archives: WTO InfoINTERNATIONAL ECONOMY:
India opposes talks on investment rules
By Edward Luce in New Delhi and Guy de Jonquires and Frances, Williams in Geneva
Financial Times; Aug 27, 2003India yesterday strongly reaffirmed its determination to oppose negotiations on investment rules in the Doha world trade round, potentially setting the scene for a serious clash at the World Trade Organisation's ministerial meeting in Cancn, Mexico, in two weeks.
"India is a large and volatile democracy," Arun Jaitley, the commerce and industry minister, told the Financial Times. "The common thread [of opposition to including rules governing investment in the WTO talks] cuts across all opinion and the government of India would simply be giving voice to that."
If maintained, India's stance could put it on a collision course with the European Union and other countries including Japan, South Korea and Switzerland.
They want the meeting to initiate negotiations on investment as well as on competition policy, transparency in government procurement and trade facilitation.
Efforts to narrow the differences in the WTO's preparatory talks for Cancn have been unsuccessful, forcing Carlos Prez del Castillo, chairman of the organisation's ruling general council, to confront ministers with a stark choice between launching negotiations or shelving the issues indefinitely pending further study.
India has long been suspicious of foreign investment even though it has liberalised its policies in recent years.
Many other developing countries share India's concerns, saying a WTO agreement would restrict their policy freedom without guaranteeing increased investment inflows.
"There is no consensus among WTO members to discuss an agreement on investment," Mr Jaitley said. "We would be concerned about the compromise with the space for sovereign decision-making [that the agreement would entail]."
India is less strongly against negotiations on the three other issues. Mr Jaitley said it was pushing ahead with reforms, having recently passed a strong competition law and embraced greater trans-parency in public pro-curement, but there was no support "in any constituency" for a multilateral agreement on investment.
Some WTO members have suggested separating the four issues so progress can be made on the less contentious ones.
However, the EU and Japan have so far resisted such an approach, fearing it would kill any remaining prospect of negotiations on investment.
Securing a WTO investment agreement is the only big objective in the Doha round for Japan, where businesses hope it would help protect their extensive operations in China. However, a deal is a far lower priority for most industries in the EU, which appears to see an agreement mainly as compensation for giving ground on farm trade.
Mr Jaitley also renewed demands for developed countries to lower export subsidies, domestic support and farm trade barriers.
"The challenge of Doha is not how to make the prosperous and highly subsidised [western] farmer even more prosperous," he said.
"It is to address the security concerns of our own 650m unsubsidised farmers. India also wants a sufficient cushion with regard to its own agricultural tariffs."
wto news | wto info | www.agp.org (archives) | www.all4all.org