TRAINING CUM ADVOCACY WORKSHOP INTERNATIONAL TRADE AND NATIONAL DEVELOPMENT STRATEGY

1. TRAINING CUM ADVOCACY WORKSHOPINTERNATIONAL TRADE AND NATIONAL DEVELOPMENT STRATEGY Experiences Relating to Public Administration in International Trade 24 April 2008 By Atul Kaushik Adviser (Projects) CUTS International Jaipur

2. A BRIEF HISTORY OF TRADE • India’s share in global international trade (imports and exports) at the time of independence was more than twice the present share • Planned Economic Development in the first three decades after independence, followed by the import substitution policies in the fifth decade, saw a decline in India’s share • The economic reforms following the balance of payment crisis in early nineties saw a shift to ‘export-led’ growth paradigm • Deeper reforms in the current decade have resulted in India getting better integrated into the global economy

3. A BRIEF HISTORY OF PUBLIC ADMINISTRATION IN INTERNATIONAL TRADE • Ministry of Commerce and Industry responsible for international trade since independence • Ministry of External Affairs gets involved where India’s strategic or political interests are an issue • India a founding member of the GATT, since 1948 • Ministry of Commerce and Industry seldom involved any other government agency in international trade negotiations until 1986 • Department of Revenue involved first, given the importance of tariff negotiations, in 1979 briefly and 1989 onwards fully • Department of Industry (for IPRs) and Ministry of Agriculture (for agriculture reforms) got involved in 1990s

4. Relevance of international trade to other government agencies • Trade reforms at the global level basically meant bringing down customs tariffs • India having a large domestic market, and export being a non-priority issue for businesses, tariff reforms affected only importers of goods not manufactured domestically; for that also, there was a complicated license-quota raj • Pressure on India to bind tariffs and to align with the other GATT members on issues like trade remedies brought GATT to the notice of businesses • Civil Society got involved only with the negotiations on the TRIPS Agreement in the Uruguay Round, around 1991 • Hence, agencies other than Commerce not affected

5. Emergence of the Need for Public Administration Reforms • Signing of the Uruguay Round Agreements by India (1994) and creation of the WTO (1995) brought in much more intrusive disciplines on the domestic market rules as well • Opening up of the economy around the same time (1991-92) resulted in interest of businesses in exports and imports required for export production • By 1995, every one (other Ministries, industry, businesses, civil society) wanted to know what this WTO is, what it means for them, and what has the government signed on their behalf

6. THE REFORMS -I • The first problem faced by the Department of Commerce (DOC) was to bring other departments on board in respect of rules and disciplines in the WTO agreements • Small inter-ministerial groups created, elaborate papers explaining the WTO agreements made, Committee of Secretaries and a Cabinet Committee set up exclusively for WTO Issues • Officials of other Ministries sent to Geneva (WTO headquarters) to see for themselves the importance of the multilateral trading system • Trade Policy Division of DOC became more transparent, less secretive and more forthcoming in sharing trade experiences and knowledge with other officials

7. THE REFORMS-II • The second problem faced by DOC was how to bring the industry and businesses on board • In 1996-98, numerous workshops and closed door meetings held with industry associations (FICCI, CII, ASSOCHAM, PHDCCI) to explain WTO to them • Export related industry associations (EPCs, FIEO, Commodity Boards etc.) roped in to bring out benefits of trade disciplines

8. REFORMS III • Finally, DOC went into an exercise to legitimize WTO disciplines amongst the larger set of stakeholders • An International Trade Advisory Committee set up with the Minister as the chair and having as members respected experts from the industry, research institutes, Universities, senior retired bureaucrats, civil society (CUTS is a member) and other related Ministries/Departments • Consultative Groups involving related Ministries/Departments, researchers, civil society etc. constituted for specific issues like IPRs, trade and environment, market access etc.

9. REFORMS IV • All these efforts required increase in staff • Trade Policy Division (TPD) of DOC strength increased 4 times • Strength of the Indian Mission to the WTO increased 3 times • WTO Cells created in major Ministries (Finance, Agriculture, MSME etc.) • Similar cells created hy industry associations like CII, ASSOCHAM

10. RESULTS FOR PUBLIC ADMISTRATION • All proposals made in the WTO first brought to the International Trade Advisory Committee, and if desired, in the Consultative Groups, so that their feedback can improve the proposals • Any issue that may involve the industry first discussed with the industry associations • Any issue involving other Ministries/Departments discussed with them before submission to the WTO • COS, Cabinet Committee on WTO Affairs used to get all proposals approved by the entire government • TPD officials dealing with WTO issues feel more confidant and better informed of the stakeholders’ views

11. LESSONS • The period from 1995 to 1999 was very difficult for DOC as they had to bring on board a panoply of stakeholders that felt left out during the Uruguay Round negotiations • The elaborate transparency and capacity building exercises undertaken in that period have brought a feeling of belonging to a larger number of stakeholders • Transparency (to the extent that it does not harm negotiating positions) and capacity building advisable while negotiating, not after. • Resources should be committed in advance