GAINS AND LOSSES FROM THE WTO
Raghunath Rau*
The World Trade Organisation (WTO) ministerial meeting at Doha, Qatar, earlier this month led to a lot of fireworks in India, much ahead of Diwali. Many political groups, especially among the Leftists, questioned the very validity of the WTO vis-a-vis India while others insisted that the whole process would be beneficial to India for it would help the country gain a more viable toe-hold in international markets.
Inevitably, it was left to the Union Commerce Minister, Shri Murasoli Maran, the leader of the Indian delegation, to carry the can, as it were. In a sense, he was bound to be damned if he did, and damned if he did not, given the political divide in the country on the issue.
On the whole, one must feel that the Minister conducted himself fairly well in the matter, carrying both sides with him. Initially, to be sure, he may have ruffled a few feathers in the Western camp by threatening to walk out fro the meeting altogether if Indias economic concerns were not attended to properly.
But that may well have been a tactical move. For, in the end India did gain quite a bit of what it was looking from the conference on various issues. Of course, there were some losses also. But that was inevitable considering the vast group of 144 nations, most of them having disparate interests, either singly or collectively in small groups, all of them involved in hard bargaining on issues of their own choice and interest.
One factor where India may have gained considerably was the issue of TRIPS (Trade-Related Intellectual Property Rights). Originally conceived as a proposal to fight counterfeit products, the law had threatened to become a Frankenstein where India and other developing countries were concerned. It was trying to be used by the developed world to strangulate indigenous products like basmati rice and at the same time to prevent development of cheap medicines for which the internal pharmaceutical industry has the infrastructure and knowhow, all in the interests of Western patent rights in an earlier age and where the products are priced exorbitantly by Indian and Third World standards.
However, it was decided at Doha, as a result of intense bargaining, that developing countries would be granted the right to break any monopoly, which will almost inevitably mean a Western one, over patented drugs in case of health emergencies like the outbreak of epidemics.
In a vast country like ours, such emergencies occur seasonally, whether it be due to drought, floods or other calamities. At such times the resources of state and central governments are stretched to the limit, while drug companies are hamstrung by patent laws in marketing products at cheap rates.
There are also international ramifications of this issue. Indian companies have over the years developed cheap and effective drugs for AIDS which can be used both domestically and exported to regions in Africa where the problem is far more endemic than in our case.
Indian drug companies now need to co-ordinate with other similar companies in Africa to ensure that there is no needless competition and that life-saving drugs are available to the poor and needy at affordable prices. After all, epidemics are a fact of life in the Third World.
Another vital sector where India gained was in agriculture. While the developed world, especially the combined might of the European Union (EU), wanted the Indian market to be opened up for its high-tech products, it still insisted on providing massive subsidies for its own farmers to develop those products.
The Indian delegation was able to convince the WTO finally that this is an iniquitous structure. The meeting agreed that the EU will undertake to conduct talks on subsidy phase-out in the future. As a result, the prospects of quality Indian farm product exports have brightened considerably.
On the contentious issue of anti-dumping regulations, the gains were somewhat limited. This, of course, pertains to the practice of recycling costly Western products and then re-exporting them at a much lower cost, quite often to the manufacturers countries themselves. India has agreed to greater discipline in the matter, but no changes are immediately guaranteed.
In this particular context, the formal entry of China into the WTO will also be of interest. For, China has also been accused repeatedly of dumping recycled products on the world, India included.
The need now is for China and India to get together to safeguard their interests on the issue. Otherwise, the West could come down harshly on all imports from the two countries. A joint stand by the two countries could make it more difficult for the developed world to browbeat us.
Of course, in such a give-and-take meeting, there were bound to be losses as well. The most prominent of them was in the textiles sector. India wanted the deadline for quota reduction to be advanced from 2005 and had threatened non-tariff barriers if it was thwarted.
But America adamantly refused to budge on the matter and threatened its own non-tariff barriers if pushed. India will now have to wait for some more time to be able to gain free access to US markets.
On two other issues, environment and opening up of investment and competition, the position also remains the same. The only agreement has been on further negotiations on the subject after 2003.
The onus is now on the officials of the Commerce Ministry to get their act together so that they can effectively follow up on whatever the Indian delegation led by Shri Murasoli Maran has been able to achieve at Doha.
It has to be repeated that there is no point in running away from the WTO. In a highly integrated world this organisation is there to stay and it is up to India to gain the best possible bargain from it.(PIB Features)
* Senior Economic Journalist