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KAMAL NATH LAUNCHES RIS’ WORLD TRADE AND DEVELOPMENT REPORT 2007
Date : 23 Feb 2007
Location : New Delhi
The current
impasse in the global trade talks under the aegis of the World Trade
Organisation (WTO) offers an opportunity to reflect and resolve the broader
issues about the processes of agenda-setting and decision making in multilateral
trade talks so as to make them inclusive and democratic. This is the main
recommendation of the World Trade and Development Report 2007, prepared by the
Research & Information System for Developing Countries (RIS), a New Delhi-based
think-tank, which was released by the Union Commerce & Industry Minister Shri
Kamal Nath here this evening. The Report was prepared by a team led by Dr Nagesh
Kumar, Director-General of RIS
In its 130-page comprehensive
analysis of the state of play in WTO and workable suggestions for reactivating
the stalled dialogue to bring development focus onto the centre-stage of the
agenda, RIS pitches for south-south cooperation (SSC) in trade. It said in the
Doha Round, developing countries have reinforced their participation through
issue-based coalitions such as the G-20 and G-33 as well as the G-90. "The
success of these coalitions was evident in their ability to get three
(investment, competition policy and government procurement) of the four
Singapore issues dropped off the negotiating agenda", it said adding that more
pro-active SSC would be crucial in making the world trading system more
responsive to the needs of the developing world.
It said that while a
rule-based multilateral trading system is important for the developing world,
the existing structure and process of rule-making suffers from asymmetries that
need to be addressed. Hence a more democratic system of decision-making based on
secret voting and decision based on the majority would serve the organisation
better and make it more participatory. All negotiating texts and drafts should
be introduced in open-ended meetings and no decisions should be imposed on
members without wide consultations and discussions, it said.
The RIS report also proposes
strengthening the Special and Differential Treatment (SDT) for developing
countries so as to make it "precise, operational and effective" and thereby
retrieve the development policy space to them that has been "squeezed by
different WTO agreements and proposals". SDT is required to neutralise the
adverse fallout on development of distortions in global markets caused by
protectionist policies of rich. SDT, it said, would need to be part of "a
broader approach that recognises the fundamental interest of developing
countries in the trading system to seek fair trade, capacity-building, balanced
rules and good governance in WTO".
The Report finds that
‘countries that followed a gradual and sequenced approach to trade
liberalization such as China, Vietnam and India have had a much greater success
in expediting growth and reducing poverty’ compared to those that pursued
indiscriminate liberalization as in Latin America and Sub-Saharan Africa under
the structural adjustment programmes administered by the Brettonwoods
institutions. It finds a compelling case for continued relevance for infant
industry protection. Explaining this Dr Nagesh Kumar, Director-General, RIS who
led the Report team, said that all the developed countries of today have
extensively employed protection in the process of their industrialization and
development, adding that the US, for instance, was the most protected and also
the fastest growing economy until the World War –II. Developed countries have
also used soft patent laws and various industrial subsidies extensively in their
process of development. In the more recent times, such policies have been
employed with great success in building internationally competitive industrial
capabilities in South Korea in auto, electronics and steel, Taiwan in
electronics, Brazil, China, Thailand, Malaysia and India. However, the space to
pursue such policies is being squeezed by the multilateral trade negotiations
affecting the development prospects of developing countries.
In the Doha Round, developing
countries should strive to retrieve and preserve this policy space. In this
context, the report urges the developing countries coalitions to seek a
negotiation of a Framework Agreement to provide a legally binding status to SDT
provisions, which among others, confer policy flexibility to developing
countries based on an objective criteria such as a threshold of per capita
manufacturing value added (MVA) for flexibility from commitments under
non-agricultural market access (NAMA), trade-related intellectual property
rights, trade-related investments or SCM agreements. The report also called for
international funding of R&D activity in developing countries in order to
compensate them for the adverse effects of the strengthened intellectual
property right regime. It also underscores the need for promotion of south-south
trade and investments through a slew of measures covering trade facilitation and
non-tariff barriers, extending the scope to cover trade in service, a South
Investment Agreement and financing and guarantees for South-South investments.
The report also recommends
strategies for the developing world on the negotiations of agreements on
agriculture, NAMA, trade in services and development, trade facilitation and
reform of dispute settlement undertaking of the WTO to help developing world
fight unfair trade practices effectively."
The Report
was also commented upon by Panelists including Ms Farida Mahommed, a member of
South Africa’s Parliament, Dr Kamal Malhotra, Senior Advisor of the UNDP, New
York, and Mr. T.K. Bhaumik, Chief Economist of Reliance Industries, who spoke
after Shri Kamal Nath.
SB/NR/MRS
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