Many pundits (including yours truly) were surprised when the then-ruling BJP party was booted out by Indian voters in 2004. With its mantra of "India Shining," the BJP thought it could capitalize on the emergence of the Indian economy from the self-deprecatory "Hindu rate of growth" to something decidedly more pacey. Left out of the BJP's calculation were the many marginalized who felt that the benefits touted by the BJP did not reach them. In contrast, the Congress Party has typically adopted more egalitarian rhetoric. The Gandhian legacy remains strong, and Indian Commerce Minister Kamal Nath is surely not one who is outside this mold. The so-called G4 spearheading the WTO negotiations are led by, respectively, US Trade Representative Susan Schwab, EU Trade Commissioner Peter Mandelson, Brazilian Foreign Minister Celso Amorim, and India's Nath. Among these four, Nath strikes me as the most colourful (in a good way); cutting a distinctive figure. Is it just me or does he have a passing semblance to Tom Jones? Maybe it's not unusual.Anyway, while searching for something else, I came across a transcript of a presentation by Nath at the Carnegie Endowment for International Peace on the very topic of WTO negotiations. There are many insightful comments from Nath in the transcript on India's stance at the WTO (or, at least the Congress Party's). Unsurprisingly, one of the points of emphasis is that agriculture, particularly subsistence agriculture, remains a widespread feature of Indian economic life:
We do talk of poverty, we talk of the LDCs, but sometimes when one sees numbers, the numbers of India’s growth...India’s prowess in the IT sector, one overlooks that India has 300 million people [living on] less than one dollar a day...India still has 650 million people engaged in agriculture, with about 80 percent – over 80 percent having land holdings of less than one hectare or one and a half hectares, which is not commerce but is subsistence agriculture. While we talk of India’s strengths in the manufacturing sector, in the high-tech manufacturing sector, we also look at the enormous cottage industries, the small-scale industries. We look at the large infant industry.OTOH, he seems to be asking for the impossible in liberalizing trade without downsides for those in the developing world:
That is the picture of India, which has to be looked at in real terms, because sometimes I hear these words of large, developing countries, large, emerging countries. Of course we are large. Of course we are emerging. Well, what does that mean? That doesn’t mean we don’t have 300 million people [living on] less than one dollar a day. That doesn’t mean we don’t have 650 million people in agriculture, in subsistence agriculture, and I’m reminded that in Potsdam, telling the United States that you are one million people engaged, employed in agriculture – I have 1.5 million in my district. So that’s what you are talking about, and I said, you are batting for the protection and promotion of prosperity, and I am batting for the protection of livelihood. Now you don’t require any rocket science to understand what you should – what really should prevail.
We are growing at 9.4 percent. I want a formulation where I grow at 11 percent. I don’t need a formulation to grow at five percent. That is the crucial thing. And that’s what all the developing countries are saying: please give us a formulation which increases trade flows but does not dislocate because if you are going to dislocate in developing countries where there is no social net, in the ultimate analysis, you’re not going to have healthy economies, and that is the crucial thing which we must take note of.And, of course, there's his case for greater Mode 4 migration:
We’ve got to be looking at services. I understand services is difficult. I understand services is – immigration is a sensitive issue. I don’t want to talk about immigration. But certainly I want to talk. I want to talk about contractual service providers. I want to talk about the one-month or the two-week or a five-week visa which is not immigration, where our software engineers cannot even integrate software development because they can’t get a visa for one month or three weeks. That’s not immigration. And if you don’t do that and if you have a domestic regulation which frustrates it, it’s a non-tariff barrier.Nath also develops a theme on why the lack of Western corporate interest pushing the round has helped it falter:
If you compared it with the Uruguay round, the big difference with the Uruguay round was that there was strong private sector corporate interest in the United States and the EU pushing for the round, someone who really wanted the round. That’s not the case in this round. I mean, the private sector is almost conspicuous by its absence. So nobody really wants the round that badly, one.There's a lot more in the transcript, though you can read it at your leisure. It's worth reading insofar as it does clarify some of his negotiating positions as perhaps the most important negotiator at the current WTO talks.
Two, the whole thing about the Doha development agenda is a bit of a myth, I would say, because if you look at any study done on what the impact would be on the least-developed countries, even a study done recently by Carnegie, it’s completely ambiguous. The poorest countries tend to lose from preference erosion, food prices could go up by subsidy reductions, so it’s very mixed. So the whole Doha development agenda has been a bit of a sell and a myth.
So given all this and the electoral pressures and the timing pressure that you spoke about, isn’t the world and your efforts as well should be devoted to actually quietly laying this beast to rest and planning for the post-Doha world? I mean, it could be a very different world, and we have some ideas on what the world should look like, but carrying on with this trying to raise this beast that has no breath in it anymore, plan for – I mean, let’s be realistic, let’s be honest and say the Doha round is dead. Let’s get back to the drawing board and think creatively about what the drawing board should come up with.
