ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Washington Pressure, Once More

The US is trying to push India into a deal on trade facilitation without making offers in other areas.

At a time when the political, economic and military relations between India and the United States (US) are growing closer, it is somewhat unusual for a senior official of the Obama administration to portray India as a spoilsport in the pursuit of “fresh new approaches” on trade facilitation, one of the issues on the agenda of the Doha Round of trade negotiations at the World Trade Organisation (WTO). Early last week, Michael Froman, Deputy National Security Adviser for International Economic Affairs in the Obama administration, said an agreement on trade facilitation would be a “win-win” in the Doha Round, especially for least developed countries (LDCs) which incur huge costs because of barriers at the border. (Trade facilitation covers border rules like customs procedures for export and import and has been on the US agenda for close to 15 years.) But India, Froman is reported to have said earlier this month, “is standing in the way because they want to be ‘paid’ by developed countries for agreeing to something that is beneficial to the global trading system, especially poorer countries”.

The senior US official is the point man for economic dialogue between New Delhi and Washington. Senior officials in the Indian government, particularly Planning Commission Deputy Chairman Montek Singh Ahluwalia, who represents India at the G-20 meetings, and National Security Adviser Shiv Shankar Menon, regularly interact with Froman on economic and trade issues. The Indian national security adviser recently held meetings in Washington with Froman on Indo-US economic cooperation. Obviously, India’s stand on trade facilitation and other Doha issues would have figured prominently during the discussions between these three senior officials. It is, therefore, intriguing why Froman chose to single out India and denounce its stand on trade facilitation at a public forum. Surely, Washington would have already conveyed to New Delhi its disapproval of India’s position on trade facilitation at the WTO in Geneva. Was this an attempt to ratchet up pressure on New Delhi to give up its negotiation positions on trade facilitation? Is India the only country that has raised serious concerns about pursuing an agreement on trade facilitation which at this point is only devoted to enhancing import facilitation through binding dispute settlement commitments at the WTO? What about the concerns raised by the small and vulnerable economies and the LDCs that trade facilitation will drown them in perennial balance of payments difficulties? If members conclude a WTO agreement on trade facilitation, what will happen to other major issues in the Doha Round, particularly cotton in the agriculture negotiations, and duty-free and quota-free market access in industrial goods for the poorest countries that was agreed in the WTO’s 2005 Hong Kong ministerial meeting? More importantly, what about the issues India and the G-33 farm coalition raised three months ago calling for developing countries to be exempt from making commitments on their public distribution programmes, an issue that was negotiated in 2008 and is ready to be harvested? After all, a resolution on public distribution stocking programmes is vital for India’s national food security legislation that is currently under consideration.

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