12-26-05,9:17am

The Polit Bureau of the Communist Party of India (Marxist) issued the following statement on December 19, 2005

THE declaration adopted at the WTO ministerial conference in Hong Kong makes it clear that the global trading system continues to be weighted in favour of the developed countries. The Doha round of negotiations initiated in 2001 has been used by the rich countries to protect their interests to the detriment of the vast mass of humanity belonging to the developing countries.

The claims made regarding the agreement on agriculture, the Non Agricultural Market Access (NAMA) which pertains to industrial tariffs, the services sector and on intellectual property rights (TRIPS) do not stand the test of scrutiny. The role of the government of India in these negotiations have not produced an outcome which adequately protect the interests of the farmers and the country.

In the vital area of agriculture, which affects millions of Indian farmers, the agreement hardly provides any protection, or, gains. The commitment by the advanced countries to ease out export subsidies by the year 2013 is no achievement considering the fact that export subsidies constitute a very small part of the total subsidies that agriculture receives in the European Union where their share is not more than 3.5 per cent. India will not be gaining much as its exports are limited. In the coming days, more pressures and trade distorting tactics can be expected which will adversely affect farmers and Indian agriculture. Our primary interest should have been to ensure the protection of small and marginal farmers. The special products and special safeguard mechanism proposed will not be sufficient in the light of the fact that we have already agreed to further cuts in agricultural tariffs. The government of India has to explain how the agreement in Hong Kong will help protect our farmers and agriculture.

The agreement on industrial tariffs under NAMA will entail substantial cuts in industrial tariffs for India and the developing countries. In the light of the insignificant reductions in domestic farm subsidies by the advanced countries, the tariff reduction commitments agreed to by India is unjustifiable.

The most retrograde part of the declaration is regarding services. As per the new regime, FDI in various services sectors will have to be negotiated as the text commits India to consider 'commitments on enhanced levels of foreign equity participation'. Progressive liberalisation under GATS will ensure that regulation of foreign service providers will be restricted. The issue of government procurement will also be discussed. Already the government has offered opening up of various services, including health, education, financial services and telecommunication. In the coming negotiations, the objective will be to get all limitations removed with regard to FDI caps etc and bring these commitments as part of international treaty obligations.

India has helped the US and the EU in facilitating this agreement on services. The terms of negotiations agreed to cannot be justified by the gains made in areas like grant of more H1B visas and business process outsourcing (BPO) which are of interest to a small section of the people.

The TRIPS agreement has so far worked in favour of the developed countries and India failed to bring up issues necessary for review and amendments. The amendment enabling export of life saving drugs under compulsory licence to countries without manufacturing capacity is cumbersome and will not have much practical value. The prices of patented drugs will continue to rise affecting the common people.

Overall, the Hong Kong declaration further reinforces the unequal trade regime and international economic order. The government of India has failed to stand up firmly for a more equitable agreement both for India and the developing countries.