The 1st PIO-Parliamentarian Conference was inaugurated by Prime Minister of India

The 1st PIO-Parliamentarian Conference was inaugurated by Prime Minister of India, Shri Narendra Modi here today. Welcoming the delegates to the Conference, the Prime Minister said that while many people may have left India over the course of hundreds of years, India continues to have a place in their minds and hearts. The Prime Minister said that PIOs (Persons of India Origin) are like permanent ambassadors of India and partners for India's development, who have an important position in the Action Agenda till 2020, drafted by the NITI Aayog.

,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,The Annual Meeting 2018 of the World Economic Forum shall be held from 23-26 January 2018 at Davos in Switzerland with the theme of 'Creating a Shared Future in a Fractured World'. Prime Minister, Shri Narendra Modi will be participating in the Annual Meeting. He will be the first Prime Minister to attend the Annual Meeting of the Forum since 1997. The Annual Meeting will be attended by 350 political leaders (among them over 60 heads of state or government), the chairs and chief executive officers of the world's most important companies and over 1,000 leaders from among other walks of life.

The Prime Minister will address the Inaugural Plenary Session at 11:00 AM [3:30 PM 1ST] on 23rd January 2018. He will also meet top Global Business Leaders in Davos. He will also be interacting with the members of the International Business Council consisting of 120 top chief executives of major transnational corporations across sectors.

Is China bribing its way to superpower status?

Is China bribing its way to superpower status?
The scale at which China is using its capital for securing political influence is unprecedented
In a throwback to the golden days of the Middle Kingdom when foreign rulers brought with them tributes for the Chinese emperor, French President Emmanuel Macron on his recent visit presented Chinese President Xi Jinping with an eight-year-old gelding. Macron hopes that a charm offensive directed at Xi can help his task of reinvigorating the French economy and industries. Airbus, for instance, is betting its future on large orders from China. The French president has, so far, only offered up a horse and has expressed his admiration for Chinese civilization. David Cameron, the former British prime minister—who was announced last month to be taking over a leadership role in a joint UK-China investment fund—went further.

Before Macron, it was Cameron who championed the rise of China, and closer UK-China and Europe-China ties. Among other deals, Cameron approved massive Chinese investments in a nuclear power project at Hinkley Point in Somerset. Controversial on both security and commercial grounds, the deal was deemed not to be in Britain’s interests by many critics. Theresa May, Cameron’s successor, even shelved the project temporarily after taking charge. So, is there a smoking gun to link the Hinkley Point deal with Cameron’s latest job? Not really. But it was reported (goo.gl/ufg2Zn) that the former British prime minister lobbied for this fund to be set up on behalf of Peter Gummer, an old associate of Cameron and donor of the Conservative Party—enough to raise eyebrows.

As the news of Cameron taking over a fund meant to project Chinese influence across Europe and Asia came out, many were quick to draw parallels with Gerhard Schröder, former German chancellor. After losing his office in 2005, Schröeder bagged a job with Gazprom, the Russian energy giant. During his tenure, Schröder had staunchly backed the contentious Nord Stream pipeline that was a joint project of Gazprom with two German companies.

These instances might be from developed European countries—but leaders of smaller, poorer countries are much more vulnerable to the ambitions of a country with deep pockets like China. After being thrown out of power, leaders in a number of countries have been investigated for accepting bribes from Chinese companies. The former president of Sri Lanka, Mahinda Rajapaksa, has been accused of accepting bribes from China Harbour Engineering Company, a subsidiary of state-owned China Communications Construction Company. Rajapaksa’s tenure saw several high-profile Chinese investments in Sri Lanka. Many of those, including an airport and a seaport in Hambantota—the home base of Rajapaksa—have proven to be commercial non-starters. In Nigeria, just three days before exiting office, former president Goodluck Jonathan approved an out-of-court settlement—now being probed by US agencies—between Addax Petroleum (owned by Chinese oil giant Sinopec) and the Nigerian National Petroleum Corp., saving the former millions of dollars.

In 2012, the husband of former Philippine president Gloria Macapagal-Arroyo was arrested on charges of accepting bribes to push a deal between the Philippine government and the Chinese telecom company ZTE. Mohammad Nasheed, the leader-in-exile of Maldivian opposition, has accused President Abdulla Yameen of corruption in leasing out islands to foreign countries. India, too, was concerned about the Yameen government leasing out the Feydhoo Finolhu island to a Chinese company at a throwaway price without competitive bidding. Known for his proximity to China, Yameen again surprised New Delhi in November last year by passing a free trade agreement with China through the Maldivian parliament in an emergency session called at short notice with most of the opposition members unavailable to attend.

As China pushes its ambitious trillion-dollar Belt and Road Initiative, such sweetheart deals can be expected in greater numbers. India’s smaller neighbours are especially vulnerable, but New Delhi can do little as it cannot match Beijing’s largesse. India can indeed partner with other countries like Japan and the US to take up infrastructure projects in these countries. But even so, it is difficult to match Chinese state-controlled firms with excess capacity and a bounty of cash to throw at projects and leaders. It is not, in any case, a replacement for the citizens of the host countries realizing that Chinese money unaccompanied by domestic institutional reforms and local capacity development cannot make them rich. Conversely, it can exacerbate local political economy problems by encouraging venality and corruption.

As economist William Easterly has argued, foreign aid discourages the development of the right market institutions that would be required for higher investment flows unmediated by corrupt political practices. China’s support is not even in the form of aid, but through more distortionary high-interest loans. Often, the labour and the input materials in these projects are also sourced from China. Moreover, the investment flow is dictated by political rather than market choices. The result is a host country saddled with white elephants not generating enough capital to pay back the loans. Sri Lanka has already seen these fears come true.

Other countries too make strategic use of foreign aid. The US, most prominently, deploys aid (goo.gl/MSfeh9) to win votes in the UN. Israel does this (goo.gl/oTzyM2) as well. But the scale at which China is using its capital for securing political influence is unprecedented—and the consequences could be deeply felt across the globe.

Will Chinese loans help poor countries build infrastructure and prosper?

Is China bribing its way to superpower status?

The scale at which China is using its capital for securing political influence is unprecedented
In a throwback to the golden days of the Middle Kingdom when foreign rulers brought with them tributes for the Chinese emperor, French President Emmanuel Macron on his recent visit presented Chinese President Xi Jinping with an eight-year-old gelding. Macron hopes that a charm offensive directed at Xi can help his task of reinvigorating the French economy and industries. Airbus, for instance, is betting its future on large orders from China. The French president has, so far, only offered up a horse and has expressed his admiration for Chinese civilization. David Cameron, the former British prime minister—who was announced last month to be taking over a leadership role in a joint UK-China investment fund—went further.

