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India on Doha

The new Atlantic Media Network blog has a very useful press roundup on the Doha round collapse, focused on the question who 'did it in'. They quote papers from both sides of the Atlantic on the matter.

The coverage alternates between blaming India and China (India foremost) and choosing the safe, neutral storyline by claiming that they are 'asserting' their newfound power.

One perspective that certainly needs to be added is that of India itself. Here are three stories from the Times of India:

'Do As the Americans Did' is a leader by Arun Maira that focuses on India's need to build up its economy and the associated need for protection. The United States focus as a case study in this matter, as its strongest period of growth (1890-1910) happened at a time when it was protectionist, and Europe was more liberal. Maira claims that 'healthy' free trade must be the end point of an evolutionary process.

'Save Doha' is the paper's editorial. It comes down to the point that India's and China's demands for the threshold for a safeguard mechanism were too protectionist, but that the EU and US could have found a middle point for a compromise. "The world", the paper concludes "can't wait till Indian agriculture is ready to face global competition, of course. But neither can the world ignore India and China's concerns."

'Playing to the Gallery' is another leader, by Narendar Pani. He compares the single-issue focus of the current commerce minister with that of the former, Murasoli Maran, who categorically opposed labour standards at the WTO ministerial in Seattle, 1999. According to Pani, this has led to the BBC arbiting over labour standards instead of the WTO, as western firms are mindful of public pressure. The obstruction back then has turned out to have mainly symbolic consequences and Pani expects similar results from India's current obstruction.


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Pat Patterson on :

Arun Maira might have been on to something except the writer left out one critical difference between the US then and India now. There were virtually no limits on capital flowing into the US and foreign ownership of assets. Thus for example Bayer could set up its own factories and sales networks in the US without American "partners." Dozens of German owned insurance companies flourished in the US during this period until they found that they would indeed have to pay the claims from the San Francisco Earthquake and in response simply closed their solely owned offices in the US. Many British and Scottish investors put their money into cattle and farming without having any limits placed on ownership. Indian companies today can easily purchase the assets of American and European companies in almost any area yet India itself still has strict limits on the percentage foreign investors can own and in some cases what they can own. There are literally hundreds of exceptions that the Indians due not allow foreign investment in yet were normal in the period of American history.

Nanne on :

Thanks Pat. What Maira says reflects a broader view in India that protection is needed to build its economy. I have some sympathy for it, especially when it's related to agriculture, but it depends upon a credible state strategy to move the market towards a level where it is competitive.

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