The meeting of trade ministers scheduled in Delhi next month offers an opportunity for a final breakthrough on the Doha round impasse. For one, when the ministers meet in Delhi they will confront a difficult global macro economic scenario. The last round of negotiations in June 2008 happened when the global economy was at its peak and global exports were rising at break neck speed. Many of the negotiators had little reason to worry at that time as the costs of intransigence were more affordable than the costs of any of the anticipated concessions required for tying up a deal. This was especially so in the case of India and the United States, where elections were scheduled within a few months of the June talks. Both administrations were wary of any climbdown especially in important issues related to sensitive sectors like agriculture in particular, which was at the core of the negotiations, and where the political backlash could have been especially sharp.
Now, with the major economies, and global trade, shrinking, unemployment rising, and with new dispensations taking over in the key negotiating countries (read India and US), negotiators can be expected to be more accommodative. The world is slowly realising that the avenues for kick starting exports and growth in individual countries through domestic initiatives alone are limited and that a faster recovery would depend on how fast competing nations resolve to break the deadlock and open up new trade avenues. The best indication of this is the proactive stance of the new minister for commerce and industry, Anand Sharma. Of course, going by past experience, the Democrats currently in charge in Washington, and the Obama administration, are unlikely to be as receptive to free trade as the previous administration. So prying open any new concessions from them is unlikely to get any easier now. A break through in contentious issues like the triggering mechanism that would allow developing countries to use special safeguard measures to curb agriculture imports, that was a major barrier in the last round, would require that India and other developing countries soften up a bit. However, with food prices continuing to remain high across the world and likely to remain high for some time, the resistance to higher imports is unlikely to be as strong as before. But flow of agricultural commodities from the developed world has to be linked with a reduction in agriculture subsidies there. Quid pro quo and reciprocity is in-built in the GATT/WTO framework and Indian negotiators should ensure that any concessions offered bring accommodative responses in equal measure.
