Breaking barriers

There is not much optimism about the success of the latest Indian effort to revive the Doha round of trade negotiations but the initiative is worth being taken in view of the importance of the process. Commerce minister Anand Sharma is planning to meet representatives of some member countries of the World Trade Organisation soon.

If there is any positive outcome it can be taken forward in the upcoming G-20 meeting in Seoul. It can also provide a basis for discussions on the matter between India and the US during the visit of President Barack Obama next month. While these are possibilities based on hopes, there are strong doubts based on realities. India’s commerce secretary said last month that there is little chance of any progress before the forthcoming US
Congressional elections because trade issues are potent political issues also and the US administration will not like to be seen as having given away anything.

The talks which started in 2001 have been stalled for the last two years over differences on most of the key issues. There were wide differences over the measures to protect the interests of the farm sector in both developed and developing countries, on industrial tariffs and services and non-tariff barriers. The immediate reason for the failure of the last substantive round was the disagreement over a proposed special safeguard mechanism which would help developing countries to protect their farmers in case of a surge in imports. The discord on this issue was mainly between the US and India. The US, the European Union, India and China are the key players and between them they represent a wide spectrum of interests.

The US and the EU will not make any concessions which will be interpreted in the short term as harmful to the interests of sections of their population. Though reduction of barriers and freer trade will help all countries to gain, protectionism is actually on the rise, as seen by the recent US steps against outsourcing. Therefore it is not certain whether the key members of the WTO, like the US and the EU countries, will be receptive and willing to take important decisions as long as their economies are in poor health. But the irony is that a new trade order can actually help their economies to turn around more quickly. Unfortunately this truth will not be accepted easily.

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