The Hindu Business Line : Hong Kong Ministerial: Much ado about something

The remedy and the way forward seem to be inherently complex and even confusing, considering those who resist and others who rely on the process of implementation of this multilateral agreement.

Rigorous resistance

An important official protest comes from the victims of the Bhopal gas tragedy who will be conducting rallies against the Ministerial meet to be held in Hong Kong from December 13 to15.

According to them, the proceedings will destroy India's agrarian economy,which will, in turn, threaten the livelihoods of those who depend on agriculture.

On the other hand, industry is more sanguine about the Hong Kong meet given the rapid growth of the services sector, and has stated that the Ministerial will further benefit India.

ActionAid, a group for trade justice, is not so sure and argues on its Web site that the rich countries continue to play their game of bluff and bravado and are unwilling to make drastic cuts in their agricultural subsides or desist from urging poor countries to open their markets to unfair foreign competition. The group is planning demonstrations outside the meeting to express its stand.

The Ministerial is expected to bring to Hong Kong about 10,000 people from all over the world to oppose free trade world wide, as represented by the WTO.

Aside from such confrontation, the growing violence in the recent past on WTO issues is disturbing. Scenes of burning cars, riot police, suicides and all manner of anti-WTO campaigning are the obvious fallouts of the increasing contempt of rich nations' persuasive pressure and its effect on the helpless victims from poorer countries.

While the resentment towards the WTO is experienced in varying degrees by different groups or nations, the common sour point seems to be agricultural subsidy.

It is estimated that developed nations give anywhere between $250 billion and $360 billion each year through subsidies to protect domestic interests.

They offload their agricultural produce on developing nations through artificial and unfair pricing.

Such subsidies keep American and European farm output competitive against that of the developing nations, which can produce them for far cheaper.

The developed countries try to brow-beat the developing nations into removing all protectionist measures, even while they refuse to open to select sectors.

The subject of farm subsidy with issues such as expanding the base of compulsory licensing on `national emergency' to protect domestic interests under patent cannot be summarily rejected.

Request from the rich

A feeble request for compromise was made by the rich nations which recently convened in London, appealing for a renewed `spirit of compromise' in the Doha Round global trade talks. Present at this meet were China, Russia, Brazil and India, probably identified as the four big performers.

The gratifying aspect of this meeting is that it advocated what it calls "a comprehensive development package" for developing countries and, in particular, the less developed nations.

Whether the said `package' becomes a reality or not, such an attempt is at least an acknowledgement of some glaring inequalities in the implementation of the WTO programme.

It is also interesting that the views propagated by the West, in particular, need not reflect the collective opinion of its citizens.

For example, protectionist sentiment is stirring within the US and in parts of Europe, with rising concern over the growing dependence of manufacturing in China and increased outsourcing to India.

There are already legislations in the US and elsewhere prohibiting government jobs from being outsourced and political lobbies are issuing assurances to their constituency that they would stop what they call `stealing of jobs' by Asians. In the recent past, non-trade barriers have been resorted to by the West, to protect the domestic producers.

The West and the developed world could resort to such protectionist safeguards with their established mechanisms, expertise, and strong internal lobby, whereas, the developing and poor countries either remain silent spectators or are reduced to lodging protests

Perplexing remedy

With many countries involved in commercial contracts, these are invariably complex. Oftentimes, transnational corporations get to see only the `buying and selling' part of the business with the human and cultural side remaining in the shadows.

This often leads to protests of all kinds organised by those victimised. This again paints an ugly picture of global trade negotiations in the WTO setting.

The poorer nations will be the worst hit with no competitive advantage and they may be even left out of regional trade arrangements. Countries that primarily depend on their domestic market may be marginally affected.

The mismatch among the member-countries needs to be addressed, not mechanically, with strict time-bound stipulations, but considering their domestic, political and cultural dynamics. But such an approach seems impossible

given the huge income divide across nations.

The consequence could be particularly disastrous in highly populous countries that risk losing the income-earning potential of their rural masses who rely on the immense bargaining power of the transnational corporations.

India and China, representing a third of the world's population, can form a formidable partnership, to drive the best bargains in their own commercial interests.

(The author is a Chennai-based advocate and a fellow of ICAI.)

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