The WTO deadlocked: understanding the dynamics of international trade.

Chawla, K.L.

The WTO Deadlocked: Understanding the Dynamics of International Trade, Debashis Chakraborty and Amir Ullah Khan, Sage Publications India Pvt. Ltd., New Delhi, 2008, Pages 327, Price Rs. 650.

The book under review is very apt in the present context as there is already a dead lock between Developed and Developing countries on certain issues under the multilateral trading system. The major contentious issues between these two groups of countries are NAMA, Agricultural subsidies, IPR, etc where there is no consensus with the result, since Doha WTO meet, no concrete results are visible and hence dead lock. In such a surcharge atmosphere the book under review is more timely and raises certain issues which are needed to address failing which the very fragile international trading system will crumble and serve no purpose to the entire human mankind.

The book is divided into eleven chapters ranging from India and WTO: The increasing Participation at the Multilateral Level in chapter-1 to Looking beyond Hong-Kong: What next for India which is covered in chapter eleven being the last chapter of the book. It is really a very vide range which covered almost the entire spectrum of WTO since its inception from Jan., 1995 till today. The authors have also made sincere efforts to cover other areas as well, such as Agreement on Agriculture (AOA), NAMA, Trade in Textiles, Anti-Dumping Laws, IPR, Trade in services to name few in the subsequent chapters. The authors have reviewed various concerns on these issues and also looked into not only the Indian experience but also serious concerns of India on these issues.

In chapter nine the authors have analysed systematically the emergence of various regional trading arrangements which has emerged in every corner of the world and it is still going on. Though there is provision in the charter of WTO under Article XXIV which clearly states that the purpose of RTAs is to facilitate trade between constituent territories and not to raise barriers on other countries. However, the experience of these RTAs is not very encouraging one as this has led to more discrimination among the members countries with in the group as well as with nonmembers countries who are facing more problems to deal with any RTA in a particular region, be it a NAFTA or SAARC to name just two. India has also adopted the route of Free Trading Agreements (FTAs) to not only focus on freeing trade in merchandised products but also on trade in services as well as investment measures, building transport linkages in order to facilitate trade (for example BIMST-EC) and ensuring energy security (like GCC) are among the other major motives behind the focus on regionalism. Here I don't agree with the authors where they come with this fact that " till the WTO negotiations are completed, RTAs would supplement and complement the multilateral trading order and there is a need to use them to the country's advantage" (p.165). However, in my opinion this is other way round as most of these RTAs are using an arm twisting tool in their hands to deal with non-members countries or less developed country with in the group. India is also facing lot of problem while dealing with the issue of Rules of Origin (ROO) clause with the partners. There are various criteria for determining the ROO where most of the members countries who are dealing with India have problems, such as ASEAN. In such a scenario India should move very cautiously to benefit from these FTAs which India has initiated recently.

Though an efficient Dispute Settlement Mechanism (DSM) to resolve the dispute among members countries, which was one of the drawbacks of the erstwhile GATT framework, has been incorporated under WTO system. However, its commitment to comply with is a big question mark where the members countries quite often either violate the rules or misinterpret as per their conveniences, with the result the faith of the members in the multilateral system is eroded over a period of time. It has been observed from the cases lodged at the Dispute Settlement Body (DSB) so far that developed and developing countries have used this facility quite extensively (Table-10.1, p.174). All these aspects are dealt with by the authors in chapter ten. However in my opinion the major discontent over DSM is its functioning which has often been questioned by the majority of the developing countries over the sincerity and commitment on the part of certain powerful members who quite often do not honour their commitment and on the other hand they expect from less developed countries to fulfill all their commitment with the result there is always a doubt in the mind of these developing countries on the efficacy of this mechanism to deal with any of the issue which come for discussion in a non-discriminately manner. Though the authors have tried to take up certain issues, certain case studies should have been incorporated to make it more effective DSM.

In the last chapter, the authors have tried to look beyond Hong Kong which is also a big concern for India. However certain questions are still unanswered. To name few:

How future negotiations will take place on certain contentious issues and what shape it will take? What shall be the role of all these stake holders such as G-6, G-20, G-33, G-90 and how will they react to without ignoring their own interests?

What are the chances of the success of agricultural negotiation as well as other areas for example NAMA or services?

On these issues certain guidelines should have been suggested by the authors which will go a long way. This is a very good book for those who are having a keen interest in WTO studies and I must complement the authors for their sincere efforts.

Dr. K.L. Chawla

Senior Professor, Economics & Business Policy

FORE School of Management, Delhi