December 04, 2017

Suresh Prabhu’s Buenos Aires Tango

Resident Senior Fellow, Vivek Dehejia, advises how India should tackle the upcoming Eleventh Ministerial Conference (MC11) of the World Trade Organization (WTO), due to take place in Buenos Aires, Argentina, in this Livemint article. Excerpts below: 


"The stakes for India are high. As an emerging power which is a spoke rather than a hub of overlapping preferential bilateral and plurilateral trade deals, India does not have the economic clout of China to go toe-to-toe with the US, and benefits enormously from the rules-based, consensus-driven approach of the WTO...


To his credit, Suresh Prabhu, the new Union minister of commerce and industry, has been making all the right noises in the lead-up to MC11—striking a note of pragmatism and moderating expectations, while at the same time insisting that India will pursue its national economic interest and draw red lines where necessary. This tempered rhetoric—we will have to wait and see if it is matched by reality—is a refreshing contrast to the somewhat more dogmatic and less agile tone struck by his predecessor in the role, Nirmala Sitharaman.


Prabhu’s work in Buenos Aires is cut out for him. As reported in this newspaper on 25 November, the US apparently blocked attempts to agree on a draft ministerial declaration for MC11 which would have reaffirmed the centrality of the WTO in global trade liberalization as well as blocking reference to the Doha Development Agenda as a central goal of the WTO. There is, thus, a real possibility that the US will play spoiler and block any sort of meaningful ministerial declaration as the MC11 negotiations play out.


India’s best hope is that we can forge common cause with other emerging powers, possibly including China, who share a stake in the preservation, if not the enhancement, of the rules-based multilateral trade regime. Other potential allies are traditional “middle powers”, such as Canada, Australia, and a clutch of European countries, all of whom are highly open economies with a great deal to lose if multilateralism falters...


Crucially, India must at all costs avoid the temptation to showboat, and attempt to score rhetorical points at the expense of the US and other advanced economies and as the self-anointed putative champion of the developing world, which seems to be our default shtick at major international gatherings. Of all recent commerce ministers, the mild-mannered but steely Suresh Prabhu seems best poised to do just this."


Read the full article here

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