Pascal Lamy Calls upon India to Team Up with US to Revive Doha

- A Report by Arun Goyal, Editor -

The WTO DG Pascal Lamy addressed a packed house at FICCI on the 29th of January in the run up to the December Bali Ministerial. The Commerce Ministry was represented by Rajiv Kher who put forward the traditional protectionist concerns of India. The meeting was organised jointly by CUTS and FICCI.

Lamy said that an understanding of trade today is a must to inform the political concerns of national governments. Today more than 50 percent export depends on imports. 40 percent of imports are made up of parts and components. Bilateral and regional trade agreements favour the strong countries. India can afford to meet the loss due to the weakening of multilateral trade vis-a-vis regional and bilateral trade but the small countries cannot stand up in the new milieu. They have to globalise to survive.

Indian bound tariff is 50 percent but applied tariff is 15 percent. This gap is under attack in the Doha market access negotiations. If India accepts the US demand to bring the 50 down to 25, Doha will revive. India, Brazil and China are different from the LDCs and must pull their weight in Doha negotiations.

Regulatory convergence

Lamy also said that regulatory affairs convergence in global trade administration is of even greater importance than tariffs to bring order in movement of goods and services.

Banking convergence although not the subject matter of WTO will, in a similar way, lead the world out of the current financial crisis in both fiscal and monetary affairs.

Expansion of global supply chain is yet another subject in today’s trade. Goods and services cross many borders in several directions during production and trade before entering the consumers’ door.

Value addition in world trade is redefining the traditional meaning of exports and imports. Services trade is double at 40 percent in value terms.

In the high range countries of China, Japan and EU, 30 percent of GDP is trade. India and Brazil are at 15 percent. US is only 10 percent.

Trade facilitation

Border costs are three to four times the tariffs. Land locked countries are starved by border costs.

Father of trade facilitation was Kautilya. India and US should agree to push negotiations forward.

Trade facilitation, Agri rules and LDC support are three will be the low hanging fruit which can be harvested at Bali for a mini Doha.

Microsoft complained in the question answer session on Indian practices of customs valuation. It said deviations from WTO rules should be checked. WTO must align theory with practice and there must be a fair set up.