Tuesday, October 2, 2001, Chandigarh, India



Fresh study of WTO agenda: a rejoinder

This has a reference to the two letters (September 17, 25) by Dr P.K. Vasudeva. He has misread my article "Fresh study of the WTO agenda" (July 31) and misrepresented the various provisions of the GATT agreements 1994 and WTO rules. At the same time he has made sweeping statements and levelled wild charges of “factual errors” and of “not giving a true picture”. In fact all these charges can be made against him with greater vigour and factual evidence. There seems to be a bias in his mind to defend WTO and some of its unjust provisions which treat vastly unequal countries as nearly equal.

One, the factual error mentioned by Dr Vasudeva is that I have expanded TRIPS as Trade Related Intellectual Property Rights, while he thinks that it is Trade Related Aspects of Intellectual Property Rights. In fact he is confusing the title of the Agreement on Trade Related Aspects of Intellectual Property Rights with this abbreviation. Even if TRIPS is expanded as Trade Related Aspects of Intellectual Property Rights, it would not make a difference to the analysis.

Two, Dr Vasudeva thinks that my contention that “the grievance redressal mechanism and authority to enforce its decisions and punish defaulters through cross retaliation” is erroneous. But he simply states the way dispute settlement body (DSB) is appointed and it constitutes three to five members. But ignores the point made that cases in the DSB are won or lost on the strength of information and proper follow up of the cases in which developing countries are found wanting. Once a case is lost, WTO ensures implementation of the decisions not by consensus but on merit of the case as decided by dispute settlement mechanism through DSB. A member cannot afford to ignore the decisions for fear of WTO wrath as it is empowered to use cross relation.


Three, Dr Vasudeva claims that “in agriculture we have freedom to follow our policies only industrialised countries are required to reduce subsidies and subsidised exports”. This is factually wrong statement. The Agreement on Agriculture (AOA) states that the permissible limit of reductionable subsidies for developing countries is 10 per cent of the value of produce and for developed countries 5 per cent of the value of produce. As and when subsidies exceed the prescribed limit they have to be reduced. The developing countries are not exempted from this.

Besides, Dr Vasudeva makes sweeping statements like “WTO does not assault our economic sovereignty” and contests the point that the domestic prices of agricultural commodities have some relationship with the global prices under WTO regime. If the AOA is read properly along with other agreements it makes very clear that the difference between (high) domestic prices compared to (lower) border prices for exportable items is treated as subsidy. For example, the Indian procurement agencies purchased wheat at the MSP of Rs 610 per quintal and some of them are trying to sell wheat in the global market at a price of Rs 430 per quintal, the difference of Rs 180 per quintal would be treated as export subsidy. This is more than 24 per cent of the value of wheat per quintal. This comes in the category of reductionable subsidy. It is in this sense, WTO rules bind the member countries not to artificially retain a domestic price much different from the global price and thus impose limitations on domestic stabilisation of prices. WTO has no agenda for global stabilisation of prices of agricultural products. Since the rules and agreements are to be implemented by WTO even when they conflict with domestic policies and programmes of the members, they limit their economic sovereignty. Countries, in order to escape the unfavourable treatment/wrath, abide by WTO rules and India is no exception.

In an effort to contradict my statement that “the formation of WTO has led to burial of international agenda of the developing countries for restructuring of global economy... signified by the demand for the creation of New International Economic Order (NIEO)”, he makes a sweeping observation. Dr Vasudeva says “though benefits of the GATT are rarely disputed, the lest developed countries (LDCs) do not necessarily embrace GATT because those countries believe that the benefits are not evenly distributed.” This statement is factually wrong and unsustainable in theory. Factually this began to be contested by the developing countries particularly after the Cairo ministerial meeting of 1962. The dissatisfaction with the working of GATT led to holding of UNCTAD generally after four years from 1964 onwards. This dissatisfaction of the developing countries led by G-77 ultimately led to the passing of a resolution at the UN General Assembly for the establishment of NIEO.

