Seminar on "Reflections on Doha Ministerial of The Wto : Issues and Options"
August 27, 2001, New Delhi

Inaugral Address by Mr Digvijay Singh, Hon'ble Minister of State for
Commerce & Industry

Mr RV Kanoria, Vice President, FICCI
Mr Saptharishi, Additional Secretary, Department of Commerce
Dr Amit Mitra, Secretary General, FICCI
Distinguished Participants
Ladies & Gentlemen

I am delighted to be present here today for the Seminar on "Reflections on Doha Minsterial of the WTO Issues and Options" I must compliment FICCI and CUTS for jointly organizing this Seminar on such an important and timely theme, which is of great interest to all of us.

Before we turn our thoughts to the forthcoming Doha Ministerial Conference, it would perhaps be useful to take stock and reflect on some underlying issues. Our assessment has all along been that the Uruguay Round Agreements have not served all the membership well. Ever since the conclusion of the Uruguay Round, developing countries continue to experience great difficulties in capitalising fully on the benefits they expected to derive from their participation in the multilateral trading system.

During the Uruguay Round of negotiations, the developing countries had taken exacting obligations in the form of TRIPs and TRIMs, though these were not to their advantage. In return, they hoped to secure increased market access at least in the areas of textiles and agriculture. However, due to the backloaded nature of the integration of restrained textile items and also due to the perpetuation of trade distorting domestic and export subsidies coupled with high tariffs and tariff escalation in agriculture by the developed countries, the expected market access has never been realised.

Naturally, asymmetries and inequities in several of the Agreements including those relating to anti-dumping, subsidies, intellectual property, TRIMs and the non-realisation of expected benefits have been a matter of serious concern. On the one hand, India has eliminated all kinds of quantitative restrictions and is progressively reducing tariff levels; on the other, trade barriers imposed by the developed countries are becoming more and more impregnable.

Indeed, developed countries have cleverly found new and complex methods of keeping our goods and services out, at times replacing tariffs with non-tariff barriers. The frequency with which various technical standards and health-related norms are changed is only matched by their arbitrariness and lack of transparency.

Even in areas where developing countries began to acquire trade competitiveness, anti-dumping or anti-subsidy investigations have been initiated in ever-increasing numbers. Further, issues extraneous to trade such as labour standards, environment, etc. are sought to be put on the negotiating agenda.

To make things worse, pressure has been intensified by some major trading nations for starting negotiations in new areas and for launching a new round of negotiations. The main category of new issues being pushed into the WTO agenda includes international investment rules, competition policy, transparency in Government procurement, global coherence,, trade facilitation, industrial tariffs, environment, and the like

We feel, no prima fade case has been established on the necessity or relevance of the proposed new issues into WTO framework; nor it is cogently shown that the developing countries are going to definitely benefit from negotiations in new areas. On the contrary, it is rather clear that taking up new issues would result in additional obligations for them.

For example, while a multilateral investment framework does not guarantee augmented inflow of foreign investment, it would allow unrestricted operation of market-seeking foreign investors without any cognisance of our development dimension and national priorities. We feel, bilateral investment treaties are adequate in addressing the concerns of investing nations. In any case, India is opening up its economy to foreign investment in a transparent manner, and we are committed to progressive economic reforms. We do not, however, believe that there is any justification for replacing the existing system with a multilateral one, which would take away the policy-flexibility of the host countries.

With regard to competition policy, I wish to point out that several developing countries including India are in the process of enacting national competition laws and do not have enough experience of the functioning of Competition Law at the domestic level. Hence, it will not be fair to expect them to engage themselves now in negotiations for developing multilateral disciplines in this area. At any rate, there are Working Groups already established in WTO which are discussing the linkage between Trade and Competition, and between Trade and Investment. The Working Groups have not yet been able to arrive at any consensus. At best, the Working Groups should be allowed to continue their work for the time being.

