Joshi calls for solidarity of developing nations at WTO conference

Our Economic Bureau

New Delhi, Aug 21: EXPRESSING his reservations regarding the provisions of the World Trade Organisation (WTO), human resources and development minister Murli Manohar Joshi called for the solidarity of developing and the least developed nations.

Delivering the valedictory address, here on Tuesday, at the international conference on “Concerns of the Developing Nations in the WTO Regime,” he said that developing countries should come together and evolve common strategies to safeguard their long-term social, cultural and economic interests at the WTO ministerial conference at Doha.

Though Dr Joshi did not call for the boycott of WTO, the tone and tenor of his address was extremely critical of the organisation. The WTO conference at Doha in November must give top priority to the implementation of the Uruguay Round agreements, he said. “The poor countries cannot and should not be forced to negotiate new issues through a new round.” He further said, “The future is full of challenges and distortions.” The launching of the Uruguay Round was surrounded by a number of controversies never witnessed before in the history of GATT, the minister said. In fact, “The Uruguay Round was forced on the developing countries. Unfortunately, the negotiating acumen of the developing countries was extremely weak.” Thus, “an unequal treaty was signed.”

GATT rules are “heavily loaded in favour of the developed nations.” Their implementation will have “all-pervasive impact” on developing economies.

Dr Joshi pointed out that, in the last few years, the flow of foreign direct investment (FDI) has been far less than the approvals. Further, the foreign trade deficit, too, has been rising.

He also attacked the TRIPS agreement. “With change in the patent laws, the new scientific advancements in the coming future are going to be monopolised through the patent system. Unless a balanced approach is adopted, industrial growth in the new areas of science and technology is likely to be blunted, particularly in the area of drugs and pharmaceuticals,” he said.

In the agriculture sector, too, “certain distortions” are likely to emerge with the removal of quantitative restrictions. “The international prices of agriculture products are comparatively lower than the prices in India.”

The main reason for high prices in India is the “high subsidy available to farmers from the governments in the developed countries.”

The level of total subsidy, which was supposed to be reduced in the farm sector, went up in the US from $26 billion in 1986-88 to $51 billion in 1997. Similarly, the subsidy level in European Union went up from ECU 9 billion in 1986-88 to ECU 22 billion in 1996, Dr Joshi said.

As regards the service sector, the US perceives its strength in this area, he said. “The opening up of financial services in banking and insurance sectors in India would result in diversion of savings generated in the country, which would be monopolised by the foreign financial institutions by offering comparatively better services to the customers.”

Dr Joshi also objected to the opening up of the education and health sectors.