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On the defensive at Cancun?

Recently Arun Jaitley identified agriculture and investment as the two main issues for next month's World Trade Organization ministerial conference in Cancun, Mexico. (Jaitley is India's union minister of commerce and industry, and head of the Indian delegation to Cancun.) He isn't off target. The US, the world's largest agricultural exporter, will push for dismantling barriers in the agricultural markets. The EU, the world's largest foreign investor, is sure to gun for an agreement on investment. Will India withstand their power-packed insistence, or buckle under during negotiations?

 
Last Updated: Sunday 07 June 2015 | 21:11:47 PM

-- RECENTLY Arun Jaitley identified agriculture and investment as the two main issues for next month's World Trade Organization ministerial conference in Cancun, Mexico. (Jaitley is India's union minister of commerce and industry, and head of the Indian delegation to Cancun.) He isn't off target. The US, the world's largest agricultural exporter, will push for dismantling barriers in the agricultural markets. The EU, the world's largest foreign investor, is sure to gun for an agreement on investment. Will India withstand their power-packed insistence, or buckle under during negotiations?

From India's point of view, Cancun is also important so far as implementation issues -- including the review of the special and differential treatment clauses -- are concerned. These are issues aimed at addressing developing country concerns in implementing existing commitments, and strengthening the derogations for developing countries in various WTO agreements to make them more effective. Only a few months ago, India was sticking its neck out on these issues. Now, it doesn't even figure as a priority. Did Jaitley forget to mention it? Or, does this mean India now has a defensive agenda for Cancun -- the real issues can only be those the big guns want discussed?

In agriculture, India would like developed countries to eliminate domestic subsidies, which makes developing country products uncompetitive. But the principal culprits -- the EU and the US have already ganged up. The recent EU-US joint paper on agriculture also doesn't adequately address development issues. The recent alignment with China and the developing members of the Cairns group (a group of 17 agricultural exporters) should enable India to put pressure on the EU-US combine. But, further alignment with either the EU or the US would be necessary for tangible results. Would this involve a compromise? Of what kind?

India has also been opposing the launch of negotiations on a possible multilateral framework for investment. India has done well to build support amongst developing countries to ward off pressure from the EU. But, specific differences apart, countries such as the US and Japan fundamentally support such an agreement. India must proactively acknowledge the need for a multilateral framework on investment, otherwise it might be sidelined at Cancun. Only then can it convince the world that such an agreement cannot fall under the WTO rubric. Will Jaitley and his team manage to pull this off?

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