As the commerce minister in the Vajpayee govt, Jaitley pulled off some nifty moves that changed the course of trade negotiations at the WTO in favour of developing nations.
Most of the tributes to former finance minister Arun Jaitley, who passed away last Saturday, have missed his influence in decisively changing the course of the Doha Round of multilateral trade negotiations at the WTO during August-September 2003. His contribution, and personal qualities, in shaping WTO negotiations needs to be recalled.
Jaitley assumed charge as India’s commerce minister in January 2003, at a time when the Doha Round was at a crucial juncture. In accordance with the Doha Ministerial mandate of 2001, key decisions had to be taken at the Cancun Ministerial Meeting of the WTO, which was barely a few months away in September 2003. Two topics required his constant attention—agriculture and the so-called new issues.
In agriculture, Jaitley had the onerous task of not conceding ground to developed countries, as well as some export power-houses among developing countries—Brazil and Argentina—who were seeking to prise open India’s market for their agriculture exports. As the negotiations in agriculture progressed in 2002- 2003, the interests of developing countries appeared to be getting ignored. But this changed decisively in August 2003, when the ambassadors of Brazil and India to WTO decided to join hands. Their aim was to thwart the attempts of the EU-US partnership to accommodate their mutual interest, while marginalising the concerns of India and other developing countries.
The fledgling coalition forged by the diplomats of Brazil and India in Geneva required a formal approval at the political level in New Delhi. Fearing that the price of aligning with Brazil would be to grant market access for its agricultural products into India, some quarters in the Indian government were strongly opposed to the coalition. Jaitley showed immense foresight and astuteness in sensing the value of this coalition. He moved with determination and succeeded in changing the mind of one his influential ministerial colleagues, who was the main person opposing the coalition.
Further, recognising the utility of having China on his side, he openly welcomed that country as a member of this coalition. Eventually, on 20 August 2003, the G20 coalition in agriculture was established. And the rest, as is often recognised at WTO, is history. Henceforth, it would be the developing countries, and not EU-US combine, that would be the most influential voice in agriculture negotiation. Jaitley was one of the principal architects of this tectonic shift at WTO.
Let us now turn to another subject in the Doha mandate, in which Jaitley made seminal contribution—the four new issues: investment, competition, government procurement and trade facilitation. At the insistence of the EU and the US, and supported by other developed countries, these issues had gate-crashed onto the WTO negotiating agenda. At the Doha Ministerial Conference in 2001, India, along with a few other developing countries, had strongly resisted commencing negotiations on these issues. They saw little merit in overloading the negotiating agenda with new issues that did not hold promise of creating reciprocal benefits for developing countries. In 2003, the mantle fell on Jaitley to prevent negotiations on these issues from moving ahead at the Cancun Meeting. How he achieved this provides many lessons in negotiating strategy and also demonstrates some of his finest personal qualities. In this context, it is worth recalling some episodes at the Cancun Meeting.
First, in one of the small group meetings, Robert Zoellick, the Trade Representative of United States, sought to give a particular twist to the Doha mandate, which would have been adverse to the interest of developing countries. Jaitley’s quick thinking saved the day. Using his immense legal skills, he completely turned the tables on Zoellick, who was no mean lawyer himself.
Second, in another incident at Cancun, a marathon meeting, lasting almost 7-8 hours, had just ended at 4 am. Jaitley came out of the meeting room, looking completely exhausted. He was promptly informed that his next meeting would be held within 3 hours. As the meeting was on an issue of immense importance to India, he ignored his tiredness and took a detailed briefing on it for almost 2 hours.
His personal comfort took a back seat, when it came to protecting national interest at WTO. Through his actions that day, Jaitley taught all of us young officers the meaning of commitment to the task at hand.
The third incident concerns the coalition of about 100 countries against the new issues created at Cancun. At a crucial juncture, rumours were rife that a key country was planning to abandon the coalition. Jaitley played his masterstroke. He convened a press conference where the minister of this key country was made the centre of attraction. This minister clearly enjoyed the glare of international media and any thought of leaving the coalition was quickly abandoned.
In the face of opposition from more than 100 countries, the Cancun Ministerial Meeting collapsed without taking any substantive decisions. From the discussions, it was clear that at least two out of the four new issues would not remain on the negotiating agenda. And so it proved to be in August 2004. This came about in no small measure due to Jaitley’s multi-faceted skills at Cancun.
Immediately after the Cancun meeting collapsed, domestic and international media surrounded Jaitley. His statesmanship emerged in this impromptu media interaction. He resisted the temptation of playing to the gallery and, unlike some of his counterparts from key developing countries, did not take any credit for collapse of the meeting. His measured statement ensured that India would not be singled out as the main country responsible for the collapse of the WTO meeting.
For those of us who had the privilege of interacting with Arun Jaitley at Cancun, his razor-sharp thinking, commitment to duty, strategic approach to negotiations and courage in taking on the developed countries, evident in ample measure at this crucial meeting, shall remain an abiding memory.
May your soul rest in peace, Sir.
(While working as a Director in the department of commerce, the author was part of India’s official delegation to the Cancun Ministerial Meeting of WTO held in 2003.)