July 27, 2006, Thesynergyonline News Service
New Delhi, India

“HISTORY repeats itself is a cliché, but we should learn from the Uruguay Round negotiations and continue our strive towards liberalising the multilateral trading system,” said Pradeep Mehta, the head of CUTS International while releasing a statement on the recent collapse of WTO talks. Incidentally, in 1990 the Uruguay Round talks were collapsed because of differences between EU and US over farm liberalisation. The then head of GATT, Arthur Dunkel then came forward and produced a forward-looking text, which was known as the Dunkel Draft. It is time that the present head of the WTO, Pascal Lamy take a similar step, Mehta said.

However, Lamy’s job will be much more difficult than Dunkel’s. A greater number of players are now involved with negotiations, as stakes are much higher than in early 90s. Issues are more complex. In the words of Lamy: “The United States must offer deeper cuts in its farm subsidies, the European Union must further drop barriers to farm goods’ imports and the big developing countries must agree to open up their markets for industrial goods.”

On the last point, India is insisting that distortions in farm trade should be removed first before any move on other fronts. India has blamed the US for the current round of impasse and predicted that it will take months and years to put the Doha Round of negotiations back on track.

“A no-deal is certainly better than a bad-deal, but we should keep in mind pitfalls of a failure of Doha negotiations and act on several fronts,” Mehta argued. A likely pitfall could be that trade disputes (on account of trade remedial measures and otherwise) will increase and developing countries may be at a receiving end. Secondly, there may be increasing use of non-tariff measures with significant negative implications on the livelihoods of the poor.

Indian trade minister, Kamal Nath has rightly hinted that the focus of trade liberalisation will now shift to bilateral and regional agreements. Such preferential trading arrangements can be used as building blocs for trade liberalisation, but unless appropriate safeguards are taken they may not be as beneficial as one would like to think. India is about to start discussions with the European Union for a comprehensive economic cooperation agreement.

On the other hand, the Association of South East Asian Nations (ASEAN) has unilaterally suspended its negotiations with India on a free trade agreement, citing that India is refusing to open up its market for those products, which are important for ASEAN countries.

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