We Should Try To Get Rid Of Textile Tariff Barriers’

 The ongoing World Trade Organisation (WTO) negotiations are gathering full steam in Geneva (WTO headquarters) with members striving to reach some sort of a framework agreement by the end of next month. India, which has emerged as a prominent player in the negotiations is taking active part in discussions with various groups of countries. WTO’s former deputy director general Anwarul Hoda, who also led India in the Uruguay Round negotiations, believes that the country can achieve a lot from the negotiations if it uses its bargaining chips well. In an interview with Amiti Sen of FE, Professor Hoda, who has been appointed a member of the Planning Commission, shares his views on India’s role in a multilateral world.

Has India’s relevance in the state of play of things at the multilateral level increased in the last decade and a half?

Yes, certainly so. In the pre-reforms period, major industrialised and industrialising countries had virtually written India off. Although, India was viewed as a potentially big economy, it followed insular economic policies and was quite adamant in the negotiations. There was a general perception that it was better to circumvent India rather than get it on board. However, after India started implementing reforms, the rest of the world became excited and wanted to trade with India. India is now being looked at as an emerging economic superpower after China. There has been a sea-change in the outlook and attitude of developed countries towards our country.

How do you think India is rated by the world vis-a-vis China?

Investors are certainly looking at China with more interest. However, in the ongoing WTO negotiations, China is not playing as important a role as India. The economic giant is actually seeing its way through as it is a relatively new entrant.

Do you think India can strike a good deal in the negotiations?

I would not like to do crystal ball-gazing. However, since India has decided to integrate into the world economy, it is imperative for it to get a good deal. India should ensure that its economic interests are well looked after. For example, we should try to get rid of tariff barriers in textile and clothing. We should also push for steep reduction in agriculture support and protection.

Apart from the country’s interest in protecting its vulnerable farmers, do we stand a chance in increasing our agriculture exports by bargaining well in the agriculture negotiations?

India has an emerging interest in exports of temperate zone products, like rice and wheat. If developed countries lower their subsidies, then India can also become a major exporter of sugar and milk products. Of course, it will be difficult for India to penetrate developed country markets as they would have non-tariff barriers, like stringent sanitary and phytosanitary (SPS) guidelines in place. But India could find a big market in the Third World countries. With the lowering of export subsidies and domestic support by developed countries and the resultant rise in prices of products originating from there, India could make its presence felt prominently in the developing country markets.

How much are we expected to gain from the services negotiations?

In services, we have vast potential in Mode 4, which is related to the movement of natural persons. The potential has been realised to a certain extent in the US, but not so much in Europe. In business process outsourcing (BPO), too, the maximum opportunities are coming from the US. The vast European market is yet to be tapped well. There are also areas where we need to open up. Since there is so much opportunity in the services sector, it is vital for us to get a good deal in the negotiations. However, the negotiation process is long. We cannot expect gains in the near future. The ongoing WTO discussion has to go beyond its full length. It will not be possible to have an agreement before the end of 2006 or middle of 2007.

Do you think India is handling itself well in the ongoing negotiations? Is there room for change in India’s attitude?

India is certainly doing much better today than before. Earlier, it was felt that India was going against the mainstream when it opposed the inclusion of new issues, like investment and competition policy. However, now a large number of developing countries share India’s point of view. There is a general feeling that there is no use overloading the WTO agenda. At present, India is handling itself very well in the negotiations and should continue doing so.

What do you think of the new developing country alliances, like the G-20, which have started emerging? How seriously should India take these?

India should take the alliances very seriously. It should realise that what it can achieve as a group, it can never achieve on its own. The G-20 is an excellent example of partnership between developing countries from three continents. India’s joining hands with Brazil and China in the agriculture negotiations has made a big difference to its negotiating powers. It is a very good development and India should strive to build on it.

What role do you think the government could play in boosting India’s trade as well as its image? What requires to be done at the policy level?

The government should continue the economic reforms which were started by Manmohan Singh in the early 90s. This is the best thing that it can keep doing. Of course, reforms should be all-inclusive and should come with a human face.