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Assocham calls for caution at WTO Doha meet

The Associated Chambers of Commerce and Industry of India has cautioned against falling prey to the machinations of the developed countries at the Doha meeting of the WTO as the draft ministerial declaration is weighed heavily against the developing countries on five major counts.

The chamber has urged the Indian negotiating team to take a tough stand at the meeting as the draft declaration has refused to recognise the existence of imbalances in the agreements and does not offer serious commitments to resolve the implementation problems such as TRIPS (Trade-Related Intellectual Property Rights), TRIMS (Trade-Related Investment Measures) and agriculture.

It also failed to provide commitments by industrial countries for increasing access to products of export interests to developing countries, promote new issues such as investment, competition, transparency in government procurement and trade facilitation.

It has called upon the Indian team to ensure that the implementation issues were brought on to the mainstream in the work programme and that they were not limited to the ones already listed.

As regards negotiations in the area of investment, Assocham felt that an agreement was bound to put constraints on the developing countries' policies and measures for guiding foreign investment to serve their development needs and priorities.

According to Article III of the WTO agreement (Marrakesh Agreement), the WTO can only undertake negotiations concerning multilateral trade relations.

Investment is not within 'multilateral trade relations' and, as such, a negotiation in this area could be started in the WTO only after Article III is amended.

In such a situation, if negotiations were started in this area in the WTO, it would be presumed that investment fell within multilateral trade relations, which in turn would open the flood-gates for many other negotiations in the WTO in future.

If investment enters at this stage, subjects like domestic taxation and even social policies would not remain far behind.

Assocham, therefore, felt that the best course would be to remove investment altogether from the WTO work, so that this subject did not come up repeatedly. As regards WTO rules and dispute settlement understanding, the developing countries have already had bad experiences in the areas of subsidies and anti-dumping duties. There may be a fear that the developing countries would be called upon to undertake new obligations in these areas in the negotiations.

The chamber further pointed out that before starting any negotiation on industrial tariff, there should be a study process to determine the effects of reduction of tariffs on the domestic industries of the developing countries. There have been experiences of de-industrialisation as a result of tariff reduction in several developing countries.

Such a study process would make it possible for the developing countries to formulate their positions regarding tariff negotiations, the chamber added.

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