• Too important to leave aside
  Financial Express, India, March 31, 2007

• Bengal violence may delay SEZs, investors get restless
  Indian Express, March 15, 2007

• India to notify LDC’s tariff sops package before June
  Financial Express, India, March 14, 2007

• Government, NGOs and the WTO — Some myths and realities
  Business Line, March 12, 2007

• WTO and the myths about NGOs
  Economic Times, March 12, 2007

• Rights obstacle to EU-India trade pact
  Financial Times, March 05, 2007

 In Media Archive...

Too important to leave aside
Financial Express, India, March 31, 2007
 

By Pradeep S Mehta

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Bengal violence may delay SEZs, investors get restless
Indian Express, March 15, 2007

By Shishir Gupta / Vikas Dhoot

The political fallout of the violence at Nandigram today may stop further notifications of Special Economic Zones well beyond the UP elections.

Though several state chief ministers including DMK’s Karunanidhi and Congress’s Y S Rajasekhara Reddy have written to Prime Minister Manmohan Singh and the chairman of the empowered Group of Ministers on SEZs, Pranab Mukherjee, to lift the freeze on SEZ approvals as investors are getting edgy, a senior government official told The Indian Express today that the ministers’ group may not even meet till the UP elections are over. So lifting the freeze on SEZs seems out of the question till then, he said.

The West Bengal violence comes at a time when the Commerce Ministry had allayed the concerns of the Congress party by briefing at least two former chief ministers as a precursor to the expected meeting of the Empowered Group of Ministers (EGoM) this month to lift the January 23 suspension on SEZ notifications. As of now, only 63 out of a total 235 approved SEZ that are not facing any land acquisition issues have been notified by the UPA government.

Government sources said that even as the UPA government tarries on the notifications, footwear multinational Nike, which has a cleared SEZ plan in Tamil Nadu, has indicated that it would walk out of India as it has commercial commitments to meet next year. Nike has plans to invest $300 million into the SEZ in and has even ordered machinery for the project.

More big-ticket investors are in the process of pulling the plug on their SEZ plans. Apart from Nike, US-based Velankani Communications Tech, which intended to set up a $600 million IT SEZ in Tamil Nadu, is one of them. Nike and Velankani alone were expected to employ over 40,000 workers in the state.

Now, DMK supremo M Karunanidhi is likely to visit New Delhi soon to meet Congress president Sonia Gandhi, in a last-ditch attempt to prevent investors’ flight from the state. His strongly-worded letter to the PM a few weeks back had failed to break the impasse.

In Andhra Pradesh, Brandix Apparels, which has been awaiting the notification of its textile SEZ to start operations, is now considering retrenching the 600-odd women workers it trained and employed. “They are not here for charity. If their commercial operations are not starting, they can’t keep employees on their rolls indefinitely,” the government official said.

Commerce Ministry officials too seem to have given up hope of a resolution of the current stalemate at least till the UP elections conclude. Till then, they are bracing for a sharp dip in investor enthusiasm for SEZs. “We expect a 25 per cent drop from the existing investment plans for SEZs,” an official said.

The fact is that killing of 11 people in the police firing in Nandigram could not have come at a worse time. Last week, the Commerce Ministry briefed former Madhya Pradesh Chief Minister Digvijay Singh and former Karnataka Chief Minister Veerappa Moily on the entire SEZ policy of the UPA government in a bid to address all the concerns of the High Command. The two former CMs were given detailed clarifications on the following issues:

• SEZ impact on domestic industry (Ministry said that this is one of the many earlier schemes like EOU)

• Tax losses to the Indian economy (Ministry said two studies ICRIER by Finance Ministry and CUTS International by Commerce Ministry had been commissioned to study this)

• Ceiling of the maximum size of multi-product SEZs (already under consideration of the EGoM)

• Land acquisition problems

Sources said the original plan was that the two former CMs would then report back to the High Command and Pranab Mukherjee. This would then be followed by summoning of EGOM on March 21 before the present Budget session goes into recess.

However, the police action at Nandigram has taken the wind out of this exercise and will force the Congress leadership to keep the SEZ notifications into cold storage till the UP elections are over.

