The government gives the impression that it has a meaningful strategy to drive bargains with the developed countries at the forthcoming Seattle round. There is much talk of trade-off: this focuses on getting increased market access in the first world, led by the United States; in return, India will lower import tariffs, abolish quantitative restrictions on imports and replace them with low tariffs. The buzz words in Delhi are quid pro quo. As of now, only two issues seem clear.The US is willing to join hands with India in keeping investment out of the Seattle agenda. America obviously wants to complete the Seattle round within a time-bound frame to press ahead with tariff reductions and subsidy abolition. For India, keeping investment out of Seattle will be a gain in itself, as it were: beyond this, what trade-off can it pursue? India wants to join hands with the Cairns group to get agricultural subsidies removed.
The interest of the US, Australia etc is obvious: they are major exporters of grain andmeat. What quid pro can India get except market access for its nascent (puny) food processing industries? India can hardly boast of sustainable agricultural surpluses. Mere alignment with the rich countries on specific issues does not necessarily attract worthwhile quid pro quo.
Besides, consider how India has been stood up with the passage of the trade preferential bill in the US on November 4. Under this law, textile exports of 50 developing countries of Central America, the Caribbean and Africa get duty-free entry provided they are made with fabric and thread imported from the US. The bill, passed literally on the eve of the Seattle round, means tough going for India's textile exports.
It also makes nonsense of the promised textile quota withdrawal in 2004. Besides, it drives a wedge between India and a large number of developing countries. The trade preferential bill weakens India's case against regional trade blocs: the US can claim it takes into account the concerns of poor nations outsideNAFTA.
India is on a weak wicket. WTO has ruled out this country's pleas for soft treatment on balance of payments grounds. The developing countries are disunited. There is no question of making common cause. Trade liberalisation and duty reductions have been projected (by the west) as an absolute good: the best that can be hoped for are the correction of discriminatory duties and non-tariff barriers against exports of interest to India. But such gains, assuming these are secured, will not take India far; its economy lacks export-orientation. India will open up without much quid pro quo.
Copyright © 1999 Indian Express Newspapers (Bombay) Ltd.