To put the record straight, it must be emphasised that NIEO even today represents the aspirations and requirements of the developing countries. Its agenda remains unimplemented. This does not mean that it is irrelevant. On the contrary one needs to understand the circumstances which do not allow its implementation. This can be located in the unfavourable balance of global forces from the perspective of the developing countries. What today appears to Dr Vasudeva that “the era of non-reciprocity in international trade is over” would become order of the day once the global community realises the famous and much relevant statement of the Pearson Commission that “the poverty anywhere is a threat to prosperity everywhere” on this globe. Dr Vasudeva is unable to see global developments in the historical context. This is the reason that he is citing without any purpose several meets of UNCTAD after 1974 perhaps to prove my ignorance of these regular meets. A careful reading of the various UNCTAD meets, even in the post-NIEO resolution phase, continue to air aspirations of the developing countries enshrined in this resolution. This is ignored by Dr Vasudeva. The mismanagement in handling surplus stocks of foodgrains or delay in passing legislation in India to synchronise with the TRIPS agreement is well known to informed readers. I do not hold any brief for either the Government of India or procurement agencies, yet as a concerned citizen one expects from those who run the affairs of the state to play a positive role and lead the other developing countries to protect interests of the Indian people and people of the developing world.

The tone and spirit of the letters by Dr Vasudeva betray arrogance and intend to score a point rather than demystify the reality. I am pained to say that either he does not understand the working of the WTO as an international organisation or is deliberately distorting facts and misrepresenting reality with a view to creating confusion in the minds of readers.

Sucha Singh Gill, Patiala

(Correspondence on this subject is closed).

Taking care of elders

The bill being taken up by the Union Government regarding the aged parents and grandparents to be looked after by their children, is okay in theory, but would not be of much use in practice. How many old people are left with physical and financial resources to take to legal recourse to get it implemented? Few and even if one takes to the legal recourse, one is unlikely to get justice during one’s lifetime as we know the pace of our system. The only ray of hope against this background is the conscience of a few good and grateful children.

The only thing the Government can do is, if it is really serious, to follow the pattern of some developed countries and introduce a good social security system, the best being the Sweden pattern where income-tax collected from citizens is 52 per cent, free education for children, good healthcare for all, subsidised housing, financial security for the aged, and unemployment are given allowance. Higher incidence of income-tax does not pinch as all the basic needs of present and future are taken care of by the government.

In India, we should check wasteful expenditure in the form of Parliament, state legislatures, perks like free conveyance and travel, free mansions, free petrol and free medical facilities to representatives and others in the country and abroad . Allowances should be fixed .

We need small advisory committees of people. They should be of known integrity and experts in various fields. They should assist an elected President of proven ability and integrity. This way, the overnment would be efficient and cost-effective,leading the country to self-sufficiency.




Streamline PDS

The country has a huge buffer stock of foodgrains to the tune of 61 million tonnes as against the ideal figure of 24.3 million tonnes. Yet, crores of people suffer from malnutrition and thousands die of starvation due to sporadic famine conditions time and again.

Identification of Below Poverty Line (BPL) families by the States, complete breakdown of PDS, delay in release of stocks by the Centre, apathy of the States, and obfuscated agrarianism are the main causes of such disasters.

To stem recurrence of these incidents, the Central Government should export or distribute the surplus stocks to the poor before these are rendered unfit for human consumption, by vagaries of weather and the onslaught of pests and rodents. The affected States should be actively involved in procurement from the surplus States during the harvest season. The stocks so procured should be stored by such States at their convenient locations so that precious time is not lost for distribution during emergency.

Col KULDIP SINGH GREWAL (retd), Patiala

Extend bus service

One of the primary professional training institutions “IHM” is situated just one km before the scenic Kufri tourist spot. The institution that trains people for the hospitality industry of the State yearns for a bus from Shimla to Kufri. The HRTC authorities have been considerate enough to start a bus from the college to Shimla in the evenings. This has partially solved the problem of the students and the staff.

If the bus service is started from Shimla to the college (Kufri) in the mornings also, it would help the 200- odd people plying on that route. Moreover, it will help those of undertaking distant journeys on long route.


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