Before Macron, it was Cameron who championed the rise of China, and closer UK-China and Europe-China ties. Among other deals, Cameron approved massive Chinese investments in a nuclear power project at Hinkley Point in Somerset. Controversial on both security and commercial grounds, the deal was deemed not to be in Britain’s interests by many critics. Theresa May, Cameron’s successor, even shelved the project temporarily after taking charge. So, is there a smoking gun to link the Hinkley Point deal with Cameron’s latest job? Not really. But it was reported (goo.gl/ufg2Zn) that the former British prime minister lobbied for this fund to be set up on behalf of Peter Gummer, an old associate of Cameron and donor of the Conservative Party—enough to raise eyebrows.

As the news of Cameron taking over a fund meant to project Chinese influence across Europe and Asia came out, many were quick to draw parallels with Gerhard Schröder, former German chancellor. After losing his office in 2005, Schröeder bagged a job with Gazprom, the Russian energy giant. During his tenure, Schröder had staunchly backed the contentious Nord Stream pipeline that was a joint project of Gazprom with two German companies.

These instances might be from developed European countries—but leaders of smaller, poorer countries are much more vulnerable to the ambitions of a country with deep pockets like China. After being thrown out of power, leaders in a number of countries have been investigated for accepting bribes from Chinese companies. The former president of Sri Lanka, Mahinda Rajapaksa, has been accused of accepting bribes from China Harbour Engineering Company, a subsidiary of state-owned China Communications Construction Company. Rajapaksa’s tenure saw several high-profile Chinese investments in Sri Lanka. Many of those, including an airport and a seaport in Hambantota—the home base of Rajapaksa—have proven to be commercial non-starters. In Nigeria, just three days before exiting office, former president Goodluck Jonathan approved an out-of-court settlement—now being probed by US agencies—between Addax Petroleum (owned by Chinese oil giant Sinopec) and the Nigerian National Petroleum Corp., saving the former millions of dollars.

In 2012, the husband of former Philippine president Gloria Macapagal-Arroyo was arrested on charges of accepting bribes to push a deal between the Philippine government and the Chinese telecom company ZTE. Mohammad Nasheed, the leader-in-exile of Maldivian opposition, has accused President Abdulla Yameen of corruption in leasing out islands to foreign countries. India, too, was concerned about the Yameen government leasing out the Feydhoo Finolhu island to a Chinese company at a throwaway price without competitive bidding. Known for his proximity to China, Yameen again surprised New Delhi in November last year by passing a free trade agreement with China through the Maldivian parliament in an emergency session called at short notice with most of the opposition members unavailable to attend.

As China pushes its ambitious trillion-dollar Belt and Road Initiative, such sweetheart deals can be expected in greater numbers. India’s smaller neighbours are especially vulnerable, but New Delhi can do little as it cannot match Beijing’s largesse. India can indeed partner with other countries like Japan and the US to take up infrastructure projects in these countries. But even so, it is difficult to match Chinese state-controlled firms with excess capacity and a bounty of cash to throw at projects and leaders. It is not, in any case, a replacement for the citizens of the host countries realizing that Chinese money unaccompanied by domestic institutional reforms and local capacity development cannot make them rich. Conversely, it can exacerbate local political economy problems by encouraging venality and corruption.

As economist William Easterly has argued, foreign aid discourages the development of the right market institutions that would be required for higher investment flows unmediated by corrupt political practices. China’s support is not even in the form of aid, but through more distortionary high-interest loans. Often, the labour and the input materials in these projects are also sourced from China. Moreover, the investment flow is dictated by political rather than market choices. The result is a host country saddled with white elephants not generating enough capital to pay back the loans. Sri Lanka has already seen these fears come true.

Other countries too make strategic use of foreign aid. The US, most prominently, deploys aid (goo.gl/MSfeh9) to win votes in the UN. Israel does this (goo.gl/oTzyM2) as well. But the scale at which China is using its capital for securing political influence is unprecedented—and the consequences could be deeply felt across the globe.

Will Chinese loans help poor countries build infrastructure and prosper?

Is China bribing its way to superpower status?

The scale at which China is using its capital for securing political influence is unprecedented
In a throwback to the golden days of the Middle Kingdom when foreign rulers brought with them tributes for the Chinese emperor, French President Emmanuel Macron on his recent visit presented Chinese President Xi Jinping with an eight-year-old gelding. Macron hopes that a charm offensive directed at Xi can help his task of reinvigorating the French economy and industries. Airbus, for instance, is betting its future on large orders from China. The French president has, so far, only offered up a horse and has expressed his admiration for Chinese civilization. David Cameron, the former British prime minister—who was announced last month to be taking over a leadership role in a joint UK-China investment fund—went further.

Before Macron, it was Cameron who championed the rise of China, and closer UK-China and Europe-China ties. Among other deals, Cameron approved massive Chinese investments in a nuclear power project at Hinkley Point in Somerset. Controversial on both security and commercial grounds, the deal was deemed not to be in Britain’s interests by many critics. Theresa May, Cameron’s successor, even shelved the project temporarily after taking charge. So, is there a smoking gun to link the Hinkley Point deal with Cameron’s latest job? Not really. But it was reported (goo.gl/ufg2Zn) that the former British prime minister lobbied for this fund to be set up on behalf of Peter Gummer, an old associate of Cameron and donor of the Conservative Party—enough to raise eyebrows.

As the news of Cameron taking over a fund meant to project Chinese influence across Europe and Asia came out, many were quick to draw parallels with Gerhard Schröder, former German chancellor. After losing his office in 2005, Schröeder bagged a job with Gazprom, the Russian energy giant. During his tenure, Schröder had staunchly backed the contentious Nord Stream pipeline that was a joint project of Gazprom with two German companies.

These instances might be from developed European countries—but leaders of smaller, poorer countries are much more vulnerable to the ambitions of a country with deep pockets like China. After being thrown out of power, leaders in a number of countries have been investigated for accepting bribes from Chinese companies. The former president of Sri Lanka, Mahinda Rajapaksa, has been accused of accepting bribes from China Harbour Engineering Company, a subsidiary of state-owned China Communications Construction Company. Rajapaksa’s tenure saw several high-profile Chinese investments in Sri Lanka. Many of those, including an airport and a seaport in Hambantota—the home base of Rajapaksa—have proven to be commercial non-starters. In Nigeria, just three days before exiting office, former president Goodluck Jonathan approved an out-of-court settlement—now being probed by US agencies—between Addax Petroleum (owned by Chinese oil giant Sinopec) and the Nigerian National Petroleum Corp., saving the former millions of dollars.

