Multilateralism wins at Battlefront Doha

New round sceptics crushed by the juggernaut of globalisation

Sanjaya Baru

Globalisation is alive and well and the World Trade Organisation will not be found wanting in creating the institutional framework required to impart stability and security to that process. On the day the Taliban began their retreat, the process of globalisation received a second boost at Doha when 142 trade ministers from across the world gave their imprimatur to a new round of trade negotiations. Some negotiations, albeit, are about negotiations and there is helpful rhetoric about development.

The WTO’s Fourth Ministerial Meeting at Doha has launched a new round, indeed a “comprehensive round”, of trade negotiations and widened the WTO’s agenda by linking trade policy to national rules pertaining to such ‘non-trade issues’ as investment, competition policy and environment. It has also given its consent to bring other new issues on board like trade facilitation, government procurement policies and e-commerce. Much of this not immediately, but after the Fifth Ministerial. There is more time for disagreement but the process has been clearly defined.

Each participant at the Doha meeting will interpret the outcome to mean that his/her point of view has found adequate expression at the global level. Critics of the Doha outcome will charge their respective governments with having been defeated or checkmated in the trade game. Amidst all this babble only one thing is clear. Multilateralism in trade has won the day once again and the juggernaut of globalisation regains momentum, having faltered after Seattle and New York.

To the extent that India is better served by a multilateral trade regime rather than a series of bilateral deals or even regional agreements, the new lease of life secured by the WTO is good news. To the extent that a majority of the world community is not willing to stay the course with us and is in a hurry to globalise, we must reflect on what the Doha outcome means for our economic policies in the medium-term and our negotiating strategy and tactics in WTO in days to come.

Equally importantly, many of the issues raised by many developing countries have found explicit expression in the Doha Ministerial Declaration (the full text of which is available on the WTO website). It is also true that many issues, barring labour standards, which developing countries have been wary of have also found expression. The juggernaut of globalisation proceeds apace and it is up to us to decide whether we want to opt out (not much of an option there), prepare intelligently and move along (like China) or go kicking and screaming as we did at Doha. Some in the world watch our act with concern, some with disgust, but most are merely amused.

We went to the Third Ministerial at Seattle in 1999 with a clear brief, approved by Parliament, to support a “limited new round” which gave precedence to issues relating to the “implementation” of the Uruguay Round Agreement. In the event, we were not disappointed with the inability to launch a new round since we are not yet ready to move ahead with more trade and investment liberalisation.

If the Indian delegation had gone to Doha with the same brief with which it went to Seattle it could have returned claiming half a victory, in a “give and take” process. As it turned out, the National Democratic Alliance government altered the brief half-way between Seattle and Doha, partly fearing that the opposition political parties will make WTO a campaign issue in the forthcoming Uttar Pradesh elections, and partly yielding to pressure from a range of domestic interests. The planned tactical shifts in the final leg did not happen because after September 11 the government may have thought Doha would not happen. Why climb down from the high horse when the race may never begin?

But Doha remained on course and Mr Maran rode reluctantly. He returns a bit disappointed, a bit wary about how the opposition political parties will play this out and a bit sour about the kind of pressure tactics used to force India to finally fall in line. India had the option of taking a positive view of a new trade round, even while flagging all our concerns and lobbying hard to shape the final agenda, and of taking a negative view, opposing the widening of the WTO agenda. We opted for the latter. We failed to win adequate support from the world community.

Supporters of Mr Maran’s tactics will argue that since we are unhappy with the global regime and with the compulsions of globalisation, we were right to protest till the end, and since we do not want to opt out of a multilateral regime we were right to sign on in protest. These tactics do not constitute a strategy, though they may earn brownie points for the government among WTO sceptics. Mr Maran’s critics will be of two types. The pro-trade critics will argue that he should have seen the writing on the wall and not adopted a negative stance. The anti-trade critics will attack Mr Maran for giving in at the end, even if in protest.

Since Mr Maran is unlikely to find favour with either the pro-trade or anti-trade groups, he ought to have gone beyond tactics and pursued a larger strategy, of utilising the Doha Ministerial to build bridges with trading partners, coalitions with like-minded countries, projecting India as a confident developing economy capable of taking on the challenge of globalisation. A strategy that China has sought to pursue with remarkable success, even if with trepidation. Mr Maran’s instincts would have led him in that direction. His political compulsions hobbled him.

In the end, the parallel he drew with India’s stance on the Comprehensive Test Ban Treaty may have been misplaced. In refusing to sign CTBT, India was defending its national security interests. India has neither the protection of a nuclear umbrella nor of benefactors who will transfer the requisite technology. It was national security that dictated our decision to stand alone on CTBT, since we had to have a capability on our own. Our stance was strategic, not tactical. Our opposition to a new WTO round and to globalisation is less strategic and more tactical. Hence, hardball negotiations was good tactics, but brinkmanship was poor strategy.