The Hindu Business Line : Little unity within WTO

Even when the restrictive pressures on trade were not as prominent as they are now, WTO members were not inclined to concede an inch in return for a couple of feet, in a manner of speaking.

The Commerce Minister, Mr Anand Sharma, and the WTO Director-General, Mr Pascal Lamy…Only united action on the part of the world community can open up the channels of trade.

Ranabir Ray Choudhury

Immediately after the UPA won its impressive mandate last month, the WTO Director-General, Mr Pascal Lamy, made the right noises in his welcome remarks for the new Manmohan Singh Government.

Among other things, he said that India was a “key WTO member and (had) been actively engaged in the Doha Round since its launch in 2001”.

The election results “had given a clear vote of confidence to the Congress Party and its allies”, which was a good thing because the WTO “(needed) a strong India and, likewise, India (needed) a strengthened WTO”.

In the same statement, however, the WTO chief indicated indirectly that a long way is yet to be travelled to get the organisation’s members together before the Doha Round could take off, which while not invalidating his remarks on India’s election results has pretty well taken the sheen off them as far as the link between the poll results and the Doha Round is concerned.

This is not something that should make anyone happy because there is no doubt that the future health of the international economy is closely tied to the healthy prospects of world trade, and that greater the exchange between economies by way of free and fair trade, better the chances of an improvement in the general standard of living of people everywhere, especially of those in the developing countries.

Wasted efforts

Indeed, ever since Mr Lamy took over the mantle of the WTO Director-Generalship three years ago (he has been given a fresh, full-term very recently), he has striven hard to get the Doha Round off the drawing board, as has also his predecessors.

But the fact remains that the efforts have not paid off substantively, in the sense that a Doha Round has not been agreed upon despite the passing of several deadlines which, among other things, suggests that deep-rooted objections and differences remain among the WTO members on the path international trade should traverse during the next few years.

In fact, meetings after meetings have been held on very basic issues pertaining to international trade in the spheres of agriculture and industrial products, which have ended without any decisive progress being made.

It is clear that without such progress there can be no real movement on the Doha Round, quite irrespective of whether individual member countries have strong Governments or not.

This, in fact, was strongly hinted at by Mr Lamy himself in the statement on the Indian elections when he said it was still “premature to think of dates to convene a ministerial/mini-ministerial to conclude the Doha Round” because the entire issue revolved around “substance rather than timing”, and that there was still a long way to go before a substantive justification could be put forward for the staging of such an event.

As Mr Lamy said, “every day that passes without a deal is a lost opportunity, but I also believe that we need to get the substance right”, for which the negotiators “had to roll up their sleeves and start re-engaging in earnest to solve the remaining issues”.

Holding firm

In fact, after reading this last exhortation, one gets the distinct impression that nothing much has been achieved in the years of negotiations that have receded into the pages of history as far as getting the Doha Round off the board is concerned.

A large part of this body of negotiations has taken place much before the economic crisis currently enveloping the world. Even at that time, when the restrictive pressures on trade were not as prominent as they are now, WTO members were not inclined to give even an inch across the table in return for, say, a couple of feet, in a manner of speaking.

For them nothing less than a yard or two in return would have been considered satisfactory, one justification for this negotiating stratagem being that the rich had a moral obligation to concede more to the poor than the poor of today could give to the rich, mainly because of the burden of history in the course of which, as it is widely acknowledged, the developed nations of today had exploited the colonies of yesteryear to attain their current developed status.

Today, when international trade has plunged because of the recession across the globe, it is unthinkable on the part of any of the groups involved in the tortuous negotiations to encourage imports because of the urgent need to keep the domestic wheels of industry moving, which would slow down if imports were to enter the domestic market in an enhanced flow.

What this means is that the prospects of the Doha Round negotiations are now even more bleak than previously and that no matter what Mr Lamy says in an optimistic vein, the shutters today are even more firmly down as regards a successful outcome of the Doha Round is concerned.

Perhaps this is why no stone is being left unturned by the WTO outfit in Geneva to whip the horse into motion, as it were, and convey the impression that things are pretty much normal.

It is only this reading that seems to throw some light on the WTO General Council’s recent decision to hold the Seventh Session of the Ministerial Conference in November-December.

The general theme for discussion would be “The WTO, the Multilateral Trading System and the Current Global Trading Environment”.

Clearly, with things going the way they are, it was perhaps felt that something needed to be done to keep the WTO flag flying high, even if that meant having recourse to mechanistic gestures such as going back to the text of the Marrakesh Agreement to justify the decision to hold the Seventh Session of the Ministerial Conference.

As the Chairman of the General Council, Mr Mario Matus, said, “The intention is simply to fulfil the Rules of Procedure agreed for sessions of the Ministerial Conference, adopted by the General Council in January 1995.

These, following on Article IV of the Marrakesh Agreement establishing the WTO, provide that “[r]egular sessions of the Ministerial Conference shall be held at least once every two years” (the last session was held in Hong Kong in December 2005).

Widespread mistrust

Sometimes, one imagines, mistrust among different countries and blocs of countries of the motives of the “other side” has become the rule rather than the exception in the negotiating portals at the William Rappard Centre in Geneva.

If this is indeed so, nothing could be more unfortunate and devastating for the prospects of international trade because it is clear that only united action on the part of the world community can open up the channels of trade, which is so essential for a much-needed improvement in the general welfare of the citizens of developing economies.

The depths to which matters have sunk may be adequately gauged from the fact that the emphasis of the Seventh Session of the Ministerial Conference will be, in the words of the General Council Chairman, on “transparency and open discussion rather than on small group processes and informal negotiating structures” — which tells us a lot about the state of unity within the WTO.