In 2012, the husband of former Philippine president Gloria Macapagal-Arroyo was arrested on charges of accepting bribes to push a deal between the Philippine government and the Chinese telecom company ZTE. Mohammad Nasheed, the leader-in-exile of Maldivian opposition, has accused President Abdulla Yameen of corruption in leasing out islands to foreign countries. India, too, was concerned about the Yameen government leasing out the Feydhoo Finolhu island to a Chinese company at a throwaway price without competitive bidding. Known for his proximity to China, Yameen again surprised New Delhi in November last year by passing a free trade agreement with China through the Maldivian parliament in an emergency session called at short notice with most of the opposition members unavailable to attend.

As China pushes its ambitious trillion-dollar Belt and Road Initiative, such sweetheart deals can be expected in greater numbers. India’s smaller neighbours are especially vulnerable, but New Delhi can do little as it cannot match Beijing’s largesse. India can indeed partner with other countries like Japan and the US to take up infrastructure projects in these countries. But even so, it is difficult to match Chinese state-controlled firms with excess capacity and a bounty of cash to throw at projects and leaders. It is not, in any case, a replacement for the citizens of the host countries realizing that Chinese money unaccompanied by domestic institutional reforms and local capacity development cannot make them rich. Conversely, it can exacerbate local political economy problems by encouraging venality and corruption.

As economist William Easterly has argued, foreign aid discourages the development of the right market institutions that would be required for higher investment flows unmediated by corrupt political practices. China’s support is not even in the form of aid, but through more distortionary high-interest loans. Often, the labour and the input materials in these projects are also sourced from China. Moreover, the investment flow is dictated by political rather than market choices. The result is a host country saddled with white elephants not generating enough capital to pay back the loans. Sri Lanka has already seen these fears come true.

Other countries too make strategic use of foreign aid. The US, most prominently, deploys aid (goo.gl/MSfeh9) to win votes in the UN. Israel does this (goo.gl/oTzyM2) as well. But the scale at which China is using its capital for securing political influence is unprecedented—and the consequences could be deeply felt across the globe.

Will Chinese loans help poor countries build infrastructure and prosper?

Is China bribing its way to superpower status?

The scale at which China is using its capital for securing political influence is unprecedented
In a throwback to the golden days of the Middle Kingdom when foreign rulers brought with them tributes for the Chinese emperor, French President Emmanuel Macron on his recent visit presented Chinese President Xi Jinping with an eight-year-old gelding. Macron hopes that a charm offensive directed at Xi can help his task of reinvigorating the French economy and industries. Airbus, for instance, is betting its future on large orders from China. The French president has, so far, only offered up a horse and has expressed his admiration for Chinese civilization. David Cameron, the former British prime minister—who was announced last month to be taking over a leadership role in a joint UK-China investment fund—went further.

Before Macron, it was Cameron who championed the rise of China, and closer UK-China and Europe-China ties. Among other deals, Cameron approved massive Chinese investments in a nuclear power project at Hinkley Point in Somerset. Controversial on both security and commercial grounds, the deal was deemed not to be in Britain’s interests by many critics. Theresa May, Cameron’s successor, even shelved the project temporarily after taking charge. So, is there a smoking gun to link the Hinkley Point deal with Cameron’s latest job? Not really. But it was reported (goo.gl/ufg2Zn) that the former British prime minister lobbied for this fund to be set up on behalf of Peter Gummer, an old associate of Cameron and donor of the Conservative Party—enough to raise eyebrows.

As the news of Cameron taking over a fund meant to project Chinese influence across Europe and Asia came out, many were quick to draw parallels with Gerhard Schröder, former German chancellor. After losing his office in 2005, Schröeder bagged a job with Gazprom, the Russian energy giant. During his tenure, Schröder had staunchly backed the contentious Nord Stream pipeline that was a joint project of Gazprom with two German companies.

These instances might be from developed European countries—but leaders of smaller, poorer countries are much more vulnerable to the ambitions of a country with deep pockets like China. After being thrown out of power, leaders in a number of countries have been investigated for accepting bribes from Chinese companies. The former president of Sri Lanka, Mahinda Rajapaksa, has been accused of accepting bribes from China Harbour Engineering Company, a subsidiary of state-owned China Communications Construction Company. Rajapaksa’s tenure saw several high-profile Chinese investments in Sri Lanka. Many of those, including an airport and a seaport in Hambantota—the home base of Rajapaksa—have proven to be commercial non-starters. In Nigeria, just three days before exiting office, former president Goodluck Jonathan approved an out-of-court settlement—now being probed by US agencies—between Addax Petroleum (owned by Chinese oil giant Sinopec) and the Nigerian National Petroleum Corp., saving the former millions of dollars.

In 2012, the husband of former Philippine president Gloria Macapagal-Arroyo was arrested on charges of accepting bribes to push a deal between the Philippine government and the Chinese telecom company ZTE. Mohammad Nasheed, the leader-in-exile of Maldivian opposition, has accused President Abdulla Yameen of corruption in leasing out islands to foreign countries. India, too, was concerned about the Yameen government leasing out the Feydhoo Finolhu island to a Chinese company at a throwaway price without competitive bidding. Known for his proximity to China, Yameen again surprised New Delhi in November last year by passing a free trade agreement with China through the Maldivian parliament in an emergency session called at short notice with most of the opposition members unavailable to attend.

As China pushes its ambitious trillion-dollar Belt and Road Initiative, such sweetheart deals can be expected in greater numbers. India’s smaller neighbours are especially vulnerable, but New Delhi can do little as it cannot match Beijing’s largesse. India can indeed partner with other countries like Japan and the US to take up infrastructure projects in these countries. But even so, it is difficult to match Chinese state-controlled firms with excess capacity and a bounty of cash to throw at projects and leaders. It is not, in any case, a replacement for the citizens of the host countries realizing that Chinese money unaccompanied by domestic institutional reforms and local capacity development cannot make them rich. Conversely, it can exacerbate local political economy problems by encouraging venality and corruption.

As economist William Easterly has argued, foreign aid discourages the development of the right market institutions that would be required for higher investment flows unmediated by corrupt political practices. China’s support is not even in the form of aid, but through more distortionary high-interest loans. Often, the labour and the input materials in these projects are also sourced from China. Moreover, the investment flow is dictated by political rather than market choices. The result is a host country saddled with white elephants not generating enough capital to pay back the loans. Sri Lanka has already seen these fears come true.

Other countries too make strategic use of foreign aid. The US, most prominently, deploys aid (goo.gl/MSfeh9) to win votes in the UN. Israel does this (goo.gl/oTzyM2) as well. But the scale at which China is using its capital for securing political influence is unprecedented—and the consequences could be deeply felt across the globe.

Will Chinese loans help poor countries build infrastructure and prosper?

Is China bribing its way to superpower status?

