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G. Srinivasan

The differences among G-8 countries over security and political issues can spill over into the economic arena, exacerbating trade frictions and clouding the global economy. The G-8 Summit will also be a precursor to the WTO Ministerial meeting in Cancun, Mexico in the second week of September, where the contours of the Doha Development Round will have to be smoothened, says G. Srinivasan.

THIS year's G-8 — to be held in the picturesque French spa city bordering Switzerland, Evian, from June 1-3 — is of special interest to India. This is the first time that India is being invited among a dozen countries to take part in the deliberations of what is basically a structured dialogue among the world's developed countries led by the US and its West European allies, besides Canada, Japan and Russia.

Apart from India, China, Malaysia, Nigeria and South Africa are the other constituents of the 12 that have been invited for the G-8. The Prime Minister, Mr Atal Bihari Vajpayee, is on a three-nation tour, will take part in the Evian Summit on the last leg of the journey.

Coming as it does during a disruption of relations among leading lights of G-8 in the wake of the Iraq war and the elements of post-war planning, the Evian meeting is the first conclave of heads of state and government, including those who have vehemently clashed with the US over the Iraq war.

The differences among G-8 countries over security and political issues could well spill over into the economic arena, exacerbating trade frictions and clouding the global economy.

The G-8 summit will also be a precursor to what is billed as the crucial Ministerial meeting of the World Trade Organisation (WTO) in Cancun, Mexico in the second week of September, where the contours of the Doha Development Round will have to be smoothened.

A negotiation timetable will also have to be set for various liberalisation measures on both goods and services as also the so-called Singapore issues comprising competition, investment, trade facilitation and transparency in government procurement.

It will be interesting to trace the genesis of the G-8 as an institution functioning at the highest level of decision-makers whose move, one way or the other, has wider repercussions on the rest of the world.

Since 1975, the heads of state or Government of the six major industrial countries have been coming together annually to deal with the major economic and political issues facing their domestic society and the global community.

The first summit was held at Rambouillet, France in 1975 where, besides the host country, the US, the UK, Germany, Japan and Italy took part. They were joined by Canada at the San Juan Summit of 1976 in Puerto Rico and by the European Community at the London Summit in 1977. Beginning from the 1994 Naples Summit, the G-7 met with Russia at each other summit (referred to as the P-8 or Political 8). At the Kananskis Summit in Canada last year, it was announced that Russia would host the G-8 Summit in 2006, thus completing the process of becoming a full member.

In all, the G-8 Summit always and consistently dealt with macroeconomic management, international trade and relations with developing countries. Questions of East-West economic relations, energy, and terrorism have also been of recurrent interest.

From this preliminary foundation, the summit agenda broadened to include micro-economic issues, such as employment and the information highway; transnational issues, such as the environment, crime and drugs, and a host of political-security issues, ranging from human rights through regional security to arms control.

A spate of preparatory meeting precedes the summit so that as leaders gather together the agenda and the action plan will be in place. G-8 Finance Ministers met in Washington a couple of months ago and also in Deauville on May 17 and reaffirmed their commitments to combat terrorist financing.

Their statement at the end of the meeting referred to thus: "We are at a turning point on development as on trade issues. We owe it to developing countries to take up our responsibilities. We are determined to achieve the objectives and overall timetable set out in the Doha Development Agenda, and to ensure that the Cancun ministerial takes the decisions necessary to reach these goals".

This was followed by the G-8 Foreign Ministers conference in Paris on May 22-23 to discuss major regional as well as security issues encompassing fight against terrorism, non-proliferation, small arms and light weapons, North Korea, Iran, Colombia and SARs.

On the recent peace initiative in India and Pakistan, the Foreign Ministers voiced hope that "a political process would develop between the two countries aimed at resolving all their differences through dialogue in the spirit of Simla and Lahore Agreements".

Earlier, Environment Ministers of G-8 met in Paris on April 25-27, while Ministers in charge of development cooperation met in Paris on April 24 to discuss official development assistance, water, social and human development issues that have a vital bearing on the developing world.

No doubt, the G-8 provides a crucial forum for busy leaders to discuss major and often complex global issues and foster the personal relations that help them respond in an effective and collective manner to abrupt crises and shocks.

As the Summit also gives direction to the global community by setting priorities, defining new issues and providing guidance to established international organisations, the presence of a clutch of developing countries, including India, during the G-8 conclave of world leaders will help narrow down priorities.

As of now, the run-up to Cancun bristles with the lack of cohesive approach and differences remaining uncovered on contentious issues of common concern to both developed and developing countries with the dice heavily loaded against the latter in terms of any meaningful move on various issues. These include agricultural subsidy in the rich world, which distorts the world's grain market to the dismay of exporters of farm products from the developing world, special and differential treatment (S&D) to the developing countries, implementation issues of the Uruguay Round and concern on public health and intellectual property rights, leave alone the so-called Singapore issues of investment, competition, trade facilitation and transparency in government procurement and reduction commitments in industrial tariffs.

It is not for nothing that, in a recent message to senior officers of the WTO, IMF and the World Bank, the UN Secretary General, Mr Kofi Annan, said: "For many years now, developing countries have been encouraged to eliminate subsidies as a basic step in getting their fiscal house in order, which would in turn create the necessary conditions for growth. Yet the developed countries persist with agricultural subsidies and tariffs of their own against the exports of developing countries, offsetting or even undoing the benefits of other forms of cooperation with those same countries."

The WTO Director General, Mr Supachai Panitchpakdi, warned that missing the November 2003 deadline for completing the Doha Round would be damaging for the global economy.

There was no reason to miss the target date unless governments decide that their political will to complete the exercise is no longer there, he warned.

Viewed against the concerns voiced by the top brass of the UN and the WTO about the need to push ahead in areas of interest to the developing world to make the Doha development agenda a veritable development round, the progress remains halting as far as the big players and trade majors are concerned.

As it is, agriculture is widely seen as the make-or-break issue of the Doha Round of trade talks with the European Union (EU) coming under heavy pressure from its own trading allies to rein in the excesses of its costly Common Agricultural Policy (CAP).

Europe's heavily subsidised farm regime has drawn derision and odium from both the developed and the developing countries with the big farm exporters, such as the US, Brazil and Australia frowning upon the EU for dumping its oversupply on world markets while simultaneously erecting big barriers to foreign imports of the same.

Whether the EU constituents of the G-8, such as Britain, France, Germany and Italy, will be favourably disposed to make a modest start on the road to reform of agricultural subsidies is anybody's guess.

But that does not, and ought not to, keep the rest of the trade majors, such as the US, and also countries like India with exportable grain surplus from pursuing and persuading the EU to show some positive results in this regard in the overall interest of registering some headway for the Cancun Ministerial.

Again, in its last year's G-8 summit in Canada saw renewed commitment to the New Partnership for Africa Development (NEPAD), launched in 2001 with a view to promoting an African solution to the myriad problems plaguing the continent.

The latest African Economic Outlook (2002-03) released by the Paris-based OECD, a club of rich countries, referred to how the need for improved governance is more and more at the top of policy debates in Africa.

In particular, achieving good governance is considered in the NEPAD initiative as one of the most pressing issues on which African governments can and need to make progress.

It is time the G-8 leaders found time to return to this theme with some focussed attention so that the African continent does not get bypassed by what is sweeping the rest of the world in terms of liberalisation, deregulation and tangible improvement in living standards.

The free world leaders have enough on their plate to chew on and come out with workable solutions so that a modicum of relief is extended to the world's poorest of the poor.

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