Where the Cancun Talks "Succeeded"

Indian Commerce & Industry Minister Arun Jaitley says after the breakdown in Mexico, the WTO will have to be more participatory

Arun Jaitley, India's Commerce & Industry Minister, led his country's delegation to the World Trade Organization talks in Cancun, Mexico, earlier this month. Designed to make progress on a new WTO agreement, the talks ended in a spectacular failure, with the delegates unable to agree on what the agenda should be moving forward (see BW Online, 9/22/03, "What Comes After Cancun?").

A fierce opponent of agricultural subsidies -- one of the key issues that derailed the Cancun talks -- Jaitley is among the leaders of an unprecedented new grouping of developing countries that emerged at Cancun. He spoke to BusinessWeek Asia Regional Editor Mark L. Clifford in Hong Kong on Sept 24 about the new alignment of developing nations and what they're looking to accomplish. Edited excerpts of their conversation follow:

Q: What's your assessment of the Cancun trade talks?


Cancun failed to produce a document, but it succeeded in focusing on trade distortions in agriculture. Cancun also indicated that the WTO, instead of being driven by only a few, will have to be more participatory. Both of these developments are very positive for the WTO.

Q: Where does the group of developing nations that banded together for the first time at Cancun go from here?


The group of 22 (G-22) is a combination of offensive and defensive interests on the part of its members. It has enabled developing countries to raise their voices and be heard. Alone, our capacity to be heard was not so large.

We are certainly concerned with the fact that the talks haven't moved forward.... We would like a fair deal. We're not happy with the no-deal situation.

Q: What would you like to see on agriculture?


For India, agriculture is politically very sensitive, economically very important, and socially very delicate. We have 650 million people who depend on agriculture for their livelihood.

We need to improve the lot of our farmers. But prices in developing markets are depressed primarily on account of high subsidies given by developing countries.

Q: Specifically, what do you want?


Reform has to result in the elimination of export subsidies, the reduction and eventual elimination of other trade-distorting domestic support subsidies -- not merely the shifting of subsidies from one category to the other -- and gradual improvement in market access. Reforms by developing countries [will only] come once reforms start with the developed world.

Q: What are you offering in return?


The developing countries and the poorer countries have already paid enough. The Africans have paid enough on cotton. It would be inequitable to even suggest that they have to pay more to end these distortions.

Q: Has the developing world gotten a raw deal in recent trade rounds?


That is a feeling shared by many. The draft at Cancun that failed did very little on subsidies but wanted developing countries to make deeper cuts on tariffs.

Q: What will we see in terms of China-Indian cooperation going forward?


I see China and India as great countries, large developing economies that have a number of similar interests, such as agriculture. We are looking on doubling our trade with China over the next three years. We already have $5 billion in [annual] trade now.

We [also] treat China as a competitor. In the manufacturing sector, China is laying down new standards. India is doing the same thing in the services sector, [but] we are trying to make ourselves more competitive in the manufacturing sector. It's always good to learn from others.

Q: What flexibility is there on the so-called Singapore issues, regarding more government transparency in developing nations?


Post-Cancun I'm not so sure the European Union is in a position to push for them.

Q: Even some critics in India say you're unwilling to negotiate these issues because you want to protect a system that allows, to quote one of your critics, "politicians in developing countries to be corrupt by not discussing issues like transparency in government procurement."


That's not a fair comment. India's stance on transparency and public procurement has always been very clear. Procurement without a public tendering process in India would be unthinkable -- there are no private negotiations. We had our doubts only on a binding agreement and a mechanism for settling multilateral disputes.

Edited by Patricia O'Connell

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