The scale at which China is using its capital for securing political influence is unprecedented
In a throwback to the golden days of the Middle Kingdom when foreign rulers brought with them tributes for the Chinese emperor, French President Emmanuel Macron on his recent visit presented Chinese President Xi Jinping with an eight-year-old gelding. Macron hopes that a charm offensive directed at Xi can help his task of reinvigorating the French economy and industries. Airbus, for instance, is betting its future on large orders from China. The French president has, so far, only offered up a horse and has expressed his admiration for Chinese civilization. David Cameron, the former British prime minister—who was announced last month to be taking over a leadership role in a joint UK-China investment fund—went further.

Before Macron, it was Cameron who championed the rise of China, and closer UK-China and Europe-China ties. Among other deals, Cameron approved massive Chinese investments in a nuclear power project at Hinkley Point in Somerset. Controversial on both security and commercial grounds, the deal was deemed not to be in Britain’s interests by many critics. Theresa May, Cameron’s successor, even shelved the project temporarily after taking charge. So, is there a smoking gun to link the Hinkley Point deal with Cameron’s latest job? Not really. But it was reported (goo.gl/ufg2Zn) that the former British prime minister lobbied for this fund to be set up on behalf of Peter Gummer, an old associate of Cameron and donor of the Conservative Party—enough to raise eyebrows.

As the news of Cameron taking over a fund meant to project Chinese influence across Europe and Asia came out, many were quick to draw parallels with Gerhard Schröder, former German chancellor. After losing his office in 2005, Schröeder bagged a job with Gazprom, the Russian energy giant. During his tenure, Schröder had staunchly backed the contentious Nord Stream pipeline that was a joint project of Gazprom with two German companies.

These instances might be from developed European countries—but leaders of smaller, poorer countries are much more vulnerable to the ambitions of a country with deep pockets like China. After being thrown out of power, leaders in a number of countries have been investigated for accepting bribes from Chinese companies. The former president of Sri Lanka, Mahinda Rajapaksa, has been accused of accepting bribes from China Harbour Engineering Company, a subsidiary of state-owned China Communications Construction Company. Rajapaksa’s tenure saw several high-profile Chinese investments in Sri Lanka. Many of those, including an airport and a seaport in Hambantota—the home base of Rajapaksa—have proven to be commercial non-starters. In Nigeria, just three days before exiting office, former president Goodluck Jonathan approved an out-of-court settlement—now being probed by US agencies—between Addax Petroleum (owned by Chinese oil giant Sinopec) and the Nigerian National Petroleum Corp., saving the former millions of dollars.

In 2012, the husband of former Philippine president Gloria Macapagal-Arroyo was arrested on charges of accepting bribes to push a deal between the Philippine government and the Chinese telecom company ZTE. Mohammad Nasheed, the leader-in-exile of Maldivian opposition, has accused President Abdulla Yameen of corruption in leasing out islands to foreign countries. India, too, was concerned about the Yameen government leasing out the Feydhoo Finolhu island to a Chinese company at a throwaway price without competitive bidding. Known for his proximity to China, Yameen again surprised New Delhi in November last year by passing a free trade agreement with China through the Maldivian parliament in an emergency session called at short notice with most of the opposition members unavailable to attend.

As China pushes its ambitious trillion-dollar Belt and Road Initiative, such sweetheart deals can be expected in greater numbers. India’s smaller neighbours are especially vulnerable, but New Delhi can do little as it cannot match Beijing’s largesse. India can indeed partner with other countries like Japan and the US to take up infrastructure projects in these countries. But even so, it is difficult to match Chinese state-controlled firms with excess capacity and a bounty of cash to throw at projects and leaders. It is not, in any case, a replacement for the citizens of the host countries realizing that Chinese money unaccompanied by domestic institutional reforms and local capacity development cannot make them rich. Conversely, it can exacerbate local political economy problems by encouraging venality and corruption.

As economist William Easterly has argued, foreign aid discourages the development of the right market institutions that would be required for higher investment flows unmediated by corrupt political practices. China’s support is not even in the form of aid, but through more distortionary high-interest loans. Often, the labour and the input materials in these projects are also sourced from China. Moreover, the investment flow is dictated by political rather than market choices. The result is a host country saddled with white elephants not generating enough capital to pay back the loans. Sri Lanka has already seen these fears come true.

Other countries too make strategic use of foreign aid. The US, most prominently, deploys aid (goo.gl/MSfeh9) to win votes in the UN. Israel does this (goo.gl/oTzyM2) as well. But the scale at which China is using its capital for securing political influence is unprecedented—and the consequences could be deeply felt across the globe.

Will Chinese loans help poor countries build infrastructure and prosper?

Is China muddying Brahmaputra waters?

Is China muddying Brahmaputra waters?
It is not China’s water diversions, but intentional flooding or contamination that should be India’s major concer
Sporadic reports on China’s water diversion plans on the Yarlung Tsangpo, the upper stream of the Brahmaputra river, are invariably met with sustained overreactions in India. Late last month, reports of China planning a 1,000km-long tunnel system to divert these waters to arid Xinjiang were followed by thick black soot coming from the Siang tributary of the Brahmaputra. It led to Ninong Ering, member of Parliament (MP) from East Arunachal Pradesh, writing a letter to the prime minister. This was followed by visual, online and print media, as also the MP, doing their bit in highlighting this as yet another example of the dragon’s evil designs. The chief minister of Assam and the Congress state committee took it from there until Union minister Arjun Meghwal clarified that preliminary findings of the Central Water Commission suggested this was caused by the earthquake that hit Tibet on 17 November.

What does this episode tell us?

First and foremost, it takes an MP over a week to make the relevant authorities take notice of the thick black soot in Siang which, of course, continues to destroy the aquatic life, birds, flora and fauna and even the livelihood of thousands in Arunachal Pradesh and Assam as the water remains unusable. Its long-term ecological and environmental impact will also reach lower riparian Bangladesh. Whether its trigger was man-made or natural does not alter the intensity of its impact.

Second, India’s snail-paced response in providing even a preliminary assessment, and inaction in providing relief from this contamination, is now leading to calls for setting up hydrological labs across the region. However, there is not much hope that this will be implemented any time soon. Remember, it’s been decades since India has been unsuccessfully trying to clean the river Ganga. This track record makes pressing all panic buttons our first response to seek attention.

Third, of course, is China’s continued disregard of even agreed norms and the overall tenor of India-China relations, which surely leads policy experts to begin with no less than the worst-case scenario.

Even a cursory check tells us how, despite China having 50% spatial share of this 3,000km-long water system, low precipitation and desert conditions mean that Tibet generates only 25% of its total basin discharge, while India, with 34% of the basin, contributes to 39% of the total discharge. So, it is not China’s water diversions, but intentional flooding or contamination that should be a major concern for India. Is India working on preparing itself to tackle such eventualities?

