India committed to rule-based trading system: GoI

EPP News Bureau - New Delhi

The multilateral process is extremely important and India firmly believes ‘‘rule based trading system provides a fair, transparent, predictable, secure and durable environment for trade relations between nations,’’ stated S N Menon, special secretary, Ministry of Commerce, Government of India (GoI).

He said that India is willing to work together and engage in a process of give and take so that mutually acceptable outcomes may be reached. ‘‘Movement forward demands understanding and accommodation. We are willing to engage in this,’’ he remarked.

Menon was speaking at a session on ‘The WTO and the Cancun Meetings: Implications for India’ at the 3rd Asia Pacific Executive Forum, jointly organised by the Confederation of Indian Industry (CII) and East-West Center, USA.

On India’s concerted efforts on bilateral arrangements, he said that while continuing to engage in the multilateral negotiations at the WTO, India was also actively engaged in enhancing trade through bilateral and regional arrangements. ‘‘Free Trade Agreement (FTA) and Regional Trade Agreement (RTA) are under negotiation with many countries. These will provide increased access to our exports in those countries while providing reciprocal access to our own markets.’’

He continues, ‘‘We see the bilateral and regional process as complementing multilateral trade liberalisation.’’ These FTAs signal India’s willingness to open up trade - but on India’s terms and addressing the concerns, he added.

Highlighting the fact that development should be the focus of trade policy, he said that given the context of a globalising world and India’s own increasing integration into the global economy, it must be emphasised that ‘‘for India, WTO and the multilateral trading system form the cornerstone of our trade policy.’’

‘‘We engage in multilateral trade negotiations to seek benefits for our country in the form of improved market access and fewer trade barriers. In return, we offer concessions in the form of domestic market access to importers,’’ he said.

Talking on Cancun and beyond, Menon, in no uncertain terms, remarked that the developments at Cancun had been disappointing. He said that India was interested in having a healthy, effective multilateral trading system, which would provide the institutional backdrop for a process of economic development, which would be of benefit to all countries.

Rahul Bajaj, chairman & managing director, Bajaj Auto Ltd, in his address, said that for the Doha Development Round to conclude successfully, two conditions should be satisfied. Firstly, he said, the modalities of agricultural negotiations should be finalised in such a way that the major responsibility for liberalisation rests with the developed countries who are responsible for the existing distortions and secondly, the desire to commence negotiations even on one of the Singapore Issues should be abandoned.

He said that India does not have any difficulty in accepting the philosophy of liberalisation, but it has to be fair and equitable. ‘‘We in India cannot accept attempts by developed world to undermine critical elements of the Doha Work Programme, which are designed to give developing countries a share in the growth of world trade commensurate with the needs of their economic development.’’

Clyde Prestowitz, president, Economic Strategy Institute, USA, said that when WTO was in crisis and the only way out was EU, Japan, India, the US and China, decide to resolve the issues plaguing the WTO today. He said that the problems stem from the fact that it was grappling with serious and sensitive matters such as agricultural subsidies, regulation of the services sector, movement of labour etc. That is why there have been a series of failures, he said.

He remarked that FTA’s are also becoming threats for the WTO. ‘‘By creating a network of FTA’s, we are following the preferential trade system of the G30’s. It is now incumbent upon countries such as EU, US, Japan, India and China to resolve these issues and ‘‘not kill the goose that lays the golden egg,’’ he remarked.

Thomas O Keefe, president, Mercosur Consulting Group Ltd, Washington DC, said that it was in the interest of both developed and developing nations to get the WTO talks back on rails. The main reasons for it he said was that alternatives such as bilateral trade arrangements do not protect the interest of developing countries.

R V Kanoria, chairman & managing director, Kanoria Chemicals & Industries, said that bilateralism should be integrated into WTO and not allowed to proliferate as it has completely diluted globalisation as envisaged under WTO. He also said that if five countries - India, China, the US, EU and Japan - come together, the Doha Development talks can be put back on track.