More on India and the Doha Round

Friday’s Wall Street Journal also made India’s commerce minister the scapegoat for the failure of the talks (page A6 of the print edition). It quoted US and EU negotiators in putting the blame on Kamal Nath. Small concessions by the EU and the US are highlighted in the article, but the subtext of the article very much seems to me one that condones the domestic political economy compulsions of the industrial countries, but delegitimates similar interest group or broader political pressures in developing nations. This is a persistent asymmetry in much reporting in the West.

Having said that, I don’t agree with much of Kamal Nath’s position. In particular, I didn’t like his invoking of the infant industry argument to justify protection of the automobile industry, and his mixing that up with issues of agricultural subsidies. Farm policy is one of the politically messiest and most emotional issues, whether domestically or internationally. There is a huge overhaul required around the world, but issues of income security and environmental protection also come into play. All of that should be kept separate from industrial development policy. There also seems to me to be an inconsistency in Kamal Nath’s statement that “the future of automobiles is not in Detroit or Stuttgart, it’s in Asia,” and his defense of tariff barriers for India’s car industry. I’m also unenthusiastic about general moralizing about the West’s responsibility to tackle global poverty, when so much of the solution lies within developing countries themselves. If India implements some further domestic economic reforms, that could have a significant impact on its growth. For example, there are many barriers to internal trade in agricultural products, and India’s government should be tackling these. Interestingly, the WSJ report says that “China chooses to keep a low profile in trade talks.”

Returning to my initial point about asymmetric attitudes, the WSJ blandly notes that “The EU and US business community says that in a slowing global economy, it needs access to India’s growing market of a billion consumers.” Of course it does. But those interests have to be put on some kind of equal footing with those of India’s farmers. This often does not happen in the Western media.

Finally, the WSJ is explicit that EU and US diplomats want concessions because they face increased concerns at home about free trade. On this, see also my July 15 post, “Brave New World.”

2 Responses to "More on India and the Doha Round"

  1. sriram srirangam   August 2, 2008 at 8:23 am

    Nirvikar singh foregets the fact that general elections are round the corner in India

  2. Nirvikar Singh
    Nirvikar Singh   August 2, 2008 at 5:50 pm

    I am well aware of India’s general election next year.My point is precisely that this is a legitimate concern for Indian politicians, and the Western press has an asymmetric attitude toward such concerns versus similar issues facing Western politicians.My argument against protection for the car industry is a separate point, and I don’t think that issue is connected to the impending election.