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What WTO Hong Kong Ministerial Meet means to India?

By Dr.Tejinder Singh Rawal

In spite of all the negotiation tactics employed by the US and EU to extract their pound of flesh in respect of the concessions which they were even otherwise obliged to concede; India and the developing nations do stand to gain a lot from the Hong Kong round.

In respect of agriculture, India has gained in that the deal not only ensures that there would be no restraint on the Government's ability to provide domestic support for farmers, it also permits the developing nations to protect farmers against unfair competition from imports. The Government could raise import duties on farm produce either because of surge in imports or because the import price was too low.

In the longer run the elimination of subsidies to farm produce from the developed world would end the artificialities of world prices. This declaration can be seen as a reversal of the perpetuation of the inequities of global trade.

India has also gained from the fact that the deal calls for intensified discussions to be completed by June this year on geographical indications and biological diversity. While the former will mean that India will be able to prevent others from using labels like Basmati rice or Darjeeling Tea, the latter will enable the Government to do more to protect the rights of communities over genetic material and traditional knowledge in areas like Ayurveda.

The phasing out of export subsidies on agricultural products by 2013 is claimed to be the biggest single concession wrested from the developed countries. For this to be effective, certain loopholes that allow hidden subsidies in export-credit and food aid will have to be plugged. The phase-out is a small but important step but much needs to be done in the area of domestic support, where only the broad modalities for subsequent negotiations have been arrived at.

Even the deal on cotton, expected to benefit some of the poorer African countries, is subject to an agreement being reached on eliminating all export subsidies by the end of 2006. Under this arrangement, while the US will abolish export subsidies on cotton this year, India and other developing countries can retain higher tariffs to protect their farmers and ensure that food and livelihood concerns are met. Their need for a special safeguard mechanism based on price and volume trigger has been recognised.

In Non-Agriculture Market Access (NAMA), developing countries are not required to cut tariffs to the same extent as the developed countries. While the principle of 'less than full reciprocity' has been recognised, there is no agreement on the exact mechanics for such reductions. Only subsequent discussions will bear out whether the developing countries have given away too much under NAMA in return for concessions in agriculture.

The EU finally agreed to do away export subsidies on agricultural products by 2013 thereby contributing to the most visible result. India and Brazil, two large countries deeply involved in agricultural issues, led the discussions on behalf of all developing countries. Again in agriculture trade, developing countries were able to ensure that a mechanism will be created to counter low priced agri-imports that can hurt the interests of their farmers. This major safeguard could not have been institutionalised but for the widespread support from many other countries.

The smaller developing countries actually showed tremendous resistance and alliance-building efforts during the negotiations. Keep in mind, about 30 developing countries don't even have the resources to field permanent staff in Geneva, where the WTO negotiations are ongoing, so the challenge to even know how the negotiations will affect your country can be overwhelming. A huge group of 110 countries met in Hong Kong to coordinate positions, in what is probably the largest meeting of developing countries within WTO history.

Conclusion: But a final agreement is a long ways off. As the credibility of the entire model of corporate globalization continues to erode, based on its failure to promote growth and development, it can still be stopped.

A careful reading of the Hong Kong Ministerial text shows that despite days of hype about development being at the core of the Doha agenda, the relevant paragraph 38 literally is a 'cut and paste' of language from the original 1994 WTO agreement! After ten years of negotiations at the WTO, developing countries have given enormous concessions but in return they have gained a restatement of the WTO's charter agreement.

This means that developing countries were pressured to trade the privatisation of their services and industrial future for a 2013 target date to eliminate export subsidies that should have been abolished long ago and a promise of future development aid, most of which is actually designed to 'aid' countries in restructuring their domestic economies to accommodate the privatisation of their services and the selling off of their industrial futures.

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