India and the Doha Round

It was interesting to see very different perspectives on the cause of the Doha Round’s recent collapse. The Economist magazine is a defender of free trade, but came up with a very balanced analysis. Last week, it reported, in neutral language:

“Broadly speaking, Europe and India are under attack for wanting to spare too many farm products from deeper tariff cuts; some developing countries are being asked to reduce industrial tariffs further and faster; and America is under pressure to do more to cap trade-distorting subsidies to its farmers.

This last issue, in particular, could be a deal-breaker. India’s commerce minister, Kamal Nath, wants America to cap its farm spending at last year’s total minus one dollar. The draft agreement suggests limits much higher than this ($13 billion-16.4 billion). That would do little to constrain America’s potential spending, except perhaps on cotton and sugar.”

After the talks failed, it again provided an even-handed account:

“At the outset, the likeliest stumbling block seemed to be America’s unwillingness to reduce the ceiling on its agricultural subsidies to somewhere close to the amount it actually spends. (In the parallel universe of the WTO, members negotiate over maximum tariffs and subsidies, not the actual rates and sums.) In the end, it was a dispute over protection for developing countries’ farmers that proved the deal-breaker. The draft text envisaged a “special safeguard mechanism”—a right for developing countries to raise tariffs to protect their farmers against a surge of imports. America wanted the import volume that triggered the mechanism set relatively high; India and China wanted it low. Deadlock ensued; and that was that. Another contentious issue—cotton—was not formally dealt with, although Mr Lamy said that there had been “convergence” in the 18 other areas under discussion.”

In another supposedly august institution of British journalism, The Times, the tone of one of its columnists was very different:

“The bricks are crumbling in the house of global trade and the Brics, those fashionable emerging markets of Brazil, Russia, India, China, are crumbling, too, wracked by inflation, slackening growth and the flight of hot money.

In Geneva, Kamal Nath, the Indian Trade Minister, was gritting his teeth, doing his best to justify a wrecking operation that has earned him brickbats from all round. He has brought to an end a seven-year struggle for a global trade agreement that would open borders and reduce subsidies and he knows it.”

This report is full of apocalyptic language and attacks on India and China. It reminded me a bit of similar writing by Martin Wolf on the global financial system. What is it with these guys? It seems like they still haven’t got over the loss of the British empire.

One Response to "India and the Doha Round"

  1. Anonymous   July 24, 2009 at 4:35 pm