India duly sells South short

Developing countries herded into no-win deal

Published: Sunday 15 January 2006

-- the latest round of the World Trade Organization's ministerialist talks in Hong Kong have gone the eminently predictable way with the developed world walking all over the developing countries. That they got more than just a modicum of help from what we can only describe as Trojan horses in the Southern camp -- in this case India and Brazil -- will not come as too much as a surprise for many, especially since India's commerce and industries minister Kamal Nath, the star of the media show and the 'chief negotiator' and spokesman for the developed countries, has a long record of trickery and a mastery of the dodgiest of deals. By herding the newly formed group of 110 developing nations, formed for all practical purposes with a specific agenda, into a deal on agricultural subsidies in which the developed nations gave almost nothing away, India and Brazil effectively torpedoed the hopes of the least developed countries (ldcs) and others heavily dependent on agricultural exports.

The deal struck on the huge agricultural subsidies doled out, especially by the European Union and the us, completely ignored the interests of the developing nations by focussing exclusively on export subsidies and completely ignoring domestic subsidies. Since export subsidies constitute a tiny fraction of total dole-outs to Western farmers, doing away with them will do little to in crease the competitiveness of the South as far as trade in agricultural commodities are concerned. The supposed sop of market access for ldcs was hedged in with conditions that left the door ajar for developed nations to exclude key commodities, making the gains on this deal for countries heavily reliant on a small number of products largely illusory. The issue of reduction of import tariffs on industrial goods also went the Northern way, with the ratification of an across-the-board formula that will hit developing nations that already have a low tariff baseline.

So nothing really changed in Hong Kong. The developing nations showed themselves to be riven by differences -- and key players showed themselves to be actuated to an unconscionable degree by the willingness to sell the larger interests of the bloc short for individual gains. And it is precisely the microscopic proportions of these gains that put the actions of people like Nath in the right perspective.

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