It is another matter that the SEZs were expected to provide 15 lakh additional jobs and get an investment of over Rs 58,000 crore before the 2009 general elections.

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

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India to notify LDC’s tariff sops package before June
Financial Express, March 14, 2007

India on Tuesday said it would work out a comprehensive trade package to least developed countries (LDC) in the next two months. This is a part of India's unilateral trade preference (UTP) scheme to poor nations.

Commerce and industry minister Kamal Nath said that his ministry would forward the package to the Cabinet in two months after incorporating suggestions given by all the LDCs. The Centre would, subsequently notify this scheme.

Earlier in the day, the Trade and Economic Relations Committee (TERC) led by the Prime Minister Manmohan Singh discussed the UTP scheme for LDCs.

Dipak Patel, former Minister of Trade and Industry of Zambia, said at a seminar on Doha Round that India needs to move fast on the package for duty-free quota-free (DQFQ) access to the least developed countries (LDCs) as it is an important element of the Doha mandate and the Hong Kong declaration.

DQFQ concessions were sought from ‘‘advanced developing countries’’ at the Hong Kong Ministerial Conference in December 2005 when these issues were debated.

The rich countries agreed to extend this concession on 97 % of tariff lines, though that left a gap where products sensitive to rich economies such as textiles could be exempted.

This had come in for considerable criticism, and one of the spin-offs was that big developing countries like India, China and Brazil too should extend such preferential offers.

Brazil has already notified its DFQF scheme, while India and China have announced the intention but are yet to notify it.

Pradeep Mehta, secretary general of CUTS International, said, ‘‘The intent needs to be translated into action, and delays will only skew the southern solidarity in the WTO process’’.

As per the UN, the socio-economic development indicators and the human development index of the LDCs are the lowest in the world. Thirty four of these 50 countries are located in Sub-Saharan Africa, while 10 are in Asia. Worst conditions of poverty, wide-spread corruption, lack of a proper legal frame work and authoritarian form of government are the characteristics of these countries.

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

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Government, NGOs and the WTO — Some myths and realities
Business Line, March 12, 2007

By Pradeep S Mehta

The multilateral trading system under the aegis of the World Trade Organisation (WTO) has come a long-way since this organisation was set up in 1995 following the conclusion of the Uruguay Round of talks under the General Agreement on Tariffs and Trade (GATT). One of the striking features of the WTO in its first decade of existence is its remarkable ability to attract the attention of non-governmental organisations.

According to WTO's definition, any entity other than a government is an NGO. This means the WTO considers organisations representing business and public interest on a par. Itis another matter that the business interest often receives more attention as far as international trade is concerned.

From barely a few NGOs (that too mostly from the rich world) participating in the WTO's first Ministerial in Singapore in 1996, hundreds attended the sixth in Hong Kong in 2005. The NGOs represent a range of interests: Business (including small business), consumer, environment and social issues.

There are several reasons for this growing interest among the NGOs on matters WTO. Till the Uruguay Round, international trade issues under the GATT system were mostly confined to those that were mainly of interest to rich countries.

For the first time, in the Uruguay Round, issues such as agriculture, textiles and clothing, services, investment, and intellectual property rights were brought under the ambit of the multilateral trading system.

These issues concern the lives of the common people, and thus NGOs started taking interest in the multilateral trading system. Even then it was a few NGOs of the rich countries, that were active.

The interest of developing country NGOs in WTO issues has started growing following the Singapore Ministerial. In 1996, the International Centre for Trade and Sustainable Development (ICTSD) was established in Geneva.

A joint initiative of Northern and Southern NGOs, its main mandate was to inform the larger civil society on what was happening in Geneva vis-a-vis the WTO and for more than a decade ICTSD has been doing this.

For a large number of NGOs from poor countries, and for governments, ICTSD's weekly and monthly bulletins are the major sources of information on WTO matters and thus, getting gradually empowered.

Though NGO interests in WTO matters have grown over the years, there are yet certain myths with regard to their positions, etc. This is not to say that NGO positions are homogenous on all or majority of issues (in fact, they are more often different), but it is usually perceived that all NGOs are opposed to the WTO. This is a myth.

A large number of NGOsare of centrist philosophy and do understand the virtues of a rule-based system, which is what the WTO is.

