Stop Free Trade Agreements, KV Biju, Kurukshethra Prakasan, Pp 167, Rs 125.00
IN this book, activist and academic Biju tries to expose the ‘sinister designs’ of the Government of India and its corporate henchmen in concluding ‘dangerous’ bilateral free trade agreements, especially with the European Union. He describes these bilateral free trade agreements as being equivalent to WTO plus having conditions that are harsher in comparison to the WTO agreement. The author fears that Indian farmers and the micro, small and medium enterprises which provide the largest employment and livelihood opportunities to the bottom of the pyramid people will be greatly hit by these bilateral free trade agreements.
Biju says that enticed by WTO agreements and indiscriminate opening up of the economy to multinational corporations, the nation has witnessed its worst in the post-globalisation era in terms of the fast decline of agriculture and small-scale sector, leading to decline in per capita production of almost all agricultural commodities. He sees unemployment on the rise and desperate farmers and other vulnerable groups being pushed to death, either naturally or by suicide. While WTO was propagated as the mantra for free trade, it is dying its slow death owing to its own contradictions and exploitative nature.
Trade policy is an important tool at the disposal of the government that determines not only what the country trades but what it produces and who benefits from its production. The trade policy determines which products India can import from abroad and what it can domestically produce. It has a critical link with the manufacturing sector. With India having signed the Free Trade Agreements (FTA) with numerous countries (many more are being negotiated, as with the European Union and EFTA blocs), the FTA negotiation is far less open as the draft texts of agreements are kept under wraps, thus preventing easy access to important assessment studies.
Biju discusses the concept of swadeshi in respect to the free trade agreements and says we seem to have forgotten Mahatma Gandhi’s emphasis on swadeshi goods. Free trade allows no restrictions on the movement of goods between countries and complete freedom of international exchange. This allows trade without any tariffs, quantitative resections and other devices obstructing the movement of goods. He cites reasons for the dangers of entering into free trade with developed countries because FTA cover issues beyond trade in goods – like investment liberalisation and protection of investor rights, intellectual property, government procurement competitive policy, labour and environment standards. Developing countries suffer losses when entering into bilateral trade with developed countries and various examples are cited by the author to justify his reservations on trade with them.
The most interesting chapter in the book is where he expounds on the general disadvantages of free trade and these include underdeveloped countries remaining as they are as they do no get the opportunity to develop their agriculture or industries as products are available at a cheaper rate due to large-scale production in advanced countries. Secondly, free trade makes the free trade countries politically and economically interdependent or lose their independence. Thirdly, it is necessary to limit goods from other countries as it will involve huge amount of payment in foreign exchange.
Then who are the beneficiaries of free trade agreements and globalisation? Undoubtedly, it is the MNCs and countries where democratic rights are not established. This is true of China, Myanmar and some Arab nations, especially China which is the biggest one because, to capture the international market, the country has started factories that are exclusively meant for products meant for export.
Products coming through ASEAN countries with no duty paid are dirt cheap on arrival. With such duty free imports made possible, it is no wonder that our products are uncompetitive. Our policy planners should sit up and ponder.
(Kurukshethra Prakasan, Kaloor Towers, Kochi-682 017; www.kurukshethrabooks.org)