMs) as wanted by developing countries. Pressure on India could be easily understood that US President Bush called our Prime Minister not once but thrice, asking for the success of trade talks.
This is pointing to the one point agenda of the government in the trade negotiations i.e. to obtain SSMs and discard other important issues in agriculture, Non – agriculture market access (NAMA), services and TRIPS. Importance of the SSM for safeguarding the livelihood needs of Indian farmers can not be denied. However, it is not the only provision which is going to safeguard the interests of India in the multilateral trade negotiations. India needs a series of provisions to safeguard its interest in agriculture, NAMA, services and TRIPS
All this demonstrates that whole of government’s attention was centered on the issue of special security measures and all other issues including non-agriculture market access (NAMA), services and other issues in agriculture were not in their priority. They were either conceded before developed countries or there was lack of commitment on these issues. Government reduced its demands on special products and our earlier demand of at least 20 products to be treated as special products, was not pressed when WTO’s Director General Pascal Lamy suggested for 12 products. In case of NAMA, developed countries formula was largely accepted, which may endanger our industry. Reports were coming in that government has agreed to open up many services for foreigners. There was also no discussion even on amendment of TRIPS Agreement as demanded by India, which is of prime importance for our public health.
