TNC Rajagopalan: Trade policy should aim at prosperity in S Asia

EXIM MATTERS

Commerce Minister Kamla Nath has said the national foreign trade policy to be announced on August 31 will go far beyond the Exim Policy and set the future direction.

Much of what he says on August 31 might be dismissed as mere statements of intentions and he might even draw criticism for traversing beyond his domain. Yet, the national foreign trade policy need not be all that pointless. It can be mounted on solid pillars.

The first pillar should be "peace and prosperity in south Asia through trade". The policy can link our future inexorably with that of our immediate neighbours and create a vested interest for peace through trade.

It can unveil the roadmap for intertwining the incomes of people of India, Pakistan, Bangladesh, Nepal, Bhutan, and Myanmar through progressive breakdown of restrictions on trade in goods and services, investment opportunities and freer movement of people.

It can spur meaningful initiatives for greater co-operation based on mutual trust amongst the neighbours in many more areas beyond trade, such as regional security, efficient use of resources, equitable economic growth and shared prosperity.

The commerce minister can back up the policy with concrete measures to unilaterally open up for our neighbours select services sectors like professional services, computer and related services, research and development services, other business services like management consulting services, technical testing and analytical services, environmental services, health services and education services.

The second pillar should be "synchronisation of globalisation and development strategies."

The policy can spell out trade policy tools supportive of development efforts in a globalising economy. It can outline steps to mesh trade policy with domestic policies relating to agriculture, environment, competition and labour.

It can envision development and diversification of the commodity sector; promoting risk management against commodity price fluctuations and means to address constraints faced in responding to environmental challenges.

The minister can march towards building autonomous institutions with the public-private participation to research multilateral negotiations issues and deal with them; to research intellectual property issues and handle them; to study and suggest measures to curb cross-border anti-competitive practices; and to establish linkages between trade and rural income and the related transmission mechanisms.

The third pillar should be "development through investment, enterprise and technology". The policy can stress the need to analyse trends in foreign direct investment and its impact on development and to understand the issues involved in international investment agreements so as to attract and benefit from foreign direct investment.

The minister can outline steps to enhance interaction between domestic and foreign investment, to assist capacity-building efforts, to develop small and medium-size enterprises in a globalising economy, support efforts to respond to technological and scientific changes and develop policy instruments to facilitate technology transfer.

The fourth pillar should be "services infrastructure for development, trade efficiency, and human resources development".

The policy can say how to facilitate international trade through better use of information technologies and management systems in trade-supporting services and encourage capacity-building activities and training in these areas.

tncr@sify.com