Don't stop trying

India must take lead to revive Doha Round

Last year at Bali, the World Trade Organization (WTO)'s Doha Round of trade negotiations, near-dead for five years, took a giant step forward when every single member-country of the WTO agreed to ratify a trade facilitation agreement by July 31 of this year. The idea behind trade facilitation is simple: to ensure that the red tape and the delays that exporters and importers face are reduced. The gains from trade, and, thus, to producers and consumers, would be considerable from this much-needed reform - especially in countries such as India, swamped with red tape. It came as a surprise, therefore, to most of the world that the new government in India reversed the decision taken by its predecessor and refused to sign up to the trade facilitation agreement reached at Bali.

This is patently not in India's interest. It has long opposed the splitting-up of the globe into free-trade zones that exclude it. This process, which has gathered speed as disillusionment with the Doha Round grew, is certain to become even faster now. Pacts, such as the Trans-Pacific Partnership, will find the going much easier, now that there is no alternative. India needs multilateralism, to make sure that it is not left out. However, it has on its own made multilateralism look unworkable. And the reason it has done so is worrying, too - because it is hardly in its own interest. The reason is that it wants agreement now on a parallel pact meant to ensure that its vast stockholding of grain bought at an artificially high price from producers are not distorting the world market. Note that the problem is not about food subsidies for the poor. It is not about supporting marginal farmers. Both these can be done while being WTO-compliant. It is about tinkering with the price mechanism and distorting the world price. The argument that it was all done in the interest of small farmers is, thus, disingenuous.

In effect, India has killed the Doha Round. It is now up to it to revive it. It is reported that commerce ministry officials are hopeful that it can be restarted in September, if the United States gives in on aspects of the food stockholding issue. India must, at least, work to build a global consensus around its concerns and the need for a more realistic mechanism for estimating the subsidies - necessary spadework that does not seem to be have been done so far by its diplomats. That is not enough, however. The primary impetus to revive the Doha Round must come from the primary spoiler: India. To be seen to be a responsible nation, India must shed this image of global spoiler that it has worn for decades, and to which the government has just given a fresh coat of paint. It must act solely in its own interests, and work to revive the Doha Round in September. India must not lose the opportunity to boost trade facilitation - and to prevent the world from turning away from multilateralism.