Global Policy Forum

By C. Rammanohar Reddy

With rising oil prices and the falling euro dominating the run-up to the 2000 Annual Meetings of the International Monetary Fund and the World Bank, it was left this morning to the speakers at a seminar, who included the Union Finance Minister, Mr. Yashwant Sinha, to stress that equitable globalisation - a constant refrain of speeches here - would not be possible with the way the international trade regime was presently structured.

In his first public engagement after his arrival here yesterday, Mr. Sinha, while going along with the view that trade had a beneficial impact on poverty reduction, reeled off a series of statistics in support of his argument that there was no equity in what now passed for the "rules-based system" of global trade.

That the average import tariff, imposed by the developed countries on the developing countries' exports, was four times the tariff on goods traded among themselves, the custom duty revenues collected annually by the developed countries from poor country exports exceeded what they provided by way of official development assistance and farm subsidies in the rich countries were twice as high as agricultural exports of the poor countries were a few of the points made by Mr. Sinha.

The Finance Minister, without referring to the European Union by name, said, "India accounts for 14 per cent of the anti-dumping actions imposed by one trading bloc though we account for only one per cent of their trade." The seminar, one of the many being organised on the sidelines of the IMF-World Bank meetings, was on "Harnessing International Trade for Development." Instead, it saw a consensus of views among the speakers on the imbalances in the global trading regime. Mr. Kevin Watkins of the U. K. charity, Oxfam, was particularly acerbic accusing the World Bank and the IMF of silently colluding in the perpetuation of the unfair global trade regime.

"IMF programmes require poor countries to lower their trade barriers but the organisation cannot do a thing about the massive barriers that the U.S. and the E.U. have in place to keep out from developing countries." While the IMF and World Bank were making much of the loan write-offs under the Heavily Indebted Poor Country (HIPC) Initiative, "for every dollar that rich countries give by way of aid and debt-relief, they deprive the poor countries of $14 through unfair trade practices."

The Oxfam official said that from there being an equality in global trade practices, "in agriculture and other areas of world trade, the 'level playing field' runs all the way downhill from Europe and the U.S." Everyone agreed that the global trading regime was tilted against the developing countries but Mr. Watkins' attempt to draw attention to the need to redress the imbalances in the benefits from trade did not go very far. When he referred to the contrast between the success of Bangalore in information technology and the poverty of Bihar and Uttar Pradesh, Mr. Sinha responded by saying how all the State Governments in India, including Bihar and Uttar Pradesh, were competing to attract investments in IT.

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