Global trade: back to the drawing board
The outcome of the 11th ministerial meeting of the World Trade Organization (WTO) at Buenos Aires was on predictable lines. The writing has been on the wall for a long time now. Some serious efforts were made to revive Doha Round negotiations between 2008 and 2011; thereafter, these efforts could succeed only in bringing up selected issues for negotiations in one after the other ministerial meetings. International organizations are adept at creating hype around what they do, howsoever little that may be.
The Bali ministerial in 2013 was unique as it showed how the fear of failure forced leadership on all sides to agree on some outcome. But those were the Barack Obama days. The new dispensation in the US is not that charitable to multilateralism. Bali was followed by India’s dramatic reassertion for resolution on the public stock holding issue, linking it with the implementation of the trade facilitation agreement. India’s enhanced positioning was a reflection of the accession of a new and more assertive dispensation in New Delhi. India very cleverly leveraged its market position to secure a permanent peace clause, recognizing that a large number of members would have been very keen to do business with the new government after relative stagnation over the past few years.
It was, therefore, not a surprise that the membership accepted India’s position and a permanent peace clause was agreed on. It helped the domestic image of the new establishment as well. In trade lexicon, the permanent peace clause was the price for India’s agreeing to the implementation of the trade facilitation agreement. So, a quid pro quo and the deal was over. The developed country membership led by the US, therefore, is not prepared to pay a greater price for converting the permanent peace clause into a rule and thereby removing a structural flaw in the Agreement of Agriculture.
The other old issues on the agenda were of relative insignificance, including the demand for a special safeguard measure (SSM) by a group of developing countries. Since there was no agreement on tariff reduction, SSM was an overstretch by the G-33. However, there were new demands, such as a proposal for beginning negotiations for an agreement on e-commerce and a work programme on micro, small and medium enterprises (MSMEs), etc.
Some developing countries, led by India and China, took a logical position of not agreeing to a proposal such as e-commerce as at the moment it is on the ascendency in the developing world and it would be too soon to start disciplining it because the gains in such a situation would only flow to already established global participants. There are significant issues at the interface of technology-law-business-security and privacy which must be sorted out before any meaningful negotiation can be contemplated on e-commerce. The proposal on MSMEs was too amorphous and woolly. The differences would begin at the definitional level and cover the whole gamut of economic governance.
Since expectations were low, it was a win-win for all those who participated. Some developing countries maintained an obsessive attachment to the Doha Agenda and a ministerial declaration could not come. Those who can recall the Nairobi ministerial declaration would appreciate that divisions had already been formalized on this issue(Para 30,31); for some, it would have been a retraction from their position, and unlikely to happen.
Therefore, if somebody had expected the US to agree to a specific mention of the Doha Agenda, it was a wrong assessment of the realities, given that there was a more hawkish establishment in the US.
There is no doubt that the Doha Agenda is a dream agenda for a developing country as it addresses some of the systemic inequities of the Uruguay Round agreements. But have we not come a long way from 2001, when this Agenda was adopted? Much has happened in the meanwhile that has worked towards rebalancing global trade. Nevertheless, some principles intrinsic to Doha remain equally relevant even now, such as the special and differential treatment of developing countries. What is our ask from the global trading system? Is it not true that several inadequacies in our own policy development and its enforcement are staring at us? Can we talk of regaining competitiveness without addressing many sectoral policies? Don’t we need to bring international trade in the mainstream of our policy discourse and don’t we need to mainstream multiple arms of the government at the federal and state levels in our international trade policymaking and its implementation? Whose baby is trade in the government? Just the department of commerce? Trade is only the front end of a policy and process value chain.
These are just a few questions we need to address before we flog a near-dead horse yet again. We sought protection under Doha hoping that our policies in some critical areas would evolve in the meanwhile. But this incubation has taken much longer. We must prepare our own narrative on where we want to see ourselves in the next decade in the global trade architecture, how we want to influence our development with our trade policies and prepare to mould and influence global policies and institutions accordingly. So it’s back to the drawing board.
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