It is another matter that on many occasions several countries have violated WTO rules and in some cases, these were rectified through the WTO's dispute settlement mechanism. Many NGOs have taken active part in many of these disputes by voicing their concerns and in some cases by submitting amicus briefs.

It is another myth that the Seattle Ministerial collapsed due to NGOs marching in the streets. The reality was that Seattle was abandoned for two reasons: Irreconcilable differences between the EU and the US on further opening up agricultural trade (this continues to dominate the debate even today) and Washington's insistence on bringing in such contentious issues as labour standards into the WTO, which was resisted by the poor countries.

A second myth is that countries like India look at NGOs (even the domestic ones) with suspicion, as international agencies and governments of rich countries support them. True, developing country NGOs are mostly supported by donors from the Western world, but these organisations rarely follow the positions of the rich countries on WTO matters.

In many cases, their positions differ substantially with those of the rich countries (even with NGOs of the rich world) but it is true that NGOs often provide a platform where the rich and the poor countries reconcile their positions on specific issues; for instance, the TRIPs and public health accords.

And since the Singapore Ministerial, New Delhi has started engaging NGOs in WTO matters. Immediately after Singapore, an advisory committee was formed by the Commerce Ministry to help trade negotiators on WTO matters, which included two NGO representatives. At Cancun, the Commerce Minister addressed a gathering of NGOs and a similar event was organised in Hong Kong also.

Following Cancun and in the run-up to the Hong Kong ministerial, the Commerce Ministry regularly organised consultations with NGOs, and many of India's positions (particularly on agriculture) were based on such consultations.

This practice is being followed religiously. Clearly, countries like India have understood the importance of an "inclusive process" while taking positions on WTO matters and this is one way of mainstreaming international trade into our development strategy.

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.thehindubusinessline.com/

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WTO and the myths about NGOs
Economic Times, March 12, 2007

By Pradeep S Mehta

One of the striking features of the WTO in its first decade of existence is its remarkable ability to attract attention from NGOs. According to WTO’s definition, any entity other than a government is a non-governmental organisation. This means that WTO considers organisations representing business interest and those representing public interest at par. It’s true business interest often receives more attention as far as international trade is concerned.

From barely a few NGOs (that too mostly from the rich world) participating in WTO’s first ministerial conference in Singapore in 1996, hundreds of NGOs have participated in the sixth one held in Hong Kong in 2005. They represent a variety of interests: business (including small business), consumers, environment and social issues.

There are several reasons for this growing interest among the NGO community in WTO matters. Till the Uruguay Round negotiations, which lasted from the late 1980s to early 1990s, international trade issues under the GATT system were mostly confined to those that were mainly of interest to rich countries. For the first time, in the Uruguay Round, issues such as agriculture, textiles & clothing, services, investment and IPRs were brought under the ambit of the multilateral trading system.

These issues concern the lives of the common people and thus NGOs have started taking interest in the multilateral trading system. Even then it was a few NGOs in rich countries, which were active in the field. I remember taking part in the Hong Kong Congress of the then International Organisation of Consumer Unions (now Consumers International) in 1991 where the famous Dunkel draft on the Uruguay Round was discussed heatedly. Unfortunately, many of us from the South were unable to understand what was going on.

Interest of NGOs from developing countries in WTO issues have grown following the Singapore ministerial conference. In 1996, the International Centre for Trade and Sustainable Development (ICTSD) was established in Geneva.

It was a joint initiative of Northern and Southern NGOs, of which CUTS was one of them. Its main mandate was to inform the larger civil society on what was happening in Geneva with regard to the WTO. CUTS also played its bit in its endeavour to develop the capacity of Southern NGOs (particularly from South Asia and eastern and southern Africa) through training and other means.

Even though NGOs’ interest in WTO matters has grown over the years, there are yet certain myths with regard to their positions, etc. Often it is perceived that all NGOs are opposed to the WTO. This is a myth. There are a large number of NGOs, which are centrist in their philosophy and do understand the virtues of a rules-based system that the WTO is.

It’s another matter that on many occasions several countries have violated WTO rules and in some cases, they were rectified through the WTO’s dispute settlement mechanism. Many NGOs have taken active part in many of these disputes by voicing their concerns and in some cases by submitting amicus briefs.

