Volume 20, Number 1 Article by Sasidaran G March, 2008
The WTO – A Discordant Orchestra : By T K Bhaumik, Sage, 2007, pp 249, Price: Rs 320. :
Today as we witness countries increasingly opting for global integration, with trade in goods and services breaking down protectionist walls, a multilateral institution like the World Trade Organisation (WTO) assumes immense significance in ensuring a harmonious and equitable global trading order. The chequered history of the new international trade regulatory authority could be seen as a logical development flowing from the General Agreement on Trade and Tariff (GATT) and the subsequent negotiations on services and intellectual property rights. Thus, if one were to put in a nutshell what the WTO is all about, one could perhaps say that ‘WTO = GATT + GATS + TRIPs’. But as T K Bhaumik’s The WTO – A Discordant Orchestra highlights, things may not be that simple. There is a lot more going on in the endless rounds of discussions aimed at making the international trade not only free but also fair.
This book is a useful recapitulation of all the interesting events and developments that the world has witnessed on the trade front since the establishment of the GATT back in 1948 until it was replaced by the WTO. Bhaumik explains highly complex issues in uncluttered non-technical jargon, ensuring that his book is useful for the lay reader and not just for academia. This book is likely to be of interest to readers in developing countries given its lively account of the differences between the developed and developing countries, and where the latter stand in the WTO context. An air of scepticism pervades the entire book as Bhaumik tries to grapple with the ‘discordant notes struck by the heterogeneous clusters of the WTO member countries’.
Although the author acknowledges the emergence of developing countries as significant partners in the WTO negotiations, and as players with growing bargaining strength, he nevertheless contends that the ‘South’ block is fighting a losing battle. As the author succinctly puts it: ‘In the WTO, it has always been a few countries that act as troublemakers and create deadlocks in negotiations and it is always that very same group that untangles the deadlock. It is they who create the crisis and only they know how to resolve it. It is they who delay the negotiations with hard political posturings, making others suffer in the process.’
Bhaumik gives an interesting overview of behind-the-scenes developments such as those seen in April 1999, when the successor to the then director general of the WTO had to be found. The choice was narrowed from the initial four candidates to two — a former prime minister of New Zealand and a former deputy prime minister of Thailand. What should have been a matter of simple consensus escalated into a state of crisis and a prolonged deadlock ensued, leading to much acrimony. Finally a compromise brokered by Australia and Bangladesh broke the deadlock and the term of the office of the director general was divided into three years each for both. Bhaumik notes that this long drawn impasse was the backdrop to the preparation for the third ministerial conference. Inevitably, the ministerials that followed this logjam became caught up in innumerable controversies, resulting in the current stalemate in the WTO negotiations and a failure to achieve consensus on the major issues, and undermining the credibility of the WTO system.
With the outcome of the Hong Kong ministerial not yielding the expected ‘substantial benefits’ to the ‘South’ block, the author’s contentions seem to be vindicated. As the author rightly notes, on the agriculture front, the major issue of reduction of trade-distorting domestic subsidies, on which the EU spends $55 billion every year, remained unresolved. Also on Non-Agricultural Market Access (NAMA) and Services, the ‘North’ managed to extract significant concessions from the larger developing countries ‘in return for a minor concession’. The ‘South’, thus confronted with the ‘imbalances’ of the Uruguay Round coupled with the newly generated ‘imbalances’ of the Doha round have enough reasons to feel left out in this exercise supposedly initiated to accommodate their interests. One would have no reservations in endorsing Bhaumik’s contention that the WTO today is likely to remain where it was back in 1995.
There are, however, some areas where Bhaumik could have provided more supportive analysis of issues, such as the debate on TRIPs and public health, which has been the source of a major North-South conflict, stalling the progress of the Doha round of negotiations. It is well known how the lobbying power and the vested interests of the multinational pharmaceutical companies in the West prevailed over the welfare interests of the developing nations in successive negotiations raising questions on the credibility of the WTO as a platform to protect the interests of poor countries. While Bhaumik has definitely highlighted the crux of the issue, outlining the key decisions of the successive declarations regarding TRIPs and Public Health, the analysis could have looked further at the implications of these developments for North-South relations and the future of the WTO. A discussion of some of the experiences of the least developed countries in Africa or Asia, for example, on the public health front (e g, AIDS), would have lent greater clarity to the issue.
Overall, this book makes for an interesting account of the political economy that drives institutions like the WTO. As the book makes evident, in today’s rapidly globalising world, if there has been one institution to date that has emerged as a most powerful multilateral institution but which still opens windows for developing nations, it is indisputably the WTO. However, it would be naïve to imagine a conflict-free WTO, and the author places his faith in ‘political commitment’ which, according to him, will be the single most important determinant of the success of the WTO. One cannot agree more with him.
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