December 28, 2005, The Hindu
New Delhi, India

By Sharad Joshi

The Minister for Commerce, Mr Kamal Nath and his team fielded a good show at the Hong Kong Ministerial.

The much-awaited World Trade Organisation’s Hong Kong Ministerial, as part of the Doha Development Round, has come and gone. And what has been the outcome? Did the developing countries get anything out of it? There is much debate on what the Commerce Minister, Mr Kamal Nath, brought back from Hong Kong.

Left leaders Prakash Karat and Anil Biswas were quoted by a daily rating Mr Kamal Nath’s performance as `Good’, and India’s role as positive. “It is true that all our demands are not met. But, given the present situation of the trade talks, it would not have been possible for the Government of India to do much better than what it did at Hong Kong,” according to the leaders. That was indeed generous, given that the Left has been attacking both the WTO and the Congress for its globalisation policies. This, in all probability, indicates that when the matter is debated in Parliament the Left has no intentions of attacking the UPA Government.

“Laddoos and jalebis for Kamal Nath” wrote Dr Pradeep Mehta of CUTS, who was part of the official Indian delegation to the Hong Kong ministerial, in a business daily. “We need to encourage Nath and his team of bureaucrats, rather than run them down. They are fully conscious of the bigger goal of protecting our farmers and achieving the goal of development not only for India but also for the whole South,” he went on.

Not much of a difference between the perception of the Left and that of the NGOs.

The performance of Mr Kamal Nath and his team can be judged by what was brought back for India at the end of six days of strenuous and acrimonious negotiations.

The ministerial negotiations had several aspects. But the key was, of course, agriculture. Team Kamal Nath had a very limited representation of the Agriculture Ministry. But, then, with agriculture’s contribution to GDP down to 21 per cent, it no more presents the same interest as it did during the Uruguay Round, even though it sustains 70 per cent of the country’s population.

The limited advance in the negotiations on the Agreement on Agriculture (AoA) should not weigh disproportionately on one’s judgment about what India, as a whole, really gained. The country has much larger interests in the industry and services sectors and inter-sector trade-offs are the reality of the day.

As to what India gained from Hong Kong Ministerial, the answer will obviously depend on one’s perception of the interests of India as also the expectations one had about the outcome.

If one expected that because of the emphasis on the development aspects in this Round, the richer countries would make all the concessions, obviously that did not happen. True, the Hong Kong Declaration assures that the Green Box would be passed in review; that there would be a safe box for the food-aid receiving countries, and that the developing countries would have greater latitude in listing the special products. But the fact remains that the rich countries have not made any concessions on the domestic support in agriculture. Even the export subsidies are to be abolished according to a calendar that suits the European Union.

Those who thought that they would get all the concessions from the United States and would not have to make any to Bangladesh in the matter of trade in garments would also be disappointed. Nationalist protectionism invariably has double standards. Its expectations are bound to be frustrated in any trade talks.

But no one really expected any significant advance at Hong Kong. In fact, most knowledgeable people knew that there would be a further round of talks, in the near future. That has happened. The new modalities are to be negotiated in another four months. That is rather an ambitious time schedule. But it at least shows the sincerity of the negotiators.

There is reason to be happy that Hong Kong was an improvement over the Cancun ministerial. In that there is a common ministerial declaration. The WTO has survived in spite of the verbal tirades and violent protests on the streets of Hong Kong. The ministers have succeeded in moving towards enunciating certain principles and the work programme for future action.

The dominant factor at Hong Kong was the consciousness of “the cost of failure”. If the ministerial had collapsed as in Cancun, that would have been an irretrievable setback for the WTO. Both the OECD and the developing countries were well aware of this reality. Similarly, everyone was aware of the fact that no agreement could be arrived at Hong Kong and that they were to use the occasion for voicing their concerns.

India had played a major role in organising the Group of 20 at Cancun. At Hong Kong, a strong bridge was built between the G-20 and the G-110 that represents the developing and the least developed countries. After the joint meeting of the G-110 and the European Union, it was clear to all that the poorer countries were in no mood to give any thing way without a stiff resistance. Mr Kamal Nath played a major role by becoming a prominent interlocutor for the group. It is the consolidation of the G-110 and the G-20 that forced the European Union to make a major concession on export subsidies on the very last day.

The Hong Kong Ministerial has kept the hope alive. If it took 60 years for the GATT (General Agreement of Trade and Tariffs) to blossom into the WTO, the WTO agreements will take a much shorter period to bring in a world, if not sans frontiers, at least with minimal barricades.

Nothing palpably concrete came out of the Hong Kong Ministerial. So, it would be wrong to deride or play up Mr Kamal Nath’s role.

After the Doha conference there was a stalemate. The Cancun ministerial failed. Mr Kamal Nath was sent as the night watchman to keep the innings going until the real stroke-play starts. The Minister (and his Team of 80) has done quite well at the crease. He should be feeling quietly confident of giving a good account of himself in four month’s time.