Proliferation of bilateral trade aggreements between developed and developing countries - lessons for India

Abstract

The Doha Ministerial Conference ended in a stalemate and all parties are blaming each other. This was one forum where the differing interests of each party came to the fore with each of them pushing their own agenda. Popularly known as the Doha Development Round as a result of the emphasis placed on the developmental implications of the trade rules on the developing and least developed nations. The major difference between the previous ministerial conferences in Tokyo and Uruguay and the present one is that developing countries have consolidated to put up a common front and have thus been able to hold up the developed countries from pushing their agenda. Another difference about the present round of negotiations is that the complexity of the negotiating mandate is significantly higher. At the first level, development concerns that have been included as the guiding principle are heterogeneous in character. Secondly the possibility of inclusion of new issues like investment, competition policy and transparency in government procurement are to be explored. At the surface level, it appears that the major loss from the failure of Doha round accrues to developing countries. However probing one level deeper, it becomes clear that there were differences in interest among the developing nations. While Brazil was seeking greater agricultural access and China was focusing on greater access for manufacturing industries, India was seeking greater service provider entry. The significance of the agricultural subsidies issue that stalled the talks is highest for the least developed nations. Hence it is the poorest farmers in the poorest of nations who are affected most by the same. Hence it might not just be the developed nations alone who might have taken to the ‘go it alone’ policy. Even the developing countries seem to have been influenced by the same. What we find happening is that the arena of rule-making is being shifted from multilateral to bilateral forums.