Return
to Story Page
To print: Select File and then Print from your
browser's menu
D S Arora
The post-accord developments indicate several problems in the implementation of various Uruguay Round agreements. These relate to dealing with multiplicity of notifications, lack of financial and human resources and building up political consensus on different issue. The available details suggest that barring dispute settlement mechanism, the working of he World Trade Organisation (WTO) has not been very satisfactory.
The most flaring shortcoming of the WTO system is evidenced in the case of textiles and clothing. Liberalisation of all sensitive items has been left to third phase (2002-2005). Proliferation of anti-dumping actions is another aspect of the unsatisfactory functioning of WTO. No anti-dumping measures can imposed under WTO rules unless the imports are at least two per cent cheaper, account for a minimum three per cent of country's imports and cause demonstrable market damage. In practice, anti-dumping suits have been based on the most frivolous complaints.
For instance, a number of tradedisputes filed by the United States of America have been set aside and anti-dumping suits withdrawn. All this is an expensive and time-consuming affair. Japan is one of the biggest victims of anti-dumping and places the highest priority on curbing its misuse. Further, negotiations on liberalising world markets in financial services, maritime services and basic telecommunications - which should have been completed in the Uruguay Round but were set aside for latter - ended without global accords.
Again, the developing countries have not benefited much with the change of trading system after January 1995 when the WTO become operative. Liberalisation of trade in goods has proceeded very slowly in areas where the developing countries are competitive. Provisions relating to special and differential treatment for developing countries have also not been very effective. India is struggling to cope with the Uruguay Round commitments.
WTO disciplines impinge on many areas of our domestic policy making, which arebecoming highly sensitive. There are attempts to use certain provisions of WTO agreements to erect non-tariff barriers. We also find symmetries inherent in agreements in areas like intellectual property, agriculture, textiles and clothing.
In addition to these problems, there are deliberate attempts of penetration into new areas. For instance, in the Singapore ministerial meeting (December 9-13, 1996) where the main subject was review of the earlier performance concentrated on areas like labour standards, investment and information technology. Of these, the most sensitive areas are labour standards and investment. No working party on labour standards has been allowed to be established in the WTO. Linking of labour standards with trade is nothing but a disguised form of protection against goods produced by cheap labour in developing countries. Further, the establishment of international investment rules enforceable by all WTO members will not only complicate the natural development of a country, but wouldalso reduce the bargaining strength of its workers. There is no logic for granting greater freedom to capital mobility and imposing labour standards linked to trade, unless the international movement of labour is liberalised. Discussion on investment in this meeting is a matter of encroachment by WTO in a new area. It is true that the review clause in the TRIMs agreement provided for a possibility of consideration of investment policy issue or such a review. But this was to come by the end of five years period after 1998. The Information Technology Agreement exposes our strategic dilemma and highlights disharmony between our economic diplomacy and industrial strategy. Another aspect of the Singapore meeting is that the powerful WTO members were determined to enforce a comprehensive free trade regime and the developing countries looked divided.
The situation, however, changed in the second ministerial meeting at Geneva (May 18-19, 1998) where India along with other developing countries shifted its stand. Wewere not defensive. The Indian commerce minister Ramakrishna Hegde with his new-found confidence called for amendments to Uruguay Round agreements in the services and agricultural sectors as well as in trade related intellectual property rights to protect the interests of the developing countries. Unlike previous occasions, the developing countries were more united at the Geneva meeting. India-led SAARC countries adopted a common declaration urging WTO to reject the new forces of protectionism. In fact, Hegde spoke on behalf of the developing countries and asked for correction of anomalies in the earlier agreements before proceeding further.
So far as India is concerned, he made it clear that we will not commit for any new issues without considering their implications and educating our people.
With this syndrome, the second ministerial meeting took a cautious view of the whole thing and not talked must about the new issues, except reaching an agreement to keep trade on Internet duty free. Further, theWTO has decided to set up a mechanism to ensure faithful implementation of the existing multilateral agreements but this would succeed only after the review of anomalies is undertaken. India has agreed to stick to the existing WTO schedule for review and negotiations. The rich countries would take cognisance of this gesture and restrict future negotiations only for review of existing agreements and not induct any new issues. There are, however, no indications that the developed countries have agreed to rollback the non-tariff barriers imposed recently on exports from the developing countries. India firmly believes in liberalisation of trade and this amply demonstrated in recent amendments of its exim policy. Everybody seems to be dissatisfied with the implementation of Uruguay Round agreements.
A comprehensive Millennium Round of Negotiations is scheduled for November 1999 at Seattle in the USA. Unless we have implemented our obligations under the previous round and assessed the impact of suchimplementation, overloading of the WTO agenda will not be realistic. It is hoped that the European Union (EU), USA and Japan would understand the ground realities and work for a non-discriminatory world trade regime.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.
------------------------------------------------------------
This story was printed from Net Express located at http://www.expressindia.com. Net Express provides a portal to India, with news from The Indian Express and The Financial Express along with sites on travel and tourism, the entertainment industry, the power sector, the environment and much more.
------------------------------------------------------------