Global Trade Negotiations: A Deeply Divided House: Badar Alam Iqbal Provides an Indian Perspective on Recent Developments in International Trade Negotiations

Article excerpt

Since its formation on 1 January 1995, the World Trade Organisation has failed adequately to discharge its duties and responsibilities. The result has been growing differences between developed and developing countries on certain vital and strategic issues essential to the survival of the global multilateral trading system. These differences have been exacerbated by the failure of the Doha Development Agenda. Critical and dangerous trends have emerged. With the deadlock in negotiations, a new concept has come to the fore--'new regionalism'. India has been disappointed by the Doha outcome, and has given more attention to regional trade agreements.

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Global trade negotiations to promote a multilateral trading system, which is essential to the creation of a new international economic order, are uncertain. They could end in either the collapse of the global multilateral trading system or the rise of a new regionalism. This outcome must be avoided at all cost.

The emergence of the G-20 group that includes major developing nations --India, Brazil, China and South Africa--has been greeted with cautious optimism the world over. But the role this group is now playing in global trade negotiations is viewed with skepticism, particularly among the least developed nations, which also have a group--of 90 countries.

In July 2004 the WTO's General Council initiated what is known as the Doha Round for development or the Development Agenda of developing economies in the process of globalisation. The very first article in the July 2004 statement gave much needed emphasis to a unique trade initiative by the South in general and India in particular. It dealt with the outright rejection of the 'neo-colonial' process of liberalisation under the WTO regime. The Indian delegation has hailed this as a historic step and a victory for developing nations. (1)

At Hong Kong, in December 2005, WTO ministers agreed to establish the required modalities for two major issues--agriculture and non-agricultural market access--by the end of April 2006. The draft schedules were to be submitted on 31 July 2006 with the negotiations concluded across all areas of the Doha Development Agenda by the end of December 2006. In the case of services, all WTO members agreed to offer their respective revised proposals by the end of July 2006 and submit the draft schedules by 31 October 2006. Despite intensive negotiations, these deadlines were missed.

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The discussions from January to July 2006 were confined to triangular issues, namely domestic support, agricultural market access and non-agricultural market access. During the informal meeting of the Trade Negotiation Committee on 24 July 2006, the WTO Director-General, who is the chairman of the committee, pointed out that 'it remained clear that the gaps remain too wide and deep', and that the only course of action would be to suspend the negotiations across the Doha Round as a whole to allow serious reflection by the participating countries.

Keeping in mind the impasse, especially on agriculture, and the impossibility of finishing the Round by the end of 2006, members agreed to suspend the negotiations covering all issues of Doha work programme, and to restart them when the environment became conducive.

Since the creation of the G-20, members have been under severe pressure to dilute their alternative agenda and to accept the version of the agreement on agriculture put forward by the G-8. This agreement essentially sought to facilitate the opening up of the world's protected markets in emerging economies, in particular China and India, to the agribusiness of the United States and the European Union. Added to this, the agreement also sought to establish a semblance of order in the existing trans-Atlantic rivalry of the developed economies in the world agricultural export markets. The agreement aimed to regulate competition between the European Union and the United States in Third World markets that are now expected increasingly to be based on processing of genetically modified agricultural goods. …