Press Information Bureau

Government of India

Ministry of Commerce & Industry

20-April-2012 12:37 IST

Centrality of Development Agenda Should be Maintained, Anand Sharma Tells G-20. Warns Against ‘Closed Club’ Agreement on Services

The Union Minister of Commerce, Industry and Textiles, Shri Anand Sharma has stressed that the Doha round for the first time recognized the centrality of the development agenda. “Only such a narrative will have global resonance and global appeal. We must strive to create a level playing field before we ask all to compete as equals. There is a need to fulfil the promises made in the past, implement decisions taken over years and remain faithful to the mandate of the Doha Development Round. Only then, I believe, will emerge a new narrative on trade – that would position trade as a function of economic growth and not the other way round,” said the Minister while intervening at the session on "understanding global value chains: towards a new trade narrative" at G20 Trade Ministers’ Meeting at Puerto Vallarta, Mexico late last night.

Shri Sharma also warned against any attempt to selectively open up certain services sectors or to negotiate a ‘closed club’ agreement. “This would not only upset the delicate balance of the Doha Round but would also undermine the WTO.” Plurilateral agreements within the framework of a multilateral agreement such as the WTO are inherently discriminatory as the benefits of this Agreement will not be ‘MFNised’ to other WTO member countries but will be restricted to the participating countries only. At the WTO every outcome of the negotiations on trade facilitation and services or for that matter NAMA and Agriculture represents a thoroughly negotiated trade-off. A selective approach that cherry picks a few items, from even within a specific area for expedited decisions is bound to not only upset the balance but may also result in jeopardizing the entire negotiating process. India has specific interests in the Services Agreement. However, the current proposals that relate to Services do not seem to address the core issues that concern the movement of natural persons. Their mobility is severely restricted due to visas, entry procedures, and lack of mutual recognition of qualifications among other impediments.

The Minister expressed concern over the fact that “labour largely remains hemmed in by the national boundaries” while capital finance and technologies are able to flow freely across the borders. “They remain engaged in the value chains only as long as the wages are low and present a comparative advantage and this is a harsh reality which we cannot ignore” added Shri Sharma.

Speaking on the emergence of trans-national corporations and their consolidation across the world, Shri Sharma said “The growth in manufacturing is a key political consideration for countries across the world as manufacturing alone holds the potential of absorbing millions of people who are joining the workforce. As democratically elected leaders we remain conscious of our responsibilities in this regard. So even as we endeavour to integrate ourselves with global value chains, each of us would aspire to move up the value chain and not remain confined to lower rungs in value added manufacturing”.

On Trade facilitation Shri Sharma said that with the lowering of tariffs and removal of quantitative restrictions, the focus is now shifting towards simplification of trade procedures in general and customs procedures in particular.

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DS/GK

Centrality of development agenda must be preserved; avoid closed-club services pacts that undermine multilateral trade rules. The note stresses maintaining the centrality of the development agenda in trade talks, warns that plurilateral or 'closed club' services agreements are discriminatory because they bypass MFN extension, and cautions that selective liberalization would upset negotiated balances. It highlights operative concerns about restrictions on the movement of natural persons-visas, entry procedures, and lack of mutual recognition of qualifications-and links these to labour mobility, the need to upgrade positions in global value chains, and a growing focus on trade facilitation and customs simplification.