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India slams "Trojan Horse" protectionism

BANGKOK: India's commerce and industry minister, attacking what he called a rising tide of protectionism in the West, told rich countries on Monday to forget the idea of linking labour standards to a new round of world trade talks.

In an interview with Reuters, Murasoli Maran accused the United States and the European Union of wanting to erect new barriers to developing countries' exports by forcing them to meet Western standards in a range of non-trade areas.

"I see protectionist pressures are increasing in the industrialised world. That is why they are bringing in Trojan horses with non-trade issues like labour and the environment to hide that protectionism," Maran said on the sidelines of a summit of the U.N. trade and development agency, UNCTAD.

Maran is one of dozens of trade ministers in Bangkok trying to repair the damage from the failure of World Trade Organisation countries in Seattle in December to agree the agenda for a new round of trade liberalisation negotiations.

He said he could not predict when the time would be ripe for the talks to get under way.

But an agenda that dealt only with trade in agricultural products and services, as well as unfinished business from the 1986-1993 Uruguay Round of talks, would have a better chance of succeeding.

"Let's remove the controversial issues from the table, then we can find an easy solution," Maran said.

"The process should be renewed as early as possible, and what I'm suggesting is one of the simple ways to renew the process so we can meet as early as possible."

The United States and the European Union, by contrast, want a broader agenda to give negotiators more scope for trade-offs.

BACKDOOR PROTECTIONISM

However, their wish to enshrine core labour and environmental rights is anathema to developing nations, who see it as backdoor protectionism aimed at making their exports uncompetitive by imposing inappropriate rich-country standards on them.

"Our view is that the WTO's remit should be restricted to trade issues and trade issues alone," Maran said. "There are specialised U.N. organisations to take care of those problems."

He said developing countries already felt they were victims of global trading rules, bearing the brunt for example of a rash of anti-dumping duties imposed by Europe and the United States against exporters deemed to be selling goods below cost.

"Countries like India feel that the present WTO system is like a one-way street: from the North you can get easy entry, from the South there are a lot of roadblocks."

India wants anti-dumping rules to be overhauled as part of the trade round but opposes the inclusion of a multilateral code on investment.

India was opening up its economy to foreign direct investment (FDI) because it was in its national interest to do so. But why should signing an international agreement trigger a flood of FDI, Maran asked.

"OK, I will sign it on the dotted line, but can you guarantee me $10 billion a year?

"We are opening up on our own, because we calculate that the economy can absorb very easily $10 billion of FDI per year. We are seeing the benefits that FDI will bring in -- along with the capital stock, new technologies, new marketing practices, new organisational systems and, most importantly, jobs.

"So why don't you leave it to the countries' national governments? Why are you interfering in sovereign decisions? -Reuters