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India and the WTO
An alliance of diverse sectarian interests is claiming that India’s acceptance of the results of the Uruguay Round of trade negotiations is threatening the sovereignty of the nation and the supremacy of its parliament. The fallacy of this wild propaganda needs to be exposed and the people educated on the benefits of a liberal and competitive trade regime.
Reading the press and listening to the statements of various groups and political parties, there seems to be a tremendous dissatisfaction with India’s role in the WTO. It has been repeatedly claimed that the national interests were not protected in the Uruguay Round negotiations. The implementation of the results of this Round would retard industrial growth, decimate small-scale industries, ruin the lives of artisans and choke the development of the agriculture sector. It has also been urged that foreign imports and enterprises would come to dominate every aspect of economic life while domestic sectors would be left to face slow and lingering death. WTO has been depicted as a supra-national institution that is eroding the sovereignty of the country and the primacy of its parliament. It has been suggested that India’s accession to the WTO must be renegotiated and if satisfaction is not obtained, India should withdraw from the WTO. Before examining the veracity of these statements, it is necessary to understand the role and purpose of the WTO.
Although the WTO was conceived in the Uruguay Round, it had been in existence in the form of the GATT ever since the close of the second world war. The Great Crash of 1929 had disrupted the economy of all countries and even the economically powerful ones were badly affected. In futile attempts to protect themselves, several countries had resorted to competitive devaluation of their currencies, exchanged preferential tariffs with favoured trading partners, jacked-up their import duties to abnormal heights and imposed various types of trade restrictions to balance their payments. This chaotic situation had undermined the global trading system throughout the 1930s until the second world war intervened. It was feared that full production required by the war could not be sustained after the cessation of hostilities. Demobilisation of the armed forces might lead to large-scale unemployment and surplus labour. The desperate economic condition of both victors and vanquished was likely to create problems for international trade.
Dear Reader,
