The Doha Round of talks of the World Trade Organisation (WTO) faces a new challenge and if some statements emanating after the General Council meeting on July 25 at Geneva are to be taken at face value, this could derail the process of trade liberalisation through a multilateral route for some time.
Many countries will, as is often their wont, squarely blame India for walking away from the done deal at Bali on trade facilitation. What, however, is important to note is that India has not shied away from a trade facilitation agreement, but sought a "balanced outcome" that brings the decision on public stockholding for food security concerns on top of the agenda as well. It has reiterated its commitment to a robust trade facilitation agreement as long as its food security concerns are addressed in a balanced manner.
India's firm stand has surprised many. But what seems disquieting is the lack of understanding on the part of some large countries on the need for preparatory meetings, before the July deadline neared, with the new Indian government to understand the current view on the issue. This was especially important given the strong stand taken by the Bharatiya Janata Party - the largest party in the current ruling coalition at the Centre - after the Bali declaration was signed.
Arun Jaitley, who was the leader of the Opposition in Rajya Sabha when the Bali declaration was signed, had raised some direct questions, especially on the issue of food security and had stated that the declaration of December 2013 was "adverse" to Indian interests. His statement was clear that "trade facilitation is a part of single undertaking by which issues of market access and subsidy elimination had to be jointly tackled". This sentiment is reflected in New Delhi's statement at the recent General Council meeting, which states that "India is of the view that the Trade Facilitation Agreement must be implemented only as part of a single undertaking including the permanent solution on food security".
It may be natural for WTO member countries to think that, once agreed, India will be bound by the declaration. But what they seem to have overlooked is that for India this is more than just a basic trade concern. It is a livelihood concern and has the potential to take away policy space for the new government in its overall thrust for inclusive growth. There was, therefore, a need for governments to consider holding early discussions and allay fears on the commitment to achieve a balanced outcome.
There was a feeling among WTO members that India would eventually fall in line by the General Council meeting of July 25. The Brazil, Russia, India, China and South Africa (BRICS) declaration, as was pointed out by a trade negotiator of a developed country, accentuated the feeling that other BRICS countries had coerced India to accept the inevitability of agreeing to annex the trade facilitation agreement to the WTO Agreement by July 31. But a close look at the BRICS declaration shows that India had kept its options open.
The Fortaleza statement said that "in reaffirming our support for an open, inclusive, non-discriminatory, transparent and rule-based multilateral trading system, we will continue our efforts towards the successful conclusion of the Doha Round of the WTO, following the positive results of the Ninth Ministerial Conference (MC9), held in Bali, Indonesia, in December 2013. In this context, we reaffirm our commitment to establish by the end of this year a post-Bali work program for concluding the Doha Round, based on the progress already made and in keeping with the mandate established in the Doha Development Agenda. We affirm that this work program should prioritise the issues where legally binding outcomes could not be achieved at MC9, including public stock-holding for food security purposes. We look forward to the implementation of the Agreement on Trade Facilitation. We call upon international partners to provide support to the poorest, most vulnerable WTO members to enable them to implement this Agreement, which should support their development objectives". The Indian position at WTO is similar to this one.
Hopefully, the crisis will not derail the WTO process of trade liberalisation, but will help member countries understand each other's concerns better.
The writer is Principal Adviser at APJ-SLG Law Offices
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper
