CUTS Centre for International Trade, Economics & Environment

“The North world has lost its grip. With growing economic and political power of India and China in the world, the monopoly of a few developed countries has ended.” This was stated by Valter Angell, senior researcher, Norwegian Institute of International Affairs while talking to Newsline on Tuesday. Valter was here to participate in a seminar on “Globalization and India: Voices from the Ground”, organized by two NGOs, NEED (Network of Entrepreneurship & Economic Development) and CUTS-International at Taj Residency.

“No real concessions were given to the developing countries till very recently. The World Trade Organization (WTO) didn’t address the grievances of farmers and labours. Each of their decision was biased and favourable to their countries”, said Valter. “But the scene has changed now. WTO’s 2006 report clearly highlights the role of developing countries in the world trade and much would depend on the next round at WTO.”

He said as the value addition and productivity in agriculture was very low, farmers were selling their land and switching to other businesses. Supporting liberalization, he said gains for consumers were larger than the losses for the producers.

Around 100 people from different NGOs, corporate sector and the media, participated in the two-day seminar that concluded here today. The speakers showed concern over anti-poor policies implemented by the world organizations. “Why are people not included in the debates on the issues that directly affect them”, said Anil Singh, Chief Executive NEED. “Farmers have been deprived of the possibility of trades. Our programmes at the grassroot level have proved to be useful and efficient for bringing about sustainable changes to support national causes”, he added.

Pro-poor projects like Grassroots Reachout & Networking in India on Trade and Economics (GRANITE) and linkages between Trade, Development and Poverty (TDP), implemented by CUTS International, were discussed widely in the seminar and a future roadmap was also drawn. “We need to identify the issues common to all states... our strategies should be more scientific and quantitative and a qualitative analysis is also required”, said Bipul Chaterjee, Director, CUTS.

“Trade policy affects poverty through its effects on economic growth and equitable income distribution. A pro-poor growth policy has greater impact in reducing poverty, than growth, per se”, he added.

This news item can also be viewed at: http://cities.expressindia.com/

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‘Poor must unite to have a say in globalisation’
Hindustan Times, Lucknow, December 19, 2006

AGRICULTURALISTS and representatives of NGOs from India and abroad gathered in the city on Monday to deliberate on pro-poor globalization issues. On how poor can have their say in policy making, Valter Angell, a senior researcher from the Norwegian Institute of International Affairs said that poor can influence policy making fairs said that poor can influence policy making when they are united because individual voice has no meaning. “Voices of poor become even stronger if it’s related to any political party,” he added.

These discussions are a part of the two-day national meet on ‘Globalisation and India Voices from the Ground,’ that began on Sunday. Network of Entrepreneurship and Economic Development (NEED) Lucknow in collaboration with CUTS (Consumer Unity & Trust Society), Centre for International Trade, Economics and Environment (CITEE), Jaipur have organised this meet.

Speaking on the occasion, secretary, women and child development, Balwinder Kumar said that the Indian Economy is growing continuously but until this growth percolates to the grassroots, its results will not be visible in the society. “For rapid economic growth, it is important that all government programmes are implemented in the true sense and benefit the target groups,” he stated.

Meanwhile director CUTS CITEE, Bipul Chatterjee said that a pro poor growth policy has a greater impact on reducing poverty than growth per se. He also informed that CUTS programme on ‘Grassroots Reachout and Networking in India on Trade and Economics’ (GRANITE) broadly works towards policy coherence between trade and national development policies to reduce poverty.

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Grassroot need of the hour: No angrezi, please, we’re Hindi!
Indian Express, Lucknow, December 19, 2006

By Tarannum Manjul

"Agar ei seminar hamar waste rahi, toh humka toh babuji kuch bhi boojhat nahin. Sabhi log angrezi mein gitar pitar kari, hum toh bas Hindi hi jaane hain,” said Asma, a chikan craftsperson from Mehmoodabad near Lucknow. Asma was one of the few participants of the national seminar on ‘Globalisation and India: Voices from the ground’, organised by an NGO, Need, but at the end of the day, Asma and many others like her felt that such seminars, which aim at changing their lives, should be in Hindi and not English.

The seminar aimed at sharing experiences in generating awareness on the trade development linkages in different parts of the country and exploring the details of the pro-poor activities. Since Need is actively involved in making self help groups of chikan craftspersons in and around Lucknow, a number of women were also participating in the seminar to share their experiences, at the grassroot level.

But since NEED had invited representatives from other organisations from within the country as well as abroad, including Norway and The Netherlands, the seminar’s proceedings were mainly in English, making it difficult for the craftswomen to understand. And although Asma and other women like her enjoyed the venue, hotel Taj Residency, they felt that for them, coming to the seminar was certainly a waste of time.

“I am sure that inside there, they are talking about us and about our welfare, but then, obviously since we cannot understand a single word, what will we make out?” said another craftsperson Pushpa Devi. Reshma Khatoon, another chikankari craftsperson from Mehmoodabad block, held the same opinion. “We want to know what all these foreigners are talking, because we are sure that they are talking about our welfare,” said Reshma Khatoon.

When contacted by Express Newsline, Anil Singh, the executive director of Network for Entrepreneurship and Economic Development (NEED), said that they had to conduct the seminar in English because a large number of people, especially those from other states and the team from Norway, could not understand Hindi. “But we will try to ensure that our workers are briefed about it,” he said.

Meanwhile, talking about the need of the hour to preserve and promote handicrafts, Rashmi Banga, an economist with the UNCTAD India Programme said that it is important to build up competition at the grassroots level, too, for making the market of grassroot products bigger.

Banga said that the Ministry of Commerce is trying hard to include the welfare of the poor in almost all the schemes and policies. She added that even organisations like FICCI and others are trying to promote innovative and contemporary designs for chikan industry.

This article can also be viewed at: http://cities.expressindia.com/

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Time to accelerate economic ties
Business Line, December 16, 2006

History provides ample evidence that no neighbouring countries have ever survived and progressed in the background of prolonged belligerent relations.

By Pradeep S Mehta & Huma Fakhar

A recent action by the Pakistani government to increase the positive list of tradeable products from 773 to 1075 under the South Asian Free Trade Agreement (SAFTA) could result in the doubling of formal trade from $1 billion to $2 billion. But this exchange can quadruple if only there is closer economic cooperation and that could set the pace for normalisation of relations.

Whenever one speaks about the peace-promoting economic relations between India and Pakistan, sceptics opine that the relations between the two are marred by the border dispute and cross-border terrorism. Hence, to expect more peaceful relations between the two fast growing economies through trade is a dream. We do not agree.

Until recently, it was not known that to promote peace in West Asia, the US hadadopted a similar scheme. In 1996, US Congress authorised designation of qualifying industrial zones (QIZs) between Israel and Jordan (1999) and Israel and Egypt (2004). The QIZs allow Jordan and Egypt to export to the US duty-free if the products contain a minimum level of inputs from Israel. The purpose of this trade initiative was to support the prosperity and stability in the region by encouraging economic cooperation. It has worked well.

India, Pakistan entering PTAs

Since both India and Pakistan are preparing to or are entering into various preferential trade agreements (PTAs, bilateral as well as regional) with other countries and regions (both with developed and developing countries) it would be sensible to include QIZ-type of arrangement in some of the agreements particularly with the EU, the US and China and even within SAFTA and the proposed ASEAN-India FTA. Such arrangements would help both Indian and Pakistani exporters/importers reap the benefits of free trade as well as promote greater cooperation.

Among other ways to promote economic cooperation is to look at cross-border infrastructure projects, which have opened prospects for economic benefits through cooperation. Regional cooperation projects have the potential to improve the well-being of all parties involved because of the scale of economies they permit, the complementarities between the economies, and the externalities they induce (multiplier effects, attraction of foreign investment, diminution of gaps, etc... ).

The East-West Economic Corridor (EWEC), a 1,500-km highway project crossing six Greater Mekong Sub-region countries in South-East Asia connecting South China Sea to the Indian Ocean, and the Middle-East Regional Cooperation Projects are some good examples.

Regional trading blocs may be an instrument for peace and prosperity. As Keynes observed, "A Free Trade Union, comprising the whole of Central, Eastern and South-Eastern Europe, Siberia, Turkey, and (I should hope) the United Kingdom, Egypt and India, might do as much for the peace and prosperity of the world as the League of Nations itself."

Tools for peace, prosperity

Keynes said that trade and commerce have been the most effective way of establishing peace between rival nations. The formation of the European Union most effectively united the Continent that for long was divided and warring. The EU has led to higher levels of economic well-being resulting from enhanced economic cooperation amongst the member states.

History provides ample evidence that no neighbouring countries have ever survived and progressed on prolonged belligerent relations. "History repeats itself" is the saying going around time and again. The famous economist, Mr Wilfred Pareto (1889) wrote, "customs unions and other systems of closer commercial relations (could serve) as means to the improvement of political relations and the maintenance of peace".

Conflict resolution

The Southern African Development Community originated in the 1980s as a coalition opposed to apartheid in South Africa and, more recently, turned to creating a free trade area. Some observers note that African Customs unions and free trade areas are as active in areas such as conflict resolution as in trade liberalisation. Finally, many see relaxed tensions between India and Pakistan as the real payoff of SAFTA (World Bank, Global Economic Prospects, 2005).

Many studies also point out that RTAs that expand trade flows appear to have a substantial dampening impact on conflict. Mansfield and Pevehouse (2000) attempt to identify empirically the role of RTAs in ameliorating conflict. They found that, on an average, the likelihood of the outbreak of a militarised inter-state dispute declines by around 50 per cent if both belong to the same RTA. However, only RTAs that expand trade flows appear to have a substantial impact on conflict.

In Africa, for example, RTAs that address the management of cross-border resource issues (such as water) are more effective in reducing military conflict than other RTAs.

Though both India and Pakistan are moving closer, it is at a snail's pace and constantly encountering hurdles. Some of the above measures could divert attention from sticky matters and accelerate economic cooperation between the two nations by reducing (if not eliminating) tensions and mistrust and bringing peace and tranquility to the region.

Pradeep S Mehta is General of CUTS international, a research, advocacy and networking group board in Jaipur, India and Human Fakhar is partner, Fakhar law international and Market Access Promotion, Lahore, Pakistan

This article can also be viewed at: http://www.thehindubusinessline.com/

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Developing a Closer Economic Cooperation between India
The World Trade Review, Islamabad, December 16-31, 2006 Issue

By Pradeep S Mehta & Huma Fakhar

A recent action by the Pakistan government to increase the positive list of tradable products from 773 to 1075 under the South Asian Free Trade Agreement (SAFTA) could result in the doubling of formal trade from US$1bn to US$2bn. But, this exchange can quadruple if only there is closer economic cooperation, and that could lead to better peace.

Whenever one speaks about the peace-promoting economic relations between India and Pakistan, skeptics opine that relations between the two are marred by the border dispute and terrorism across borders.

Hence, to expect more peaceful relations between the two fast growing economies through trade is a dream. We do not agree.

Once, one of us had written to the US government to promote mutual trade between the two countries by offering duty free imports if one used the others' inputs in their exportables to the US. The idea was received positively.

Until recently, we did not know that to promote peace in the Middle East, the US had adopted a similar scheme In 1996, the US Congress authorized designation of qualifying industrial zones (QIZs) between Israel and Jordan (1999) and Israel and Egypt (2004).

The QIZs allow Jordan and Egypt to export products to the United States duty-free if the products contain a minimum level of inputs from Israel.

The purpose of this trade initiative has been to support the prosperity and stability in the region by encouraging economic cooperation. It has worked well.

Since both India and Pakistan are currently preparing to or entering into various preferential trade agreements (PTAs, bilateral as well as regional) with other countries and regions (both with developed and developing countries) it would be sensible to include QIZs type of arrangement in some of the agreements particularly with EU, US and China and even within SAFTA and the proposed ASEAN-India FTA.

Such arrangement would help both Indian and Pakistanis exporters/importers to reap benefits of free trade as well as promote greater cooperation.

Among other ways to promote economic cooperation is to look at cross-border infrastructure projects across the globe, which have been able to release limitations on free economic relations and therefore open prospects for economic benefits from cooperation.

Regional cooperation projects have a potential for the improvement of the well being of all parties involved because Of the scale economies they permit, the complementarities between the economies, and the externalities they induce (multiplier effects, attraction of foreign investment, diminution of gaps, etc…).

The East-West Economic Corridor (EWEC), a 1500 Km. long highway project crossing six Greater Mekong Sub-region countries in South-East Asia connecting South China Sea to Indian Ocean and the Middle-East regional cooperation projects are some good examples.

In the same vein, mega-economic projects like the Turkmenistan-Afghanistan-Pakistan and the Iran-Pakistan-India gas pipeline projects would help in promoting trust and regional economic cooperation between India and Pakistan.

Regional trading blocs may be an instrument for peace and prosperity.

As the famous economist J.M. Keynes (1919) observed, “A Free Trade Union, comprising the whole of Central, Eastern and South-Eastern Europe, Siberia, Turkey, and (I should hope) the United Kingdom, Egypt and India, might do as much for the peace and prosperity of the world as the League of Nations itself”.

Keynes reminds us that trade and commerce have been the most effective way of establishing peace between rival nations.

History offers great many examples to support this viewpoint. The Second World War witnessed the worst enmity between the Allied forces led by the UK and the US, on the one hand, and the Axis powers, led by Germany, on the other.

The people of Poland, Holland and Russia still shudder with the bitter memories of the Nazi atrocities while relations between France and England could improve after several decades of the War.

The formation of the European Union has given rise to higher levels of economic well being resulting from enhanced economic cooperation amongst the member states. Additionally, it has been instrumental in shrinking of war-generated ill-will in the minds and heart of most people, especially the generation which came of age by the 1970s.

It is hard to believe that Thailand was on the opposite side in the Vietnam war. Vietnam invaded Cambodia in 1975, Vietnam and China fought in 1979 and Thailand had a border skirmish with Laos as recently as 1988. Regional co-operation has come a long way since.

History provides ample evidence that no neighboring countries have ever survived and progressed on prolonged belligerent relations. “History repeats itself” is the saying going around for time and again.

The famous economist Wilfred Pareto (1889) wrote, “customs unions and other systems of closer commercial relations (could serve) as means to the improvement of political relations and the maintenance of peace”.

The Southern African Development Community originated in the 1980's as a coalition opposed to apartheid in South Africa and has more recently turned to creating a free trade area.

Some observers note that African customs unions and free trade areas are as active in areas such as conflict resolution as in trade liberalisation.

Finally, many see relaxed tensions between India and Pakistan as the real payoff from the SAFTA agreement, regardless of what happens to trade barriers in the region (World Bank, Global Economic Prospects, 2005).

Many current studies also point out that RTAs that expand trade flows appear to have a substantial dampening impact on conflict. Mansfield and Pevehouse (2000) attempt to identify empirically the role of RTAs in ameliorating conflict.

They found that, on an average, the likelihood of the outbreak of a militarized interstate dispute declines by around 50 percent if both belong to the same RTA.

However, only RTAs that expand trade flows appear to have a substantial impact on conflict. In Africa, for example, RTAs that address the management of cross-border resource issues (such as water) are more effective in reducing military conflict than other RTAs.

Though both India and Pakistan are moving closer, it is at a snail's pace and constantly encountering hurdles.

Some of the above measures could divert attention from sticky matters and accelerate the speed of greater economic cooperation between the two nations through reduction (if not elimination) in tensions and mistrust and bringing in peace and tranquility in this region.

This article can also be viewed at: http://worldtradereview.com/

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Broad benefits of special economic zones
Financial Express, India, December 14, 2006

The real question is not can we afford to have SEZs, but can we afford not to

By Pradeep S Mehta

The commerce and finance ministries, as has been reported extensively in the news media, are currently at loggerheads over the way the current concept of special economic zones (SEZs) is to be handled in India. There is no quarrel on their need; while the finance ministry feels that tax rebates will result in huge losses from direct and indirect taxes, the commerce & industry ministry is arguing that short-term loses will be compensated for by vast overall gains in the long run.

Both ministries are using data to make their respective points. According to an estimate prepared by the finance ministry, the country will have to forego about Rs 100,000 crore, no small sum by any yardstick, on account of SEZ-granted tax rebates by the year 2009-10. While this figure can be challenged, according to an estimate by the commerce ministry, one million new direct jobs will be created on account of SEZs in the next five years. And, depending on the nature of an industry, every new direct job will create five to ten jobs through indirect employment. Imagine the gains generated by this huge increase in the consumer base, and the broader potential impact of SEZs begins to make itself clear.

Another contentious issue is the size of SEZs. Those who usually castigate China are looking towards that country to argue that Indian SEZs will be economically unviable. The argument is that Indian SEZs will be much smaller in size compared to Chinese SEZs, and hence the Chinese success story cannot be replicated here. This is a shallow argument. Politically, to begin with, it is far more difficult in India than China to acquire large tracts of land for such a purpose. This is a straightforward fact of democracy. Secondly, Chinese SEZs are mostly concentrated in a particular region of that country and, indeed, this is a big factor contributing to increasing inequality there. On the other hand, the present policy of the commerce ministry is to spread the formation of SEZs to all parts of India, which is likely to foster relatively balanced growth and development.

Land acquisition is another big issue, and one that tends to make news and attract popular attention for a variety of reasons. The commerce ministry has rightly decided that as far as possible, agricultural land (including wasteland which could be converted to agricultural land) should not be acquired for this purpose. While this may be good in theory, in practice many Indian states do not have sufficient free land. In India, wastelands constitute 17.6% of total cultivable land, and in high population-density states like West Bengal, this figure is less than 1%. Can industry be built in the air?

The food security argument is not a valid one. With the use of new technologies (particularly dry-land farming), food production can be increased rapidly on the same land. According to an estimate, even if 100,000 hectares of cultivable land in the state of West Bengal is taken away for industrial purposes, there will be no threat to the food security of that state. This does not, however, give governments the right to bully landowners and cultivators. They must get adequate compensation, and indiscriminate acquisition of land for SEZs should be stopped immediately.

Ideally speaking, state industrial development corporations should buy land directly from owners and sell them to industrial houses through the use of a competitive bidding process.

This will safeguard owners’ interest and industrialists can acquire land at lower transaction cost.

The commerce ministry has also taken a significant decision with regard to land use policy in SEZs. It is good that at least 50% of land will be used for industrial purposes, while 25% each will be used for infrastructure and other uses (such as housing). This will ensure better use of land; otherwise, the real estate mafia will be out to make a quick buck, a qualm that inspires an entirely different set of objections to India’s SEZs.

Other than the food security argument, it is being argued that a large number of agricultural jobs will be lost on account of acquiring agricultural land for SEZs. This is not true and figures will testify to that. According to the latest survey of agricultural workers, an agricultural worker gets an average 71 days’ employment a year. Compare this with the rate of unemployment in our country – it is very low, as the poor cannot afford to remain unemployed for a long period of time. A majority of agricultural workers in our country make a living by doing odd jobs. With a bit of skill development, they can easily be absorbed in productive employment in SEZs and ancillary industries. There will presumably be upward pressure on agricultural wages, as demand for agricultural labour will fall less than the fall in supply of such labour.

In short, the development challenge that India is facing today is two-pronged. On the one hand, how do we make our agriculture more productive so that we maintain our food security? On the other hand, how do we increase the manufacturing base to absorb a large army of unemployed and underemployed labour in industry?

India is an aspiring nation of young people, and unless these challenges are addressed with appropriate policies, the country is at serious risk of social and economic Balkanisation. The commerce ministry has taken the right decision by allowing a large number of SEZs, as they can address a significant part of these problems in a direct manner.

The author is Secretary General, CUTS International, a leading research, advocacy and networking group and can be reached at psm@cuts.org

This article can also be viewed at: http://www.financialexpress.com/

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Pompous prancing about is embarrassing and counter-productive
Financial Times, London, December 11, 2006

By Jean-Pierre Lehmann
Professor of International Political Economy at IMD, Lausanne, Switzerland & Founding Director, The Evian Group

Sir, Peter Mandelson, the European Union trade commissioner, is committing two serious errors ("EU plans to link labour standards to trade deals", December 6). Both are well illustrated in the first sentence of your article: "The European Union will try to improve working conditions in the developing world by demanding that trade partners must meet minimum labour standards in new bilateral trade deals."

What business is it of the EU to try to improve working conditions in the developing world? For 200 years Europe ravaged and exploited the developing world, with abysmal labour practices, as well as brutally mistreating its own labour, but now chooses to prance pompously about with its allegedly superior values that it wishes to impose on others. No doubt labour practices do need improvement in many parts of the developing world, but let the developing world (in collaboration with the appropriate international organisation, which is the International Labour Organisation, not the World Trade Organisation) sort out its own problems. As a European I find it extremely embarrassing, and in any case totally counter-productive, to have our political leaders and senior officials so manifestly display their incapacity to abandon colonial mentalities and colonial attitudes.

What the world needs is the conclusion of a constructive, inclusive, equitable and progressive trade agenda that will eliminate all the inequities that developing countries face in accessing the markets of the Organisation for Economic Co-operation and Development.

Mr Mandelson must be disciplined and made to understand that he is the trade commissioner and not the commissioner for saving humanity in the developing world. Indeed by far the biggest contribution the EU stands to make to improving the lives of people in the developing world is to open up its markets far more to the flow of goods and the flow of people from the developing world. This is win-win both for the EU and for the developing world. Efforts must be made by the commissioner to educate European citizens, consumers and politicians on the benefits and imperatives of an open and fair trade agenda, while refraining, in fact totally desisting, from pontificating.

The second big error is to engage in these bilateral deals in the first place. Mr Mandelson's task is to strengthen the multilateral system and bring the Doha development agenda to a successful conclusion. The objective of the multilateral system, as its name implies, is to be inclusive and its key principle is non-discrimination. Bilateral deals are by definition discriminatory and those that will lose out the most are poor countries and small and medium-sized enterprises. Bilateralism is an unfair Darwinian tactic to marginalise weak countries - so Mr Mandelson is pursuing bilateral deals with India and South Korea. But what about Laos, Bangladesh, Sri Lanka, the majority of the sub-Saharan economies and so on. Bilateralism also marginalises weaker corporate players aspiring to engage in the global market. Bilateral deals are highly complex, often including Kafkaesque rules of origin and high transaction costs, that the big, deep-pocketed multinationals can handle without great difficulty, but that eliminate newer, aspiring and smaller companies.

So while Mr Mandelson is presenting himself as the white knight for the downtrodden labourers of developing countries, he is in fact beefing up the large and strong countries and the large and strong corporations at the expense of small and weak countries and small and weak companies. This will have a very adverse effect on conditions generally, including the working conditions, of people in developing countries.

Prof. Lehmann is a member of the Advisory Committee of CUTS' project on Linkages between Trade, Development and Poverty Reduction

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Suspended WTO talks likely to bring fresh trouble
Financial Express, India, December 11, 2006

By Ashok B Sharma

Hoping to revive dying WTO negotiations, several think tanks are busy gauging the consequences of the situation. Talks regarding agriculture still remain a contentious and unresolved issue.

Several experts believe that there is not much chance of reviving the Doha Development Round as the political situation in the US has seen a dramatic change. The newly elected Democrats-dominated Congress will takeover from January 1, 2007. The Democrats, who are critical of the global trade regime, will dominate different committees and act as pressure groups to any move or policy of the present US administration.

The new Democratic chair of the Senate Agriculture Committee, Tom Harkin of Iowa, has also indicated that the WTO and Doha Agenda will not be a high priority, and he will focus much of his attention on expanding the Conservation Security Programme. US proposals on farm negotiations have come under fire from many developing countries, which have demanded cuts in farm subsidies.

In this context, experts believe that no positive movement in farm negotiations at the WTO will be possible at this stage and before the US fast track authority expires by July 2007. WTO director general Pascal Lamy has admitted, the “window of opportunity” has already passed. “I accept the WTO round will now not be completed before July next year… So this round will fail unless we get some sort of extension of the US Fast Track Authority.” In this situation many endorse the view expressed by commerce minister Kamal Nath who had earlier said, “No deal is better than a bad deal.” The developing countries should not rush for a deal, which is likely to place them at a disadvantage.

However, CUTS International has suggested that India should make efforts to revive and conclude the Doha negotiations as the country would gain from multilateral trade regime. It has said the cost of the suspension may have repercussions in terms of economic loss, negative impact on geo-politics, setback to economic reforms and increase in trade disputes. It added that with multilateral negotiations under suspension, countries are entering into preferential trading arrangements, which are not a substitute to multilateral trade regime.

CUTS also said since the launch of Doha Round in late 2001, exports from India have grown at a rate of more than 20% per annum. However, with its suspension, India may not be able to increase its exports, particularly in the farm sector, despite taking positive steps within the country, it said.

“High growth was seen in spite of the fact that new round did not result in significant trade liberalisation. However, our share in world trade has increased only by 0.1% during the last 5 years. Contrary to this, China has been able to increase its share in world trade from 4.3% in 2001 to 6.6% in 2004,” the India-based CUTS International said.

However CUTS views on India’s benefits under WTO regime are debatable. The country’s imports, too, have increased substantially. Whether India will be able to maintain its growth in exports in the suspension period is also debatable.

However, the view that countries will enter into prerential trading arrangement, leading to a WTO-plus regime seems logical and is already happening. The most important point made by CUTS is the possible increase in trade disputes. The process has already begun like US imposing anti-dumping measures on several commodities.

The CUTS study said rich countries have become more vulnerable to attract more disputes cases in the WTO in view of their huge farm subsidies and distorted trade practices.

The developing countries, in this situation, would be hiring legal professionals from developed countries to fight their cases at