Lack of political will won the day at Geneva

EXIM MATTERS

Few in India expected Commerce Minister Kamal Nath to agree on anything at the meeting of the Trade Ministers of 40 member countries of the WTO at Geneva, last week. So, it was entirely expected that the trade talks would fail on one count or the other.

The Americans provided the perfect plea for Nath and with the Chinese backing him fully on the issue of triggers for special safeguards for agriculture, the lack of political will to take the Doha Round to its conclusion won the day.

When the WTO meeting started on July 21, Kamal Nath was in Delhi to be in Parliament for the confidence vote. During the debate, the opposition denounced the nuclear deal as playing into the hands of the US and as a deal between un-equals.

The government won the confidence vote, but not before some anxious moments. Another deal within a week was not something that Nath wanted. The timing was inappropriate for another deal, the government would be hard put to defend.

The US pushed for the rigger for safeguard action to be set at 40 per cent increase in imports. In the best of times, Nath or for that matter, any Indian minister would have found it difficult to accept that. As it turned out, Nath, who was agreeable to a 10 per cent trigger level, could reject the demand easily and claim that the vulnerability of poor farmers cannot be traded off against the commercial interests of developed countries.

It is not unusual for negotiators at the WTO to be quite conscious and worried about how voters back home would react if they agree to something at the negotiating table. Sometimes the fears can get exaggerated. Susan Schwab, the US trade representative was, perhaps, afflicted with the same malaise.

The issue of safeguard trigger levels might have attracted very little attention if the US had accepted Nath's proposal rather quietly because the bigger issue was the ceiling on subsidies to US farmers. The US failed to see the benefits of giving Nath the 10 per cent trigger level and get going in other areas. The failure severely dented the credibility of the WTO.

After nine days of negotiations, the outcome was exasperating, especially for Pascal Lamy, the director general, WTO, who had worked tirelessly to goad the ministers towards consensus. Of the 20 points on the table, agreement had been reached on 18, said Lamy. Safeguards issue was the 19th and the cotton subsidies, an issue that interests the Africans considerably, the 20th. In the end, everyone went back empty-handed.

Peter Mandelson, the EU trade commissioner wrote in his blog that some of the people across the table, instead of working for success, are in reality preparing for failure.

It is now difficult to say when the Doha Round will reach its conclusion. It is unlikely before a new President in US and a new government in India take over and settle down. Lamy is hopeful of a deal before his tenure ends next year but it is more likely that he will need an extension to bring the Round to a conclusion, some time later.

tncr@sify.com