Mr Maran’s message

If the West plays hard ball, India could play spoiler

Once bitten, twice shy. Union commerce minister Murasoli Maran has a point when he says that India made a “down payment” in the Uruguay Round; that it will not do so the next time round unless there is something in it for the country. It is true that India was pressured, politically by the West and ideologically by free trade enthusiasts at home, into signing on the dotted line at Marrakesh, where the Uruguay Round agreement was signed, sealed and delivered and the World Trade Organisation (WTO) was created. The country has certainly benefitted from the Uruguay Round agreement, especially in securing a dispute settlement mechanism to resolve trade disputes and in securing improved market access in textiles. The anti-dumping mechanism has also helped India, one of the more enthusiastic users of the WTO’s rule-based check against unfair trade. There are many good things that the WTO has delivered, most importantly a multilaterally created rule-based system of trading, but clearly there are gaps. Mr Maran is right to wonder if a rule-based system is not being subverted by power-based interventions.

More importantly, though, the Uruguay Round has also institutionalised many inequities and distortions in world trade, especially by linking trade policy to rules relating to intellectual property protection, investment norms, fiscal support offered by governments and so on. What is worse is that the developed world has not delivered on many of the commitments made at the WTO. Mr Maran is correct in demanding a serious discussion on what are called “implementation issues”. He is also right to demand the drawing a bottomline on what will not be linked to trade policy, namely rules governing domestic social policies, investment regulations and such like. Mr Maran’s exasperation, reflected in his interview to this newspaper, is understandable. He is unable to get the United States and the European Union to see reason and address the issues he is raising. The consultation in Mexico between a select group of developed and developing countries will tell us whether the developed world is serious about addressing these issues or not. Having clearly drawn India’s bottomline position, the government must allow for negotiating space with a fallback agenda. If the US and EU remain insensitive and refuse to address our concerns, we may have no option left but to play the spoiler.