A Monthly Column by T. K. Bhaumik, Senior Advisor, Policy, Confederation of Indian Industry (CII)

The Challenges of 2005
 

WTO faces two major challenges in the year 2005. First, a new Director General has to be found. I must say that a good beginning has been made and the process of finding a new DG has begun well. Four candidates, including a very well known trade diplomat Mr. Pascal Lamy, the former EU Trade Commissioner, have been shortlisted. The others are Mr. Carlos Perez del Castillo of Uruguay, Ms Jaya Krishna Cuttaree of Mauritius and Mr. Luiz Felipe de Seixas Correa of Brazil. Let us hope that the most deserving candidate is unanimously elected, and that the 1999 story is not repeated. The member countries should go for the best and the deserving, and not be unnecessarily divided over the North vs. South debate, as had happened earlier.

The second challenge is to make the forthcoming Hong Kong Ministerial, to be held in December 2005, a success. It should not meet the same fate that the Cancun Ministerial did. The new DG will have a very important role to play, but it requires good coordination and concerted efforts on the part of every member to make the Hong Kong Ministerial a success. Perhaps it would be too ambitious to aim for conclusion of the Doha negotiations by December 2005. Not that it is impossible, but that should not be the primary objective of the forthcoming Ministerial.

The key issue is: what can the Ministerial hope to deliver. This is not an easy question to answer. In my view, it will indeed be a great achievement if the General Council is able to present, a good progress report on each of the negotiating agenda items, but particularly on agriculture, non-agricultural market access (NAMA) services and trade and development. The rest are also important but are less cumbersome. My concern is that people are still talking in terms of a rider which says: 'if everything goes well in agriculture... Why things should not go well in agricultural negotiations? If there is one single important obstacle in agriculture negotiations, it is the rigidity of positions, and I believe member countries are prone to going back to their earlier positions every now and then. This has to stop. Ideological indulgence in my view, rather than the real desire to open up trade in agricultural commodities, has blurred the negotiating objectives. The view that if the deadlock in agriculture negotiations is broken, all other negotiations will have go smoothly, is again not the right way to go about things. Progress in negotiation in other issues should not be subjected to such a casual mindset  Agriculture negotiations are important but so are the others. For many countries, for instance, NAMA negotiations are as important as agriculture negotiations. Similarly, services negotiations have also acquired considerable significance this time, and due process must be allowed for a meaningful outcome on negotiation on services. If we say agriculture is all important for the Doha round, that would be a mistake.

2005 is a very critical year for WTO and the multilateral process. Members are expected to be more constructive and contribute significantly to the success of WTO, which depends not just on the success of the Doha round, but also on how they are going to address a number of wide-ranging issues confronting the organisation.

There is also the issue of how WTO will address the issue of re-adjustment  in the wake of dismantling of MFA. Already, several members have expressed their concerns about the possible fallout. The concerns are genuine but there are no easy solutions. The problem with a competitive force market is that often genuine concerns cannot be addressed adequately. In the context of textiles and clothing, WTO must be prepared to ensure that MFA phase-out will not result in distortions in the global market.

[www.icfdc.com, 16 January 2005]