Led by Minister Anand Sharma, the Indian trade delegation to the 7th WTO Ministerial Conference is getting an unusually cool reception here in Geneva. And this is not just from the social movements, trade unions and civil society organisations gathered here with a clarion call for ‘WTO turn-around’. Many smaller developing countries that have previously looked up to India as a moral leader of the South are disappointed with the Indian turn-around, albeit in the wrong direction.
India’s volte-face on the Doha Development Round began with the change in guard at the Ministerial level. Veteran Minister Kamal Nath was traded in for Sharma a relative novice. The latter is under strict instructions from the Prime Ministers office to undo the so called ‘damage to India’s global image’ caused by Nath’s steadfast refusal to agree to the conclusion of the Doha Round citing the disastrous consequences for India’s marginal and vulnerable farmers. Sharma on the other hand has been more than gung-ho about its conclusion. He convened a WTO mini-ministerial meeting at Delhi in September 2009, which was protested by more than 50,000 farmers, workers and left political parties and labelled undemocratic and against the interests of the developing world.
Minister Sharma then endorsed the controversial December 2008 texts in agriculture and industrial tariffs. Both texts were dramatically criticised and rejected by his predecessor when they were introduced in July 2008 because of their inability to protect the interests of India’s farmers and workers. Since then, the twin crises of food and finance have further accentuated the vulnerability of farmers and workers. Food policy analyst Devinder Sharma reports that farmer suicides have increased with some 900 cases reported from the Vidarbha region in western India since January 2009. The count is also rising in the states of Orissa and Andhra Pradesh. Economist C P Chandrasekhar writes that a labour bureau sample survey late last year, covering eight sectors including textiles, metals, mining, automobile, gems and jewellery, construction, transport and the information technology industries, showed that over a half a million jobs were lost and this is expected to rise.
Analysis of the current negotiating texts show that farmers and workers will be worse off with the proposed drastic cuts in tariffs coupled with weak and ineffective safeguards to prevent import surges. There is no logic in India’s now zealous acceptance of the current texts except that it wants to be seen as a responsible global player and curry favour with the USA.
But even that defies logic. The US Trade Representative (USTR) Ron Kirk comes to Geneva with strict instructions from an anti-trade US Congress to not negotiate. Kirk does not have fast-track authority to ink a Doha deal and is unlikely to get it anytime soon. With ambitious bail-out packages that violate its WTO commitments and a farm lobby that won’t agree to even a meagre cut in subsidies, the US is hard put to show a pro WTO liberalisation face at the Ministerial meeting. Sharma should be closing ranks with other developing countries to expose the hollow rhetoric of the US administration.
India’s position is even more baffling in the services negotiations. At the last WTO Ministerial in 2005 in Hong Kong India supported the text on services or Annex C of the Ministerial declaration citing huge potential gains in the movement of highly skilled professionals to markets such as the USA. The futility of its aggressive stance on the General Agreement on Trade in Services (GATS) was exposed with the financial crisis as several thousand H-1B visas are lying vacant in the current financial year. India now seems reconciled to getting little in terms of offensive interests in the GATS but continues to press forward on controversial issues such as domestic regulation still alluding to the mirage of gains through the movement of skilled labour. Analysis by the Geneva based South Centre warns that disciplines on domestic regulation will conflict with the right to regulate, especially in critical areas such as finance. In fact India should have taken the lead in exposing the USA for its hypocrisy in demanding financial de-regulation in developing countries while re-regulating back in Wall Street.
Sharma’s naivety in international negotiating politics was further evident when he curtly refused a request by representatives of Indian farmers, unions and civil society organisations to meet them for a briefing on the Indian position. On the other hand South African Trade Minister Rob Davies met with several trade unions at the ILO and was unequivocal in his rejection of the current industrial tariffs text as it failed to meet the test of creation of decent work for his citizens. Davies urged his fellow ministers to use the current impasse in the Doha Round to reflect and start a dialogue on fundamental reform of the WTO. Sharma would do well to use this non-negotiating Ministerial to get some training on the sticky terrain of global trade politics and spending time with Davies would be a good start.
Benny Kurruvilla