Strategy overtaken by tactics

Sanjaya Basu

Trade negotiations are a battle for markets. The distinguished strategic policy analyst Thomas C Schelling once wrote in a report prepared for the United States Congress that “Aside from war and preparations for war, and occasionally aside from migration, trade is the most important relationship that most countries have with each other ... trade is what most of international relations are about. For that reason trade policy is national security policy.”

Sanjaya Baru

It is an idea that must have crossed union commerce minister Murasoli Maran’s mind as he prepared for the Fourth Ministerial Meeting of the World Trade Organisation at Doha, Qatar, beginning today, for Schelling’s words are quoted at the beginning of a WTO strategy paper that Mr Maran may well have read as he prepared for Doha. Written for the Prime Minister’s Council on Trade and Industry in early 2000, the paper is titled: “Strategy for a Reconvened WTO Ministerial Meeting”; its ‘official’ authors: industrialists N Srinivasan and Rahul Bajaj; its real authors a group put together by Dr Amit Mitra, the secretary-general of the Federation of Indian Chambers of Commerce and Industry (FICCI).

When a nation goes to war its military strategists, political leaders and diplomats work together and separately to work out the overall strategy and the related tactics. In any battle tactics are subservient to strategy. So it should have been in the battle for markets. However, as India’s trade negotiators settle down to establish last mile connectivity at Doha, it increasingly appears that Mr Maran and his trade policy team may have lost sight of strategy pursuing a clever tactical game.

Mr Maran’s “implementation first” and “no new round” approach was not the sum and substance of India’s strategy. It was of course not just tactics either, because India has serious concerns about implementation of the Uruguay Round agreement, though most of these relate not so much to implementation per se but in fact to a belated dissatisfaction with what had been agreed to at the Marrakesh Ministerial Meeting in 1994.

Notwithstanding such concerns Mr Maran went to the Third Ministerial Meeting at Seattle with a positive attitude towards a “new round”. India in fact had the so-called “three track” approach, which the Congress Party’s economic apparatchik Jairam Ramesh has been canvassing for Doha, namely, a set of issues on which India was willing to negotiate, a set which it would consider discussing but not negotiating and a set it would neither negotiate nor discuss.

Mr Maran had to abandon this positive approach when he discovered that US President Bill Clinton had come to Seattle not to launch a new round of trade negotiations but in fact a domestic election campaign. With US politics and US-European Union differences scuttling the launch of a new round, Mr Maran cut his own losses by quickly retreating from his positive agenda and committing himself loudly to an opposition to a new round.

Even then, consider the statement made by Prime Minister Atal Behari Vajpayee on 1st December 1999 in the Lok Sabha, at the start of the Seattle meeting. The Prime Minister clearly stated: “We are not in favour of wide-ranging new round of negotiations, often called the Millenium Round. We are opposed to relating with trade: (a) core labour standards; (b) environmental standards; (c) coherent global architecture; (d) investment issues; (e) NGOs involvement in WTO negotiation, and (f) competition policy. We are prepared for a few new items being taken up for negotiations provided implementation issues arising from the Uruguay Round are also resolved to our satisfaction. These are matters for negotiations in Seattle..”

In short, the NDA government was not completely opposed to a new round, it favoured a “limited” round and opposed a “comprehensive” round. This was the approach with which trade policy analysts began to re-look India’s options in a post-Seattle situation. Returning to India from Seattle many businessmen, economists and trade policy experts appraised the government of the need to work out a comprehensive strategy for trade negotiations in the future. Thus, unlike in the Uruguay Round, when much of the homework on trade policy was confined to the government, this time round several research institutions, think tanks and industry associations were roped in to feed the policy making machinery. Institutions like the Indian Council for Research on International Economic Relations (ICRIER), the Indian Institute of Foreign Trade (IIFT), National Council for Applied Economic Research (NCAER)and so on were all roped in for policy analysis. Industry associations set up WTO wings and prepared position papers. Over the past two years, detailed studies have been conducted to generate potential elements for India’s “positive approach”. The bottomline for Mr Maran was to agree only to a limited round but to make enough noise about implementation issues to ensure some movement forward in areas such as the agreement on trade-related intellectual property rights (TRIPs).

Somewhere along the line, however, the crescendo of “implementation” drowned the reasoned view on a limited round. Domestic politics began to impact. Notwithstanding some sensible words from Congress President Sonia Gandhi, thanks to Mr Ramesh, the entire Opposition has united to oppose a new round altogether. To make matters worse, the cussed unwillingness of the EU to consider the issues raised by India sympathetically made Mr Maran more angry. The US tried to help and a meeting was arranged in Mexico. India was expected to change gears, with new tactics facilitating its strategy. This did not happen.

When the government was criticised for adopting a negative stance and advised to unveil a “give and take” approach, India’s negotiators chided non-governmental “busybodies” and gave the impression that the time was not ripe to shift gears. “A change of tracks will be made at the appropriate time. Be patient” was the advice given out. This change of tracks never materialised and the Doha meeting is upon us.
Perhaps September 11th upset all our calculations. It was a turning point. Perhaps Mr Maran calculated that after September 11th and after the Afghan campaign, there would be no Doha meeting. Perhaps 9/11 helped forge a pact between US and EU that eluded them at Seattle. Perhaps, perhaps. Overtaken by tactics, we may have lost sight of strategy. We went to Seattle to say yes, we returned saying maybe. We are in Doha to say no, we may yet return saying maybe.