WHY INDIA IS OPPOSING NEGOTIATIONS ON NEW ISSUES
Date : 07 Nov 2001
Location : New Delhi
India has been opposing negotiations on non-trade issues or new issues in the WTO which include issues like Investment, Competition Policy, Transparency in Government Procurement, Trade Facilitation, Environment and Labour. In a presentation on India's position on various WTO issues made at the Economic Editors Conference held last month and at subsequent interactions, the reasons for India's opposition to negotiations on new issues are detailed as below:
Any multilateral agreement may take away the right to screen investments at pre-establishment stage and may also curtail the flexibility available to developing countries in formulating FDI policies to fulfil their development policy objectives.
Existing BITs (Bilateral Investment Treaty)/BIPAs (Bilateral Investment Protection Agreement) are subject to domestic laws and regulations and are sufficient to take care of interests of both the investors and the host country;
Multilateral rules do not guarantee any increased investment flow to developing countries;
On the other hand, prescribing of minimum standards on labour, environment etc., might reduce investment inflows into developing countries;
Also, MIGA (Multilateral Investment Guarantee Agency) protects against all types of non-commercial risks;
As such no need to have any separate multilateral agreement in WTO. Trade rules not suitable for investment and WTO not the right forum; and
FDI could trigger BOP problems but no feasible safeguard like Art. XVIII-B of GATT as relevant to trade in goods in sight.
Cross cutting nature of Competition Policy provisions might have implications for the flexibility negotiated in other agreements;
Developing countries like India have limited experience with domestic competition law and no experience in international cooperation;
Some countries even intend to bring governmental measures within its ambit;
No guarantee that multilateral rules will discipline RBPs/Export cartels etc.; and
Extra territorial reach is only though positive comity only through sharing of non-confidential information. May not be useful in cases that matter.
(NB: On both Investment and Competition Policy India has opposed even the "plurilateral approach" for the following reasons
As a tactical ploy, the developed countries are suggesting plurilateral approach for investment and competition policy;
A plurilateral agreement, once allowed within WTO, will not reflect the concerns of developing countries;
It will indirectly prove the necessity for such agreements within WTO;
The non-signatory members may acquire a negative image of not being investor-friendly;
Later on when a non-signatory wants or is forced to join such an agreement , there may not be any consideration for their concerns. It will create differentiated rights and obligations amongst the members; and
If Investment and Competition Policy can have opt out clause, why not TRIPs also.)
Transparency in Government Procurement
As of now procurement by government agencies for its use and not for commercial resale is exempted from national treatment obligation;
Elements as indicated by its proponents go beyond transparency and border on market access;
If a multilateral agreement is allowed within WTO, the development dimension of public procurement like infant industry protection, preferences to SSI, backward regions etc., may be got compromised; and
As of now there is no consensus in the Working Group on the likely elements of negotiations.
WTO is not an appropriate forum -- elements of simplification and modernisation of customs procedures are already in the revised Kyoto Protocol;
For developing countries, tariff revenue is a very important component of overall revenues and as such adequate regulations and checks are necessary to ensure non-leakage of revenues;
Developing countries may face problems of technological capabilities and financial resources for a time bound implementation of commitments; and
Application of DSU (Dispute Settlement Undertaking) can be highly encompassing which is dangerous.
We cannot accept any negotiations on Environment since we are convinced that the existing WTO rules are adequate to protect all legitimate environmental concerns;
A Committee on Trade and Environment (CTE) has been functioning since 1995 and has the mandate to give recommendations on whether any modifications are required;
CTE has been working on a 10-point balance agenda having issues of interest like TRIPs and Environment, market access to developing countries, prohibition on sale of domestically prohibited goods etc.;
While the proponents of this issue want to "cherry pick" issues like precautionary principles, MEA (Multilateral Environment Agreements) compatibility with WTO, eco-labelling etc. could be used for protectionist purposes; and
We are ready to cooperate with the work programme of CTE which has a 10-point balanced agenda before it.
We are opposed to any linkage of trade with labour issues in WTO;
Once the Singapore Ministerial decided that ILO is the competent body to handle the issues, we do not want it to be reopened for inclusion in the WTO agenda; and
Even otherwise the intention of its proponents is not to protect labour interests but to somehow blunt the comparative edge of developing countries in producing labour intensive products like textiles.
We are not convinced about the need for tariff negotiations when even Uruguay Round (UR) phase-out has not been yet completed for certain products;
We have very recently removed all the QRs and need time to adjust. Certain sectors like SSI need continued for their exclusion;
For unbound sensitive items, we want a clear commitment for their exclusion;
There should be a clear and uncompromising commitment to eliminate tariff peaks and tariff escalations.