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October 25, 1999


India against talks on non-trade issues at WTO's Seattle round

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Commerce and Industry Minister Murasoli Maran today said the agenda at the Seattle ministerial conference of the World Trade Organisation, to be held later this year, should be balanced and developing country friendly.

In an intervention at an informal pre-Seattle ministerial meeting of key WTO member countries in Lausanne, Switzerland, Maran said: ''The agenda at Seattle must be balanced for then alone can the results be balanced and contribute to development.''

The issues of implementation of the Uruguay Round agreements must also be addressed upfront and key imbalances in the existing agreements must be removed, Maran said.

The review process that was currently underway or due shortly, should reconsider the full impact of limiting policy options on the competitiveness of developing countries, particularly in respect of subsidies, intellectual property rights and trade related investment measures.

The Union minister said that the developing countries must be assured that when their interests were at risk, the WTO system would respond positively to fully address their concerns. A fair and equitable multi-lateral trading system is essental to restore the credibility of the two systems in the eyes of developing countries.

This is vital in view of the deep scepticism prevailing among people about the WTO and its attendant benefit.

Special and differential treatment for developing countries as a means of guarteeing them adequate flexibility should be made part of the contractual obligations of the rule-based system. Elaborating on India's concerns, Maran said: ''We have heard several calls for a developing round and of development being at the core of the agenda. If this objective is to be realised, it must be ensured that the WTO system sub-serves development and does not subvert it. "Only then would this organisation have credibility in the eyes of the developing world,'' he added

''We are strongly opposed to non-trade issues, which only have tenuous links with trade being brought into the agenda of the WTO. To seek to deal with extraneous subjects, on the basis of principles governing commercial transactions and based on the sole reasoning of trade advantage, could ultimately distort development itself."

He referred in particular to proposals to broaden the scope of the WTO's mandate by having disciplines on investment per se as well as labour standards and environemntal concerns being sought to be used to protect domestic industry.

Emphasising the need to ensure fairness and equity in the WTO system from the viewpoint of the developing countries, Maran said ''We are not talking here merely of provisions relating to special and differential treatment of developing countries, which have largely consisted of longer transition periods and technical assistance, which even by themselves are both inadequate and insufficient. In fact, such meagre palliatives do not address the needs and aspirations of developing countries which the multilateral system must necessarily address.

"The WTO disciplines should allow sufficient freedom and flexibility to the developing counties to pursue their development strategies and must make a distinction between developed and developing countries where such a distinctioin is warranted. The Human Development Report 1999 has very well documented the increasing inequality between countries even in this decade."

Another key issue, he said, was that of in-built imbalances in some of the Uruguay Round agreement which had come to light even more dramatically during their implementation in the last five years.

''Far from favouring developing countries, they have imposed even more onerous obligations on them. Also, in the Uruguay Round, the developing countries provided significantly enhanced market access by sharply reducing their tariffs and binding a large proportion of their tariff lines. Yet, in textiles, an area of particular interest to many developing countires, there is no meaningul integration of restrained items even after five years.

''Even in other areas, wherever we show competitiveness in some products, trade defence measures, including anti-dumping and subsidy investigations, are initiated, effectively crippling out export effort,'' the minister said.

Underlining this particular area of concern, Maran quoted Joseph Stiglitz, senior vice president and chief economist of the World Bank, who had said that ''as developing countries take steps to open their economies and expand their exports, in too many sectors they find themselves confronting significant trade barriers -- leaving them, in effect, with neither aid nor trade. They quickly run up against dumping duties, when no economist would say they are really engaged in dumping, or they face protected or restricted markets in their areas of natural comparitive advantage, like agriculture or textiles''.

India said it was opposed to non-trade issues being brought into the agenda for a new round of global trade negotiations due to be launched in Seattle in December.

Elaborating on India's concerns, Maran said: "We have heard several calls for a development round and of development being at the core of the agenda. If this objective is to be realised then it must be ensured that the WTO system subserves development and does not subvert it."

Ministers from 25 leading trade powers met in Switzerland on Monday to try to narrow differences over the agenda for the new round of global trade negotiations.

The two-day, high-level meeting in Lausanne brings together the key players in the negotiations, including the United States, the European Union, Japan, leading developing countries and representatives of the Cairns Group of major agricultural producers.

Just over a month before the Seattle ministerial conference, major differences exist between industrial countries pushing for a broad agenda for the new talks and developing nations which are sceptical of the benefits of new trade liberalisation talks, likely to get under way early in the New Year.



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