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India throws spanner in EU's WTO plans

Ranvir Nayar in Brussels

With a sudden flare up of activity by India to oppose broader negotiations at the World Trade Organisation meeting in Doha, a nasty surprise awaits the European Commission's top brass.

Before leaving for their annual, month-long vacations, EC's top officials, led by Trade Commissioner Pascal Lamy, had been optimistic about the possibility of launching a new round at the ministerial meeting of the WTO to be held in the Qatari capital in November.

But now European Union officials hope India will come round to the new round sooner than later. Unequivocal statements by Indian leaders, Prime Minister Atal Bihari Vajpayee and Commerce Minister Murasoli Maran, have clearly put a spanner in the European wheels.

What is perhaps even more surprising to the Europeans is that not only is India still opposed to the new round, but it has started lobbying amongst the developing countries and building up a front to oppose the developed world that wants to impose a new round at Doha.

The joint declaration by commerce ministers of the South Asian Association for Regional Co-operation last week about the need to sort out pending issues like implementation of the previous accords before launching a broader round has put a spanner in their works.

For India, a powerful member of the seven-nation SAARC, the declaration serves a dual purpose of assuring itself that it would not be isolated at Doha, one of the main planks of European and American policies.

A senior EC official, charged with building up support for negotiations, said: "We are positive that the new round will indeed be launched at Doha. The entire process has been gaining momentum. The US has come out in favour of a new round. Most developing countries are also prepared for the new round. We have a new strategy, especially new ideas on competition and investment."

The official admitted India and Malaysia have been opposing the new round on grounds of principles and that the developed world needed to address the issues raised by the two countries before the new round could be launched.

But another senior EC official said: "If it continues to oppose the new round, India stands a huge risk of being totally isolated at the ministerial conference. We see a rapidly developing support for the new round, even amongst the developing countries."

The EU believes if it promises to include the implementation question on the agenda, it could win support of several developing countries. "The main challenge is to address the concerns raised by India on environment, investment and competition. But we have also scaled down our ambitions on these issues.

"We would like to take the General Agreement on Trade in Services approach in investment where each country identifies the areas where it is okay with liberalisation and the rest remain off the list," says the EC.

But clearly, as the Indian utterances underline, the West has so far underestimated the importance that developing countries attach to the resolution of outstanding issues, arising due to previous trade agreements.

As Lamy returns to the job, he may have to start from the scratch and make some significant concessions to India and other developing countries, if the EU wants to see the launch of even a very limited new round in November.

Indo-Asian News Service

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