Trade: "We Would Like a Fair Deal"

India's Arun Jaitley talks about the failure in Cancún and the future of trade talks

India's Commerce & Industry Minister, Arun Jaitley, led the country's delegation to the Cancún trade talks in mid- September. The talks were supposed to result in progress toward a new World Trade Organization agreement but ended in a spectacular failure, with the delegates unable to agree even on what should be the agenda moving forward. Developing countries want to cut the $350 billion-plus that rich nations spend each year supporting their farmers. But they resisted talks on more transparency in government procurement. A fierce opponent of agricultural subsidies, Jaitley is among the leaders of a new grouping of developing countries that emerged at the talks. He spoke to Asia Regional Editor Mark L. Clifford in Hong Kong on Sept 24. Edited excerpts follow.

What is your assessment of Cancún?

Cancún failed to produce a document but succeeded in throwing up an agenda focusing on trade distortions in agriculture. Cancún also indicated that the WTO, instead of being only driven by a few, will have to be more participatory. Both of these developments are very positive for the WTO. It certainly marks a shift in the equilibrium.

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

The group of 22 has enabled developing countries to raise their voice. They are being heard. When smaller countries were [pushing for freer trade in agriculture] not many listened to them. When major countries like India and China join in, it becomes a group that has to be noticed. We are certainly concerned with the fact that the talks have not moved forward. We would like a fair deal. We are not happy with the no-deal situation.

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. These are food security and livelihood concerns. We need to improve the lot of our farmers. But prices in developing markets are depressed primarily on account of high subsidies given by developed countries. Reform has to result in the elimination of export subsidies, the reduction and eventual elimination of other trade-distorting domestic support subsidies, and gradual improvement in market access.

What are you offering in return?

The developing countries and the poorer countries have already paid enough. It would be inequitable to even suggest that for ending distortions they have to pay more.

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

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

What will we see in terms of Chinese-Indian cooperation going forward?

I see China and India as great countries, large developing economies, and also economies that supplement each other. [At the trade talks] we have similar interests. We [also] treat China as a competitor. China in the manufacturing sector is laying down new standards. India is doing the same thing in the services sector. We are trying to make ourselves more competitive in the manufacturing sector. It's always good to learn from others.

What flexibility is there on the issue of greater government transparency?

Post-Cancún, I am not so sure the EU is in a position to push for them. I got a distinct impression that they were willing to give up some of the issues.

Even some domestic critics in India say that you are unwilling to negotiate these issues because you want to protect a system that allows politicians to continue skimming cash off the top of government procurement contracts.

That's not a fair comment. India's stance on transparency and public procurement has always been very clear. We stand for transparency in public procurement. Procurement without a public tendering process in India would be unthinkable. There are no private negotiations. We are fully committed to transparency in public procurement. We had our doubts only on a binding agreement and multilateral dispute settlement mechanism.

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