WTO prospects brighten

The prospects of resuming the World Trade Organisation (WTO) talks, which broke down at the Cancun ministerial and made no progress even at the WTO general council meeting at Geneva, have seldom looked as encouraging as they do now.

The ray of hope has come from the move initiated by the US, the world's largest trader, backed by the European Union (EU), another formidable trader, and endorsed by some key developing countries, including India, Brazil and South Africa.

The consent of the latter group is indeed significant. These, along with China and others, constitute the group of 20-odd countries that together account for a much bigger market than the rest of the world put together.

Though, individually they did not have much clout at the WTO negotiations in the past, today they are collectively in a strong position.

No wonder then that it was this group and, more particularly, its stand on the crucial agriculture and Singapore issues, which the developed countries held responsible for the failure of the Cancun summit.

At Geneva, however, it was the reluctance of almost all the countries and groups to budge from their stated stands that precipitated the fiasco.

Mercifully, there are now indications of the willingness of the parties concerned to negotiate rather than just take stands.

Though the pointers available so far do not instil much hope about the parties conceding sufficient ground to facilitate an early accord, the resumption of the process seems imminent.

What is important is that everybody has realised the centrality of the agriculture-related issues and the need for resolving them. But the issue of slashing agricultural subsidies still remain as contentious as ever.

Also significant is the emerging consensus on unbundling the Singapore issues (investment, competition, government procurement and trade facilitation) and initiating talks on at least a couple of them.

But there is still no consensus on which ones to be taken up for consideration. In the same manner, while there are indications of some flexibility on the issue of services, the choice of services where such opening up should take place differs widely.

At the same time, there is growing realisation that multilateralism in trade agreements is still relevant though most countries are simultaneously heading for bilateral or regional preferential trade accords.

This is one of the reasons for fresh bids to put the talks back on the rails though over 70 of the WTO member countries are facing domestic elections in 2004.

These include the US as well as India. The EU, on the other hand, is preoccupied with the issues concerning its expansion.

Under these circumstances, the countries' move to go ahead with this process, ignoring the domestic compulsions, assumes significance.

No doubt, most of the countries going to the polls also realise that nothing that can materially influence the poll results is likely to come out by the end of the year even if the impasse on the talks ends early.

And politically, the dispensations with fresh mandate would be relatively better placed to take rational decisions and even consider some give-and-take to facilitate a final accord.