China has been building at least five hydropower projects in addition to the 510-megawatt one at Zangmu that was commissioned in October 2015. These are claimed to be run-of-the-river projects, but can also facilitate storage if required. Given the seismically sensitive and geologically evolving Himalayas, such storages can unleash man-made or natural disasters. Unlike Tibet, the Indian side has scores of population centres on the banks of these river systems. To recall, the entire debate on India-China ‘water wars’ was triggered in 2000 by the sudden burst of one such dam, causing flash floods that resulted in 25 deaths and damage to property and livestock. This is what perturbed India when China began building its Zangmu hydropower project in 2008 and this high-pitch rhetoric over water continues to linger.

There is no denying that China has been reticent, allowing no more than a snail-paced incremental increase in its cooperation. Starting from their 2002 memorandum of understanding (MoU) for exchange of data on water levels, discharge and rainfall during the monsoon season, China and India had set up an expert-level mechanism for the Brahmaputra and Sutlej rivers in 2006. In their follow-up MoUs of 2013 and 2015, China agreed to supply data between 15 May and 15 October every year, with India agreeing to pay for these services. However, the last meeting of this mechanism was held in April 2016 and India has received no data for this year. First in the name of the Doklam standoff and then on the pretext of ongoing upgrade and renovation of data-collection stations in Tibet, China has refused to share hydrological data with India. But these excuses fall flat as Bangladesh continues to receive the same data.

How can India enhance its leverage against China?

There is a need to refrain from populist high-octane China bashing, which has been counterproductive so far. India must build its own capabilities to redress and withstand such disasters. It is only from such a position of sanity and strength that India can get China to regularize existing mechanisms and expand them beyond just data exchange on water flows, levels, rainfall, etc. These need to expand to cover quality of water and mutual inspections by joint or third-country observers.

The plans for gigantic diversions seem formidable, if not fanciful. These have been floated occasionally over the past two decades but repeatedly faced serious financial and technical impediments. The impact on India, if ever, would depend on factors like wherefrom and how much of Yarlung Tsangpo water can be diverted. Undertaking such a project in the seismically sensitive virgin high Himalayas carries deadly ecological and environmental implications for China. The impact on India would follow later and will be marginal.

Let us be realistic about the UNSC

Let us be realistic about the UNSC
recent victory in the hotly contested election to the International Court of Justice seems to have lifted our spirits as a nation. We are justifiably proud of our success and of the skill and determination with which our diplomacy was deployed. It would be prudent, however, not to interpret this in a way as to raise hopes of a permanent seat in the Security Council.

The UNSC election

The two most prestigious organs of the United Nations are the Security Council and the International Court of Justice. While the Security Council has 15 member states, the ICJ has 15 judges. Election to the UNSC is conducted only in the General Assembly and requires two-thirds majority to get elected. Election to the ICJ is held concurrently in the UNGA and UNSC and requires absolute majority of the total membership in each organ. Veto does not apply for election to the ICJ. India has lost elections to both these organs in the past.

Of the two, the UNSC is by far more important from the national interest point of view. It deals with questions of peace and security as well as terrorism and has developed a tendency to widen its ambit into other fields, including human rights and eventually environment. In addition to the Kashmir issue, which Pakistan forever tries to raise, there are other matters in which India would be interested such as the list of terrorists — Hafeez Saeed for example. Since it is in permanent session, we have to try to be its member as often as possible.

The ICJ is required to represent the principal civilisations and legal systems of the world. The judges sitting on ICJ are expected to act impartially, not as representatives of the countries of their origin. That is why they are nominated, not by their governments but by their national groups in the Permanent Court of Arbitration based in The Hague. To have an Indian judge at the ICJ, when we have an active case on its agenda regarding our national in illegal custody of Pakistan might be of some advantage, though it would be wrong to assume that the final judgment will go in our favour simply because an Indian is on the bench. He will surely act in an objective manner. We will win because we have an excellent legal case and are ably represented by an eminent lawyer.

There are other bodies in the UN that are not as well known but are important enough to be represented on like the ACABQ (Advisory Committee on Administrative and Budgetary Questions) and the Committee on Contributions. The former consists of 16 members elected by the UNGA on the recommendation of the Fifth Committee of the UNGA dealing with the budget of the UN. Usually, the members are officers of the permanent missions serving on the Fifth Committee. Most often, they are of the rank of first secretary or counsellor; Ambassadors rarely offer their candidatures.

The Committee on Contributions recommends the scale of assessments to the budget and the share of each member. This is a very important function, since the share decided by the UNGA applies to all the specialised agencies, etc. Even a 0.1 % change can make a difference of hundreds of thousands of dollars. We have had distinguished persons serving on both these committees, such as G. Parthasarathy, S.K Singh, as well as our current permanent representative, ambassador Syed Akbaruddin. Some stalwarts have also lost these elections. There is also the Human Rights Council; we have had almost continuous representation on it. The U.S. lost the election to it a few years ago; there is widespread resentment against the P-5’s presumption to a permanent seat on all bodies.

The veto question

Primarily at our initiative, the question of Security Council reform, euphemism for expansion, has been under consideration since 1970s. There is near unanimous support for increasing the number of non-permanent seats. The controversial question is about the increase in the category of permanent seats. The rationale for expansion has been accepted in-principle by nearly all, but the difficulty arises when the actual numbers and their rights are discussed.

India, along with Brazil, Germany and Japan, has proposed an increase of six additional permanent seats, the other two being for Africa. The African group is demanding two permanent seats, recognised as reasonable by every member, but there are at least three and perhaps more claimants for the two seats. Then there is the question of the rights of the additional members. The G-4’s initial position was for the same rights as the present permanent members, essentially the veto right. Over the years, they have become more realistic and would be willing to forego the veto right. The firm position of the Africans is that the new members must have the same rights as the existing ones. This is a non-starter.

The larger picture

The P-5 will never agree to give up their veto right, nor will they agree to accord this right to any other country. (France supports veto for additional permanent members.) Also, the general membership of the UN wants to eliminate the existing veto; they will never agree to new veto-wielding powers. Variants of the veto provision have been suggested, such as the requirement of double veto, i.e. at least two permanent members must exercise veto for it to be valid. The P-5 are not willing to dilute their self-acquired right.

Many member-states have been pledging support for our aspiration for permanent membership. This is welcome and should be appreciated; it would come in useful if the question ever comes up for a vote in the UNGA. Several P-5 countries have also announced support. The principal P-5 member opposing us is China. We should not be misled by their ambiguous statements on the subject. It has to be underscored that there is no way that India alone, by itself, can be elected as permanent member. It will have to be a package deal in which the demands of all the geographical groups, including the Latin America and Caribbean group which, like Africa, does not have a single permanent member, will have to be accommodated.

Even if the Americans are sincere in their support for us, they will simply not lobby for India alone; it will be unthinkable for them to try to get India in without at the same time getting Japan also in. It is equally unthinkable, for a long time to come, for China to support Japan’s candidature. The P-5 will play the game among themselves but will stand by one another, as was evident recently at the time of election to the ICJ.

So, we should be realistic. If a permanent seat is not available, there are other proposals on the table. One proposal is for the creation of ‘semi-permanent’ seats, according to which members would be elected for six-eight years and would be eligible for immediate reelection. Given India’s growing prestige and respect, it should not be difficult for us to successfully bid for one of these seats; it might be a better alternative than to unrealistically hope for a permanent seat.

,India wants workable solution on public stockholding for food security at WTO meet

WTO meet in Buenos Aires a litmus test for Suresh Prabhu
Much would depend on how commerce minister Suresh Prabhu forcefully articulates India’s positions during the closed-door meetings in Buenos Aires
Even before it opens on 10 December, the Buenos Aires trade ministerial conference is mired in controversy. More than 60 individuals from 20 non-governmental organizations accredited by the World Trade Organization (WTO) to participate in the meeting have been denied permission to enter Argentina, the land of tango, on security grounds. Deborah James, a well-known and respected activist from Washington which coordinates the civil society network called “Our World Is Not For Sale” asked the WTO director general to urgently remedy the situation by intervening with the Argentinean government to “reverse its decision.” “And if the [Argentinean] government maintains its violation of the host country agreement, to bring this issue immediately to the General Council and reschedule the [MC11 or the 11th ministerial conference] when a proper host can be found,” she wrote to Roberto Azevedo, the WTO director general on 4 December. Clearly, something went wrong between the WTO and the Argentinean government and it is not clear who is to be blamed for this fiasco.

Be that as it may, the Buenos Aires meeting is being held at a particularly difficult period with the multilateral trading system being reduced to tatters. Last Friday, “the Trump administration has pulled out of the United Nations’ ambitious plans to create a more humane global strategy on migration, saying involvement in the process interferes with American sovereignty, and runs counter to US immigration policies,” Partick Wintour, the Guardian’s diplomatic editor, wrote on 3 December. Significantly, the announcement of the US withdrawal from the UN Global Compact came hours before the opening of the UN global conference on migration that began on Monday in Puerto Vallarta, Mexico.

Washington is also adopting intransigent positions on multilateral trade issues scheduled to be discussed in Buenos Aires. It has blocked a ministerial declaration on grounds that it accords primacy to the WTO for global trade liberalization. The US says the trade and development architecture as set out in the founding principles of the WTO must be radically changed so to ensure that India and other developing countries are denied special and differential flexibilities.

More important, a senior US trade official who visited Geneva last month dampened the prospects for credible outcomes in agriculture, including the permanent solution for public stockholding programmes for food security, on grounds that the US grain lobbies will be adversely affected. The US simply wants the Buenos Aires meeting to be a vegetarian roadshow for discussing the institutional reform of the WTO without taking any credible decisions concerning the issues of the Daridra Narayanas, a term coined by Mahatma Gandhi for the wretched of the earth.

Against this backdrop, how the Narendra Modi government is going to press its core developmental concerns at Buenos Aires remains to be seen. The performance of the National Democratic Alliance (NDA) trade ministers over the years at major WTO ministerial summits is somewhat mixed. To start with, in 1999, at the WTO’s third ministerial meeting in Seattle, the first NDA trade minister late Murasoli Maran refused to fall prey to US President Bill Clinton’s pitch for bringing controversial social clauses into global trade. Clinton tried hard to persuade Maran at a luncheon meeting to agree to social clauses such as labour, environment, and other issues into global trading system. Maran simply said No.

Later, the same Maran, in 2001 at the launch of the Doha trade negotiations in Doha, Qatar, almost blocked the meeting on four controversial Singapore issues—trade and investment, trade and competition policy, government procurement, and trade facilitation—on grounds that they are not avowedly part of the WTO agenda. During a telephonic conversation with Prime Minister Atal Bihari Vajpayee to apprise him about the developments when the Doha meeting was almost collapsing, Vajpayee told Maran that he should do what he thinks is right for India. Subsequently, Maran put a tough condition that the four controversial issues will only be negotiated after there is “explicit” consensus among WTO members at the fifth ministerial meeting in September 2003.

After Maran, the next NDA trade minister Arun Shourie, who was there only for few months, took a tough stand on the issue of differentiation among developing countries at an informal mini-ministerial summit in Sydney in December 2002. US trade representative ambassador Robert Zoellick and the European Union trade commissioner Pascal Lamy tried hard to put India and other developing countries like South Korea and Singapore in the category of countries that cannot avail of the flexibilities in the Trade-Related Intellectual Property Rights (TRIPS) agreement for addressing public health emergencies.

The third NDA trade minister Arun Jaitley during the Vajpayee government also took strong nationalist positions at the WTO’s fifth ministerial meeting in Cancun, in 2003. Jaitley formed a formidable alliance with then Malaysian trade minister Rafidah binti Aziz to oppose the four Singapore issues at Cancun. Many developing countries rallied behind Aziz-Jaitley leadership to ensure that the four issues were kept out of the agenda. Thus, the first three NDA trade ministers worked with Prime Minister Vajpayee who gave them a free hand to decide issues as they deemed fit.

The fourth NDA trade minister Nirmala Sitharaman under Prime Minister Narendra Modi led the Indian delegation at the WTO’s 10th ministerial conference in December 2015. Sitharaman, for inexplicable reasons, allowed India’s core demands—on the permanent solution for public stockholding programmes for food security, the special safeguard mechanism for addressing unforeseen surges in imports, and the continuation of the Doha Development Agenda negotiations among others—to be eclipsed at the Nairobi meeting. She allowed the cotton subsidies for poor Indian farmers to be discontinued from this year.

The fifth and current trade minister Suresh Prabhu comes to Buenos Aires when India’s unresolved issues, including the permanent solution with legal certainty and other issues, remains to be addressed. Fortunately for Prabhu, India has built solid support among a large majority of developing and poorest countries in Geneva for rallying behind New Delhi’s core concerns to be finalized at Buenos Aires.

India has ensured support from 100 countries to oppose the new issues that include a new mandate for electronic commerce, investment facilitation and disciplines for micro, small and medium enterprises. In a way, the battle lines are drawn for the Buenos Aires meeting: between the new issues brought by the European Union with some 50 countries on the one side, and India and 100 developing and poorest countries on the other who are calling for resolving the unfinished bread-and-butter issues in the Doha work program.

But much would depend on how Prabhu forcefully articulates India’s positions during the closed-door meetings where ministers need total concentration and tenacity. It is also a litmus test for Prabhu as to how he harnesses the support of other developing countries for addressing the challenges facing more than 400 million Indian farmers at Buenos Aires

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India wants workable solution on public stockholding for food security at WTO meet

India has made it very clear that it will not accept an inferior permanent solution at WTO’s MC11 on public stockholding for food security purposes, says commerce ministry
India will not accept an inferior permanent solution on public stockholding for food security purposes at the Buenos Aires ministerial conference (MC11) of the World Trade Organisation (WTO), Indian commerce ministry officials said on Saturday.

“Though India considers a permanent solution on public stockholding for food security purposes to be most mature for harvesting at MC11 because of a clear mandate from Bali and Nairobi, we are very clear that we will not accept an inferior permanent solution. It has to be an improvement over the peace clause and it has to be workable,” the official added, ahead of the MC11 to be held between 10-13 December at the Argentinean capital city.

Under the WTO rules, developing countries such as India need to limit their public procurement of foodgrains such as wheat and rice to within 10% of the value of the crop. After India enacted the National Food Security Act, 2013, which aimed to provide subsidized foodgrains to approximately two-thirds of its 1.3 billion population, the demand for public procurement increased significantly.

At the Bali ministerial conference in December 2013, India secured a so-called “peace clause”. Under it, if India breaches the 10% limit, other member countries will not take legal action under the WTO dispute settlement mechanism. However, there was confusion over whether the temporary reprieve would continue after four years.

The Narendra Modi government after coming to power in 2014 forced developed countries to clarify that the peace clause will continue indefinitely if a permanent solution on the matter cannot be found by MC11.

However, public procurement for any new food programme of the government for food security purposes will not benefit from the indefinite peace clause as the concession is limited to the programmes running in 2013, at the time of the Bali conference. The concession also comes with onerous notification obligations about farm subsidies provided in the previous year. So far only eight countries out of 184 WTO members have notified their farm subsidies till the last year.

While India considers it has covered most of the staple foods under the food security programme and the restrictions on new food programmes will not impact us, the onerous notification conditions make the peace clause unimplementable for India. However, the restrictions on new food programmes is likely to impact other developing countries like Kenya, Zimbabwe and China and India has promised to fight for deletion of the condition.

India also is of the view that elimination of fisheries subsidies which was considered a deliverable may be postponed to the next ministerial with a work programme since there is lack of consensus on how to handle issues such as differential treatment for the resource-poor fishermen in developing countries like India.

India along with China is also seeking a work programme for elimination of trade distorting agriculture subsidies provided by developed countries known as aggregate measurement of support which is not available to developing countries.

On the proposal of setting global e-commerce rules, India is of the view that discussions should continue at various working groups and when discussions mature to a certain level they can be taken up by the general council of the WTO for further action. However, developed countries are pushing for accelerated work programme on e-commerce to be finalized at MC11 while China wants discussions on e-commerce to happen in a single body instead of the various working groups going on at present.

India also sought more transparency in negotiations and has opposed attempts to take decisions in small groups at the MC11 drawing from its sour experience from the Nairobi ministerial in 2015.

Inequality in the 21st century

Inequality in the 21st century
It is time for a radical change, one that replaces traditional anti-monopoly laws with legislation mandating a wider dispersal of shareholding within each company
At the end of a low and dishonest year, reminiscent of the “low, dishonest decade” about which W.H. Auden wrote in his poem September 1, 1939, the world’s “clever hopes” are giving way to recognition that many severe problems must be tackled. And, among the severest, with the gravest long-term and even existential implications, is economic inequality.

The alarming level of economic inequality globally has been well documented by prominent economists, including Thomas Piketty, François Bourguignon, Branko Milanović and Joseph E. Stiglitz, and well-known institutions, including Oxfam and the World Bank. And it is obvious even from a casual stroll through the streets of New York, New Delhi, Beijing or Berlin.

Voices on the right often claim that this inequality is not only justifiable, but also appropriate: Wealth is a just reward for hard work, while poverty is an earned punishment for laziness. This is a myth. The reality is that the poor, more often than not, must work extremely hard, often in difficult conditions, just to survive.

Moreover, if a wealthy person does have a particularly strong work ethic, it is likely attributable not just to their genetic predisposition, but also to their upbringing, including whatever privileges, values and opportunities their background may have afforded them. So there is no real moral argument for outsize wealth amid widespread poverty.

This is not to say that there is no justification for any amount of inequality. After all, inequality can reflect differences in preferences: Some people might consider the pursuit of material wealth more worthwhile than others. Moreover, differential rewards do indeed create incentives for people to learn, work and innovate, activities that promote overall growth and advance poverty reduction.

But, at a certain point, inequality becomes so severe that it has the opposite effect. And we are far beyond that point.

Plenty of people—including many of the world’s wealthy—recognize how unacceptable severe inequality is, both morally and economically. But if the rich speak out against it, they are often shut down and labelled hypocrites. Apparently, the desire to lessen inequality can be considered credible or genuine only by first sacrificing one’s own wealth.

The truth, of course, is that the decision not to renounce, unilaterally, one’s wealth does not discredit a preference for a more equitable society. To label a wealthy critic of extreme inequality a hypocrite amounts to an ad hominem attack and a logical fallacy, intended to silence those whose voices could make a difference.

Fortunately, this tactic seems to be losing some of its potency. It is heartening to see wealthy individuals defying these attacks, not only by openly acknowledging the economic and social damage caused by extreme inequality, but also by criticizing a system that, despite enabling them to prosper, has left too many without opportunities.

In particular, some wealthy Americans are condemning the current tax legislation being pushed by Congressional Republicans and President Donald Trump’s administration, which offers outsize cuts to the highest earners—people like them. As Jack Bogle, the founder of Vanguard Group and a certain beneficiary of the proposed cuts, put it, the plan—which is all but guaranteed to exacerbate inequality—is a “moral abomination”.

Yet, recognizing the flaws in current structures is just the beginning. The greater challenge is to create a viable blueprint for an equitable society. (It is the absence of such a blueprint that has led so many well-meaning movements in history to end in failure.) In this case, the focus must be on expanding profit-sharing arrangements, without stifling or centralizing market incentives that are crucial to drive growth.

A first step would be to give all of a country’s residents the right to a certain share of the economy’s profits. This idea has been advanced in various forms by Marty Weitzman, Hillel Steiner, Richard Freeman, and, just last month, Matt Bruenig. But it is particularly vital today, as the share of wages in national income declines, and the share of profits and rents rises—a trend that technological progress is accelerating.

There is another dimension to profit-sharing that has received little attention, related to monopolies and competition. With modern digital technology, the returns to scale are so large that it no longer makes sense to demand that, say, 1,000 firms produce versions of the same good, each meeting one-thousandth of total demand. A more efficient approach would have 1,000 firms each creating one part of that good. So, when it comes to automobiles, for example, one firm would produce all the gears, another all the brake pads, and so on.

