In Whose Interests?

The United Progressive Alliance government seems to be determined to undermine its own position at the Doha round talks of the World Trade Organisation (WTO), which are now at a crucial stage in Geneva. The Prime Minister’s Office (PMO) has at times taken different positions from what the commerce ministry has been negotiating for, especially in the areas of agriculture and industry. The latest such incident is the public statement of the media advisor to the prime minister, Sanjaya Baru, that rising international food prices could affect India’s position at the WTO – meaning that it will be in India’s interests if the US and European Union maintain subsidies since food imports will then be cheaper than if there were no subsidies. These remarks were made at a seminar in New Delhi in “a personal capacity” but India’s trading partners will surely see this as New Delhi having changed course on the main issue in the Doha round, namely, substantially reducing or eliminating trade-distorting farm subsidies and is already being interpreted as such in Geneva.

The statement – coming days before the finalisation of the government’s negotiating position – reveals the degree to which the PMO is anxious to reach an agreement at the WTO that seems to be more in line with US interests. Though the commerce ministry has issued a formal denial saying “the stand of the government on effective and substantial cuts in Overall Trade Distorting Domestic Support in agriculture remains unchanged”, it is unlikely that India’s credibility will be restored at this crucial juncture.