WTO Conference in Nirobi, Kenya is the most important summit after the Paris Climate change Summit. The most important issue after climate change which needs addressal is the opening of new markets for international investment. There is hope for pushing multilateral trade as well via Trade Facilitation Agreement which is a trade protocol aiming to give a spur and do away with the stumbling blocks in doing international trade between various countries.
These days the international arena for trade is divided into two forays i.e. developed and developing countries. While one party is looking forward for Doha development agenda whose objective is to lower trade barriers around the world, and thus facilitate increased global trade; the other party is more aligned towards agriculture market access.
We know that all the developing countries want Doha development agenda to be part of talks in Nairobi whereas the developed countries want it dead.
Why is that so?
As far as this agenda was concerned; though it was worked out jointly by developing or developed world, there were some issues pending. One of the major issue being that when Doha 2001 was agreed to, there were certain concerns which were not taken into concern by the Developed World like the basic Doha agenda included Agriculture, Green Box subsidies, Amber Box, Blue box and especially the subsidies given by the US and EU to their farmers referred to as export subsidies. The other issues were regarding patents i.e. developing country’s traditional knowledge was being pirated ( Intellectual Property Rights issue ) by developed countries.
Because all these issues concern most of the developed countries; they do not intend to let India discuss them. The developed countries are suggesting that India is a rising economy and is not a developing economy anymore. According to the first world, foremost concern should be the market access for them which in turn would profit India . This is the way forward as per the developed world.
What is in it for Developing countries?
There are many reasons for the developing countries to push very hard for these multilateral Trade Facilitation Agreements along with Doha round. Some of them being:
- In terms of technology; most of the cell phones are assembled in China, but the benefits i.e rent is extracted by the developed countries. Also the developed countries extract rent through other manufacturers like Nike and Reebok though they are manufactured in Developing countries.
- As far as the agriculture subsidies are concerned, developed countries give subsidies to their farmers but have a differential treatment towards the developing nations. their argument being that countries like India and China are not developing countries anymore.
The two main issues issues that ought to be discussed apart from others are :
- Special Safeguarding Mechanism: In Doha Round agriculture: a tool that will allow developing countries to raise tariffs temporarily to deal with import surges or price falls.
- Special Products: In Doha Round agriculture: products for which developing countries are to be given extra flexibility in market access for food and livelihood security and rural development.
What should India do?
India should insist on working a permanent solutions for food security i.e the issue of export subsidies by developed countries should be addressed. India will also want the WTO’s ministerial declaration to mention the special safeguard mechanism (SSM) to protect farmers from any surge in imports or steep decline in prices. Apart from the given issues, India should also discuss the access to service sector in all the developed countries.
In the present world , two countries can have bilateral treaties like FTA etc ;India expects a specific package for least-developed countries.
What is the point of having a multilateral agency like WTO if two countries can have bilateral agreements on their own terms?
These days we have lot of Bilateral treaties like FTA and RTA as well. These Free Trade agreemenmt or Regional Trade Blocks though have their own advantages but at the end of the day it’s a global world out there today . We need rule based trade, Unhindered access facilitated by a mechanism which links our economy to an outside one with trade rules unilaterally accepted by the world.
Listen to the debate on this topic below :