Traditional antitrust and pro-competition legislation—which began in 1890 with the Sherman Act in the US—prevents such an efficient system from taking hold. But a monopoly of production need not mean a monopoly of income, as long as the shares in each company are widely held. It is thus time for a radical change, one that replaces traditional anti-monopoly laws with legislation mandating a wider dispersal of shareholding within each company.

These ideas are largely untested, so much work would need to be done before they could be made operational. But as the world lurches from one crisis to another, and inequality continues to deepen, we do not have the luxury of sticking to the status quo. Unless we confront the inequality challenge head on, social cohesion and democracy itself will come under growing threat. ©2017/Project Syndicate

The rise and fall of the WTO

The rise and fall of the WTO
As the U.S. loses interest in multilateralism in trade, India should actively try to arrest the organisation’s slide
Less than 25 years after the World Trade Organisation (WTO) was created, its future as a body overseeing multilateral trade rules is in doubt. The failure of the recent ministerial meeting at Buenos Aires is only symptomatic of a decline in its importance.

Too ambitious?

When the WTO was born in 1995, replacing the General Agreement on Tariffs and Trade (GATT), it was given a large remit overseeing the rules for world trade. It was also given powers to punish countries which violated these rules. Yet, in what must be an unusual development in the history of international institutions, the WTO has been felled by the weight of the extraordinary ambitions placed on it. As a consequence, since the late 2000s, the organisation has been unable to carry out its basic task of overseeing a successful conduct of multilateral trade negotiations. The rise and decline has happened quickly.

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WTO: nations arrive at a crossroads

In the early 1990s, global corporations pushed the major trading powers of the time — the U.S., the European Union (EU), Japan and Canada — for a GATT agreement that would vastly increase access for their products in foreign markets. They succeeded with the 1994 Marrakesh agreement which was supposed to be a grand bargain. The “farm subsidisers” of the U.S. and EU agreed to bring agriculture under GATT rules. In exchange, the developing countries had to pay up front by reducing import duties on manufacture, opening their markets to services, and agreeing to strict protection of intellectual property rights. The Marrakesh agreement also created the new Dispute Settlement Body (DSB) to adjudicate on trade disputes. All this would be overseen by the new WTO.

Under the DSB, the decision of a WTO panel could be rejected only by “a negative consensus” (i.e. all member-countries present had to turn down the ruling). A final verdict in favour of a complainant country entitled it to impose penalties on the other country. And under the principle of cross-retaliation, these penalties, when authorised, could be imposed on exports from a sector different from where the dispute was located. This hurt the smaller countries and was to the advantage of the bigger ones.

The new ability of the DSB to enforce decisions seemed too good to not take advantage of. For a brief while in the mid/late 1990s, the WTO seemed to be just the kind of “super” international organisation that the major powers wanted. If all trade and non-trade issues could be brought under one body which had the powers necessary for enforcement, there would be no place to hide for any country. There was pressure to bring many more “new” non-trade issues under the WTO. If the U.S. wanted labour and environment standards included, the EU wanted foreign investment, competition and government procurement.

Over-reach, however, sometimes can have the opposite of the intended outcomes.

The developing countries, which had realised that they had been in the Marrakesh agreement, were far more active in the WTO from the late 1990s. Through a combination of the formation of strategic alliances and simply refusing to say “yes”, they began to win some battles.

The China factor

The entry of China into the WTO in 2001 also changed the picture. China used its newly acquired ‘most favoured nation’ status to the hilt. It expanded exports manifold to the EU and the U.S. Indeed, an influential body of opinion holds China’s export success as responsible for the hollowing out of U.S. manufacturing.

On its part, the U.S. soon realised that it was not the master of all it surveyed. Conflicts with the EU, a DSB that did not always oblige, and the more assertive developing country bloc (for a while led by Brazil and India) saw the hopes for a “super” WTO gradually evaporate.

Still, in 2001, Brussels allied with Washington to successfully push for fresh trade negotiations even before the 1994 agreement had been digested. A new round with the Doha Development Agenda (DDA), covering old and new issues, was launched in the Qatar capital in 2001. However, by refusing to make any honest concessions over the years, the U.S., aided by a willing WTO secretariat, more or less killed the DDA in the late 2000s. This intransigence showed that the WTO and its major member-countries remained as insensitive as before to the concerns of the majority of the membership. The U.S. and EU have since even sought to formally scrap the DDA.

The major powers now cherry-pick trade issues. Thus, in 2014, trade facilitation (covering customs rules and procedures) was taken out of the DDA and a stand-alone agreement was signed, because the U.S. and the EU were interested in it. This virtually destroyed the principle of reciprocity under which each country wanting to obtain gains in specific areas makes concessions in others.

On the whole, the U.S. and the EU have been losing interest in multilateralism in trade. The U.S. has even begun to undermine the very elements of the WTO that it had pushed through in the early 1990s. It now refuses to implement some DSB decisions. Most recently, it has taken decisions on DSB appointments which will in effect bring adjudication to a halt.

This does not mean major powers have no use for the WTO. They may no longer see any value in it as a forum for multilateral trade agreements, but they now use it to push for stand-alone deals as well as plurilateral deals (agreements involving a few and not all members of the WTO). At Buenos Aires, proposals were made for the WTO to take up “new issues” such as e-commerce, investment facilitation and trade and gender. These are all outside the DDA and of interest only to a select membership.

Need for multilateralism

No one should be happy about the turn of events. All countries need mutually agreed discipline on market access, customs duties, etc. Regionalism cannot be an alternative. Regional trade groups have succeeded in some places and they have not elsewhere. India’s own experience with bilateral trade agreements has not always been good. Bilateral and regional treaties also open the door to the stricter “WTO plus” conditions in select areas like patents.

The world therefore benefits from a multilateral trade body – though a fairer one than the WTO of the 1990s. To give just one example, India is on a better wicket with its food procurement and public stock holding policies protected within the WTO than with having to negotiate separate deals with major farm exporters like the U.S., Canada, Australia and Brazil. Still, one cannot take multilateralism in trade for granted. At the extreme, one cannot rule out a collapse of the WTO engineered by the Trump administration. The consequences are unimaginable even if they do not lead to trade wars as happened in the 1930s.

India should be more actively engaged in how to arrest the slide and then make the WTO a more equitable organisation. Commerce Minister Suresh Prabhu has said that India will soon convene a mini ministerial to discuss “new issues” for the WTO. Such fancy talk will not get us anywhere. India needs to work on persuading all members of the WTO to return to the table and negotiate on bread-and-butter issues like agriculture, industrial tariffs, and services. At this point, India and most of the world have everything to lose and nothing to gain from first a hollowing out and then a selective use of the WTO.