Even though the current exercise in WTO covers the study of transparency in Government Procurement practices, there is every reason to be skeptical about the proposal on such an agreement. Such a proposal could actually be an initial and interim step for major developed countries in their quest for expanding market access of their entities in the area of Government Procurement. That is why adequate caution is called for in dealing with the discussions on a "transparency agreement", which should be seen in the light of such strategic objective of drawing the developing countries into the eventual goal of market access and full integration of procurement practices

India attaches due importance to environmental protection "and sustainable development. Despite the Committee on Trade & Environment (CTE) operating in WTO on the basis of an agreed work programme, the industrialised countries are trying to widen the environment window with protectionist intentions and objectives. We strongly oppose any attempt to either change the structure of CTE or its mandate, and feel that CTE should be allowed to carry on its work as per the earlier mandate without any cherrypicking of issues from the various items under discussion.

Most developing countries are of the view that environment is a non- trade issue and attempts aimed at inclusion of environmental issues in future negotiations go beyond the competence of the WTO. We are, therefore, opposed to the linkage of environment with trade in the

WTO framework since it has the potential to open the floodgates of protectionism through the backdoor.

On the issue of labour, India is fully committed to observance of labour standards and has ratified most of the ILO Conventions. We also cherish all the values of democracy, workers' rights and good governance. These issues, however, are not under the purview of the WTO. At Singapore, we decided once and for all, that labour-related issues rightly belong to the ILO. India resolutely rejects the renewed attempts to introduce these in the WTO in one form or another. WTO should in no way be involved in issues related to labour standards.

Then there is the move towards strengthening the coherence between WTO and Bretton Woods Institutions. While cooperation among international organisations may be fine, we should be careful that in the name of "global coherence" undue pressure is not exerted on developing countries through cross-conditionalities, which could further narrow down their policy options.

I have enumerated these issues and concerns at length to put across to you why we are opposed to adding new issues in the agenda for Doha Conference unless there is a full convergence of views in the entire WTO membership. And such a convergence could come about only

if implementation issues are addressed upfront and satisfactorily resolved, while contentious non-trade issues are kept off the negotiating agenda.

I would like to reiterate, mandated negotiations, mandated reviews, ongoing work programme in the various working groups, accession of over 30 countries along with assessment of the progress on resolving the implementation concerns, constitute a sufficiently large agenda for the Doha Ministerial. The Doha Conference, in my view, should basically give policy direction to the mandated agenda; review which implementation issues have been resolved in terms of the General Council decision of May 2000; and address major current issues like TRIPS and public health. Any move to inject further issues runs the risk of overloading agenda and would make it unsustainable.

It is made out in certain quarters that India with its firm stance in favour of implementation issues, has been isolated among WTO membership. This is not at all true as is borne out by the recent Conference of the SAARC Commerce Ministers, who have opposed move to extend the WTO frontiers before the inequalities between the developed and developing countries are meaningfully addressed. The Joint Statement issued at the Conference observed, and I quote • "The growing developmental deficit between the developed and developing countries should receive primacy in all future work programmes in the WTO, since the key to sustained global economic growth lay in unlocking the growth potential of the developing countries." UNQUOTE.

Similarly, in the Zanzibar meeting last month, Trade Ministers of the least developed countries demanded "significant movements in implementation issues" and a commitment to ensure an inclusive and transparent negotiating process before, during and after Doha. Our position has received considerable support among the like-minded group countries as well.

I may assure you, we shall continue to project our concerns and take every step to safeguard our core national interests. Undoubtedly, we have to meet formidable challenges in the coming days ahead of the Doha Ministerial and thereafter. We have to work hard to avert intense pressure exerted by the developed countries to get their way. We have to effectively reach out to all the stakeholders, sensitise them about the latest state-of-play, involve them in the consultation process, discuss the strategy options and take into account their inputs and views. The
process is already on and needs to be strengthened further so that our preparedness becomes foolproof.

And here lies the critical importance of synergy between the government and organisations like FICCI and CUTS. I am aware, you are doing an excellent job in this area and I appreciate your initiatives towards this end. Essentially, it is only through such collaborative approach and partnership, we would be able to evolve a stakeholder-driven negotiating position that could fully protect our national interests in WTO.

With these words, I have great pleasure in inaugurating this Seminar. I wish you all the very best in your deliberations and look forward to receiving the proceedings.

Thank you