It is again a myth that the Seattle ministerial conference of the WTO collapsed due to NGOs marching in the streets. The reality was that Seattle was abandoned due to two reasons: irreconcilable differences between EU and US on further opening up of agricultural trade (which continue to dominate the debate even today) and the US insistence on bringing in contentious issues such as labour standards into the WTO, which was resisted by the poor countries.

Another myth is that countries like India look at NGOs suspiciously, as mostly international agencies and governments of rich countries support them. There is little truth in this allegation. It is true that developing country NGOs are mostly supported by donors from the western world, but there is no way that they tow the positions of the rich countries on WTO matters. In many cases, their positions differ substantially with those of rich countries (even with NGOs of the rich world) but it is also true that NGOs often provide a vehicle through which the rich and the poor countries reconcile their positions on specific issues, of which the TRIPs and public health accord is one.

Since the Singapore ministerial conference, the Indian government has started engaging NGOs in its activities on WTO matters. Immediately after Singapore, an advisory committee was formed by the ministry to help our trade negotiators, which included two NGO representatives. Both at Cancun and Hong Kong, the Indian commerce minister addressed a gathering of NGOs.

Following Cancun and in the run-up to the Hong Kong ministerial, the department of commerce regularly organised consultations with NGOs and many of India’s positions (particularly on agriculture) were based on such consultations and this practice is being followed religiously. The truth is that countries like India have understood the importance of an “inclusive process” while taking positions at the WTO.

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://economictimes.indiatimes.com/

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Rights obstacle to EU-India trade pact
Financial Times, March 05, 2007

By Jo Johnson

Indian objections to the inclusion of a standard “human rights and democracy” clause in a proposed free trade agreement with the European Union have emerged as a serious stumbling block, the Financial Times has learnt.

The row is a setback for the ambitious agenda set at the EU-India summit in Helsinki in October last year, when both sides pledged to deepen economic and political ties.

“This clause would, of course, be a deal-breaker,” Kamal Nath, India’s commerce minister, said in an interview.

“This is meant to be a ­specifically targeted trade and investment agreement, which it will not be if other elements come into it.”

Since a 1995 EU Council decision by member states, the European Commission has systematically included a so-called “essential elements” clause in bilateral trade and co-operation agreements. It now applies to agreements with more than 120 countries.

However, the Commission has triggered an intense debate among the EU’s member states by pushing for an apparent exception for India, on the grounds that a 1994 EU-India co-operation agreement covers human rights questions.

Peter Power, spokesman for Peter Mandelson, EU trade commissioner, said: “Given how much both countries can get out of it, we feel we should forge ahead on the basis of strict economic criteria, leaving more political considerations for other agreements.”

Commission officials privately acknowledged that the outcome of the debate in the EU Council was “too difficult to predict”.

One said: “The council is going through the detail of the agreement at the moment. We are not out of the woods.”

Bilateral trade in goods between India and the EU amounted to $40bn in 2006 and trade in services a further $8bn. Both sides say they want a “deep and comprehensive” agreement that goes beyond multilateral commitments and is not trade-diverting.

New Delhi argues that the “essential elements” clause conflicts with India’s longstanding position that economic agreements should not be “contaminated” by political riders.

“India suspects that such clauses provide protectionist cover,” said Pradeep S. Mehta, of Consumer Unity & Trust Society, an Indian trade think-tank.

“Because of its economic performance, India is now more self-confident about when it will give ground and when it will not give ground.”

Mr Nath said: “This is a win-win deal for both sides and the EU must evaluate how much it has to gain from this agreement. It’s up to the EU to work out how it wants to proceed.”

India is a member of the United Nations Human Rights Council, but ranks low, according to the Asian Human Rights Commission, among the international community in terms of the ratification of international conventions and covenants.

Although it has signed the UN Convention against Torture, for example, it has resisted ratifying it on the grounds that domestic mechanisms within the country are capable of addressing the issue.

India is keen to launch an FTA with the EU as soon as possible. Manmohan Singh, prime minister, regards it as a low-key way of keeping the reforms process moving forward at a time when there is no consensus for more overt liberalisation.

This news item can also be viewed at: http://www.ft.com/

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