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The G-15 meeting of ministers from developing countries, hosted by India at Bangalore, has been a tame affair, confined to an exchange of views rather than to the framing of a common negotiating position for the Seattle meet in November. The developed countries are clear about their agenda: secure the imprimatur of WTO to widen their access to the developing country markets and to curb the exports of the latter on grounds of environment, cheap labour and technical standards.
The exchange of views at Bangalore is a good starting point, but even a tentative blueprint from the host country would have furthered the developing countries' negotiating stance, or at any rate imparted a focus to the discussions of the G-15. Instead, commerce minister Ramakrishna Hegde treated the invitees to homilies on unequal relations between developed and developing countries.
Perhaps no more could have been expected from a caretaker government. But this also reveals how ill-prepared this country is for the confrontation atSeattle. Had the bureaucracy done its homework, Hegde might have been able to give a thrust to economic diplomacy. Bangalore is a missed opportunity.
How free is free trade in the WTO regime? Consider the United States, the biggest importer from the rest of the world. A US law states that no provision of the Uruguay round that is inconsistent with any American law shall have effect. Also, the WTO agreement on anti-dumping is not tightly unambiguous.
This enables the rich countries to claim that they have reduced tariffs on the one hand and use, on the other hand, national laws to enforce protection. According to one estimate, only 3 per cent of anti-dumping cases in the European Community and 4 per cent in the US involved possible under-pricing. This shows the prevalence of high protectionism in rich countries. Besides, tariff reductions by the industrialised countries have been selective. According to Assocham, the US and EU impose high tariffs on 837 products, most of which are of export interest toIndia.
There are two issues here. First, discrimination against exports from developing countries, including quotas and non-tariff barriers, must be forcefully opposed by developing nations, and brought within the ambit of WTO scrutiny. Second, there is need to repulse the developed countries' pressures to bind tariffs within a certain range; in effect, reduce peak tariffs.
This can be done only after establishing a wide spectrum of manufacturing industries for export. The acquisition of competitive strength requires unhindered technology transfer but there is no commitment from developed countries in this regard. India must prepare hard in the next three months for tough negotiations at Seattle.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
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