Let146;s do the Cancun

Trade diplomacy is an art, not a science. Hence, it cannot remain a purview of economists alone. The political leadership must lead the way....

Trade diplomacy is an art, not a science. Hence, it cannot remain a purview of economists alone. The political leadership must lead the way. More so in a democracy. When members of the World Trade Organisation WTO initiated the Doha Round of negotiations in 2002, India correctly raised important questions about the pace of trade liberalisation in the developed countries and the non-implementation of the Uruguay Round agreement. India8217;s tough talking here helped focus attention on development issues and forced developed nations to pay greater attention to the question of 8220;special and differential treatment8221; to developing, especially least developed, nations. Doha also showed that WTO could not work inside a cocoon of secrecy and greater transparency was called for.

Many of the issues raised by India and the developing world have been internalised in the thinking within the WTO. However, there is a momentum to trade liberalisation that the developed nations have maintained and it is time India took a pragmatic view of what benefits us and what does not. It is wrong to imagine that trade liberalisation is something India opposes and the developed countries propose. As in the case of trade in services and agriculture, India is today seeking greater liberalisation and reduction of trade-distorting subsidies that the EU wants in place. Similarly, on non-tariff barriers like linking trade to non-trade policies, it is India that is ahead of the US. However, there are still areas where India must move forward. It must further reduce tariffs and promote a more trade-friendly policy regime at home. Thus, agreeing to trade liberalisation in services, including accountancy, legal and financial services and to improved trade facilitation, greater transparency in government procurement, and so on, should not worry India. We can also benefit from these measures. However, if multilateral commitments have to be made then there have to be some return gifts on offer. Improved market access in various modes of services will help India. A dilution of the US position on pharmaceutical patents in the interests of public health will also be welcomed. Trade negotiations involve such give and take and political leaders here should be prepared for it. India can afford to ease up on some issues like trade facilitation and competition policy. But accepting an investment agreement is not yet in India8217;s interest.

Finally, there is no reason to be cowed down by the spectre of regional free trade agreements and there is no reason to presume that a proliferation of such agreements will hurt multilateralism. Our political class continues to be misled into thinking the WTO is an unhelpful institution. Far from it, India more than most developing economies needs such a multilateral institution to best protect its national interests.