Looking at WTO with a Congress view
Review by Manju Gupta
The think-tank of Rajiv Gandhi Foundation comprising of parliamentarians, legislators and representatives of political parties, policy makers, the intelligentsia and various interest groups has brought out this well-researched book on international relations and law reforms.
With the sixth ministerial meeting of WTO scheduled for December 2005 in Hong Kong when several contentious issues will need to be sorted out, the relevance of this book is significant.
The first volume of this book containing ten papers addresses issues that are more generic and is therefore sub-titled ?Development through Trade?. The second volume focuses on issues that are more specific and is therefore sub-titled ?Issues at Stake?.
Trade liberalisation is good to some extent as it leads to welfare gains with losses to inefficient producers getting more than compensated by welfare gains to consumers. In the first volume, this writers of respective papers emphasise on free trade and free cross-border movement of labour and capital, advancing that relatively more open economies have higher rates of growth and faster rates of poverty reduction.
Pascal Lamy in his paper on WTO (World Trade Organisation) expounds on the multilateral trade setting that has undergone dramatic changes and yet can deliver the needs of the developing countries. With clearer modalities on agriculture, differences will no longer eclipse work on industrial products, on services and on trade facilitation. He advises on the need for forging a consensus on all major issues in this 148-member organisation where members? interests vary greatly and where consensus-based decision-making procedures are difficult to adopt.
Bibek Debroy has tried to brush up our memory on the conclusions drawn at the ministerial meetings held in Singapore, Geneva, Seattle, Doha, and Cancun.
?The most common observation in the corridors was how was it that a group of countries with such a small share of world trade (African nations account for about 2 per cent of world trade; minus South Africa, the share is less than 1 per cent) could hold up the WTO. The more interesting question to ask about Cancun was why developing countries with a significant stake in the multilateral trading system allowed the process to careen out of control.?
Alan Oxley in his paper criticises Pascal Lamy for calling the WTO a ?medieval institution?. Oxley continues, ?The most common observation in the corridors was how was it that a group of countries with such a small share of world trade (African nations account for about 2 per cent of world trade; minus South Africa, the share is less than 1 per cent) could hold up the WTO. The more interesting question to ask about Cancun was why developing countries with a significant stake in the multilateral trading system allowed the process to careen out of control.? According to him, what is needed is to put the WTO back on track by according priority to issues that contribute most to development and reassert the operational dominance of the key principles?like non-discrimination?that enable the system to promote growth based on exploitation of comparative advantage.? He advocates adoption of more radical action against countries which neither liberalise their own economies, nor let others use the system.
According to Brink Lindsey, international trade agreements can help overcome political obstacles that hinder the opening of markets; also they can consolidate market-opening gains and make them harder to reverse. The proper model for trade negotiations ?is not mercantilist-minded ?reciprocity? but rather ?coordinated unilateralism?.?
Shanker S. Singham and D. Daniel Sokol advise the developing countries to not plead ?for differential treatment? and resist further liberalisation but ?recognise that they, and their consumers, actually can benefit from macroeconomic trade reform and the institution of accompanying microeconomic competition policy? as these will help in lowering prices and providing greater choice.
Saman Kelegama says that regional trade arrangements will become ?building blocs of the multilateral trading system and de-politicise the international trading environment.?
Razeen Sally says that ?unilateral liberalisation and pro-competitive domestic regulatory reforms, now, as in the nineteenth century, should occupy centre-stage? and ?with the right market-access focus and workable decision-making, it (WTO) can bolster domestic market-based reform efforts, particularly in the developing world, and help keep up the momentum of global trade liberalisation according to non-discriminatory rules.?
In Volume II, specific issues like anti-dumping, trade policy reviews and dispute resolution or differential treatment apart from other related issues are discussed. Lawrence Saez has shown that GATS (General Agreement on Trade in Services) and TRIMS (Agreement on Trade Related Investment Measures) have served as a platform towards enabling a better investment climate worldwide and has discussed some of the obstacles that remain in place relating to improvement of a solid investment climate.
Rupa Chanda has talked of India'sstake in the WTO and its initial defensive position on services and subsequent change in its attitude regarding trade and investment liberalisation in services due to the growing importance of the service sector in India'seconomy and its trade and investment flows. This paper is specifically devoted to India and is of greater interest to us. She points out, India ?will need to address issues of standards, quality of training and infrastructure, and mutual recognition if it is to exploit its potential and gain from any liberalisation of market access.?
Prabhash Ranjan and Aparna Shivpuri feel that the ?fear or apprehensions of developing countries on the issue of sovereignty vis-?-vis GATS is magnified and largely unfounded and misplaced.?
Amir Ullah Khan, in his paper on protection of intellectual property, gives some valuable arguments and counter-arguments on the benefits and disadvantages accrued from free access to foreign technology. He however fears that due to the many grey areas in intellectual property rights, cross-border litigations will increase. He says, ?The turmeric case, which ended in a ruling in India'sfavour, is only one example of this.? He therefore advises India to move forward instead of looking backwards on what all has happened.
Mohammed Saqib has presented a paper which holds relevance for developing countries. He stresses on maintenance of standards of products, particularly with the decline in the traditional barriers to trade. He says, ?There is need for developing countries (as well as their exporters) to be proactive when facing new food safety and agricultural health standards. The governments as well as private players should understand that new food safety standards are a reality and there is no other way but to comply with them.?
(Konark Publishers, A-149 Main Vikas Marg, Delhi-110092.)