DEBATE : Should India quit the WTO?
Written by Business Standard   
Wednesday, 17 September 2003




Should India quit the WTO?
Isolation would negate India’s progress but the country also needs to protect its interests against he developed world

                      Published : September 17, 2003                                        

Harinder S Sikka
Senior President,
Nicholas Piramal India Limited

India today stands tall and proud. Having registered self-sufficiency and an enviable all-round growth, it has sent a “you can’t take us lightly” message to the negaholics (those addicted to the negative) both within and abroad.

By prepaying its debts, giving aid to the poor nations and offering assistance to the International Monetary Fund, India has displayed a posture that could make its detractors sweat. It is no mean achievement that the world is beginning to admire India, not only for its deep-rooted values, traditions and history but also, and more importantly, for its resilience, grit and determination.

We may have won a battle overseas, but the war at home is far from over. There are pressure groups within who refuse to see the rising sun on the Indian horizon. They are unable to tune their ears to the sound of a new and vibrant India. They are well-meaning and influential and one hopes they will wear a mature hat while addressing issues that affect us all.

It is indeed true that intellectual property rights are dangerously tilted in favour of the developed world. But it is also a fact that the Indian entrepreneur has not only acquired newer skills, he has also successfully turned the tide in his favour.

The US’s knee-jerk reaction to the compulsory licence issue is an example of the desperation that is setting in the opposition camps. Multinationals are now working overtime to secure their home turf. They are witnessing India’s forward march, something that is beyond the understanding of our pressure groups.

International exposure, partnerships and collaborations have helped India take giant strides. For example, information technology was unheard of 25 years ago. Today, it accounts for over 25 per cent of our exports.

General Motors, Rover, Ford, Hyundai, Toyota and Renault have combined to motor India to the farther horizon, helping Indian skills to reap in a billion dollars through exports. We are the world’s largest manufacturer of motorcycles and export Rs 7,000 crore worth of compatible spares. Nine out of every 10 diamonds sold in the world pass through Indian hands. Could we have achieved all this by living in isolation?

Twenty years ago, 75 per cent of the drugs market share was with the multinationals. Today, it has fallen to below 30 per cent, with companies like Nicholas Piramal gobbling up nearly a dozen of them. India’s drug industry produces medicines that can be sold under strictest quality regulations across the globe.

While we have mastered the art of rocket science and are planning to put up an Indian on the moon, we have pressure groups fuelling a fire of fear that could burn the emerging picture to ashes.

In the eighties, India shooed away the multinationals. Having enjoyed the fruits of the Licence Raj, the industry feared competition. It demanded protection. China, on the other hand, welcomed multinationals with open arms.

Fortunately, we learnt from our mistakes and, therefore, are no longer holding the begging bowl. The past decade has moved five times faster than the previous 50 years. The new era is ushering in a future that would make obsolete any nation that cannot keep up with the pace. Partnership is the buzzword for success in a world that is shrinking rapidly.

Today even a rickshaw owner flaunts a cell phone. He too has ambitions. He too wants his future generation to see what he has been denied by a Bihar-like state. Isolation would only further reduce his horizon.

The World Trade Organisation is here to stay. By whining and wailing, we would at best demean our fellow Indian entrepreneurs. It is, therefore, time that we educate ourselves against the empty slogan-shouting rumourmongers. It is for us to appreciate that we have come so far due to our competence and intelligence. We have miles to go yet.

To be a superpower by 2020, we would need to convert our traditional knowledge into the acceptable modern lingo. And for that, we need to run on the same track that our competitors are used to.


<!--[if !vml]--><!--[endif]-->Murlidhar Rao
Convenor, Swadeshi
Jagran Manch

The stated objectives of the World Trade Organisation (WTO) promise the moon such as enhancing trade volumes, generating employment opportunities and protecting consumers’ interest. Those championing globalisation sum up the WTO as a “win-win situation” and “democratisation of trade”.

But a hard look at the reality presents a contrast from the dream world. In successive WTO meetings, it has been the developed nations that set the agenda and cleverly front-loaded their interests and back-loaded their weaknesses. They balk at the mention of implementation issues while consistently pressing for new issues.

Is it not significant that many of the issues agreed upon in the Uruguay Round have not been implemented? Should we not talk about these first? The WTO would be better described as a Western Trade Organisation, serving the interests of developed nations only.

For the Swadeshi Jagran Manch, the central point of the debate on the WTO revolves around self-reliance. The sacrosanct issue here is not globalisation but self-reliance. If the WTO propels globalisation-related trade and enhances capacity, the country’s self-reliance should be a natural outcome. But this is not the correct picture; globalisation considers any country’s self-reliance a rival.

Take the case of agriculture where the developed nations are protecting their interests with a vengeance. In these countries, farming is done by the industry whereas in India agriculture is a life-style and sustains 70 per cent of the population. While agriculture is highly subsidised in the West, the Indian government does not have the capacity to enhance the subsidy for farmers.

Yet there is hardly any discussion on reducing subsidies in Western countries and providing a level playing field. In the WTO agenda at Cancun, it is highly unlikely that the time-bound programme to phase out subsidies would be agreed upon. And those wishing the WTO to be a success must realise that any move to disregard this component of the Indian economy would create serious social problems.

That the West has been trying to perpetuate its dominance is evident in the manner in which the developed nations tried to trample on the sovereign rights of the weaker nations. Take the case of public health. Under the Trips agreement, the developed nations, who hold the maximum number of patents, have desperately tried to subvert the weaker nation’s cause.

Even in the Cancun meeting, there have been efforts to alter the compulsory licence clause which authorises a nation to go in for the production of life-saving drugs in the event of crisis. Now, the West is trying to subvert a nation’s right to protect its people by introducing a change in the clause and making it mandatory for a nation to seek the WTO’s permission before producing a life-saving drug.

In our view, there has been a determined attempt to crowd the ministerial meeting at Cancun with new issues. The Singapore issues, which deal with transparency in government procurement, trade facilitation, foreign direct investment (FDI) and competition, have been deliberately introduced for this reason.

The WTO has still not exhausted the Uruguay round agenda. The commitments made by the developed nations remain un-implemented. We see the developed nation’s insistence on discussing the Singapore issues as designed to scuttle the nation’s sovereignty. How can any self-respecting nation allow the FDI policies to be determined by others?

The clever manner in which developed nations try to give the go-by to developing nation’s interests is evident by imposing restrictions on the free movement of workers. Is it not an irony that these nations are too keen to ensure free movement of FDI but not human beings? The reason is simple: they do not want the job market to be flooded by cheap labour from the Third World.

There is little possibility that the developed nations will concede ground to the developing nations and offer a level playing field. We have only taken a reasonable position: “either mend it or leave it”. If the WTO accommodates the interests of all based on the stated principle of fair play and equity, we have no objections.

But we must not allow the argument of “isolation” to work as a threat in articulating India’s core interests at Cancun. Isolation or no-isolation, we are not a player to be worried by Cancun’s success. We must protect our core interests even if it means leaving the WTO.

                                                                                                      (As told to Ajay Singh)

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