Doha Development Round: Current and Future Challenges

2 Will the Development Objective of this Round be achieved? No Because the objectives are formulated as consummatory values which can only be progressively realised The objectives and discourse has raised expectations so high that any compromise deal is bound to disappoint the ‘development’ lobby This Round more than any previous round shows a trade regime in crisis

3 A Trade Regime in Crisis? An international regime - “a social institution around which actor expectations converge in a given area of international relations ” John Ruggie The manifestation and legitimation of political authority in a regime “represents a fusion of power with legitimate social purpose” John Ruggie Regimes change on account of changes in power and/or purpose John Ruggie

4 Application of Ruggie’s model of regime change Post-1971 international economic order Hegemon X Congruence of Social Purpose  Bretton Woods in 1945 “ Power and purpose covary positively” Hegemon  Congruence of Social Purpose  The inter war period “Power and purpose covary negatively” Hegemon X Congruence of Social Purpose X 17 th Century Dutch economic supremacy “A single predominant economic power whose economic program differs fundamentally from that of its leading rivals.” Hegemon  Congruence of Social Purpose X

5 Conclusions from Ruggie’s analysis Economic hegemony is not essential to sustain or establish an international economic regime Past trade regimes liberalised trade only to the extent compatible with the particular social purpose that they manifested Changes in trade regimes can signify either greater openness or closure or changes in direction and content that embodies the change in social purpose Andrew Lang

6 Conclusions from Ruggie’s analysis The social purpose is initially forged within individual States in their domestic context by the balancing between ‘authority’ and ‘market’. This defines the “legitimate social purposes in pursuit of which state power was expected to be employed in the domestic economy.” John Ruggie These understandings of “state-society relations” at state level form the building blocks for the formation of social purpose at the international level that an international regime advances Depending upon the power configuration, the social purpose of the regime or its “collective reality” can either be provided unilaterally by the hegemon or be the outcome of a compromise between leading economic powers

7 Conclusions from Ruggie’s analysis The legitimate social purpose manifested in the Bretton Woods 1945 outcome and the post 1971 trade regime was termed “Embedded Liberalism” by Ruggie Embedded Liberalism did not apply to Developing Countries Developing Countries at that time were clearly “Regime Takers” and thus were excluded from negotiating the social purpose The alternative legitimation idea offered to developing countries in place of “embedded liberalism” was “Special and Differential Treatment” or non-integration in the trade regime

8 The Uruguay Round Developing Countries were still by and large “Regime Takers” The Social Purpose behind the WTO continued to be “Embedded Liberalism” ? But it still does not apply well to developing countries. SDT as the basis of developing country participation in the WTO regime was weakened as the focus shifted to their integration into the regime

9 Ten Years On Developing Countries now politically integrated in the WTO regime Change in power distribution in the Regime Developing Countries no longer the “Regime Takers” Divergence of social purpose between developed and developing countries Greater fragmentation of power and divergence of social purpose between regime givers and/or regime blockers RESULTS in Ongoing Crisis in the WTO manifested in struggle over defining the social purpose of the regime

10 Divergence of social purpose between developed and developing countries Social purpose for Government still being forged in India Indian Constitution on ‘social purpose’ Directive Principles of State Policy in Article 36 of the Constitution of India Provisions shall not be enforced by any court, but the principles therein laid down are nevertheless fundamental in the governance of the country and it shall be the duty of the State to apply these principles in making laws. The State shall work towards the following goals: A social order for the promotion of welfare of the people To minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities The operation of the economic system does not result in the concentration of wealth and means of production to the common detriment

11 Social purpose for Government still being forged in India The health and strength of workers, men and women, and the tender age of children are not abused and that citizens are not forced by economic necessity to enter avocations unsuited to their age or strength Within the limits of its economic capacity and development, make effective provision for securing the right to work, to education and to public assistance in cases of unemployment, old age, sickness and disablement, and in other cases of undeserved want Take steps, by suitable legislation or in any other way, to secure the participation of workers in the management of undertakings, establishments or other organisation engaged in any industry Endeavor to provide, within a period of ten years from the commencement of this Constitution, for free and compulsory education for all children until they complete the age of fourteen years

12 Social purpose for Government still being forged in India Secure, by suitable legislation or economic organisation or in any other way, to all workers agricultural, industrial or otherwise, work, a living wage, conditions of work ensuring a decent standard of life and full enjoyment of leisure and social and cultural opportunities and, in particular, the State shall endeavour to promote cottage industries on an individual or co- operative basis in rural areas. shall promote with special care the educational and economic interests of the weaker sections of the people, and in particular, of the Scheduled Castes and the Scheduled Tribes, and shall protect them from social injustice and all forms of exploitation shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties shall endeavour to protect and improve the environment and to safeguard the forests and wild life of the country

13 Conclusions Problems with development and SDT discourse at the WTO Current political paralysis at WTO negotiations an outcome of basic disagreement about the WTO’s social purpose going forward For the international trade regime to work for development :- FIRST, the forum and process it offers must remain inclusive and democratic where all voices can be heard SECOND, the intermediaries i.e., the governments have to be held accountable to the people they govern for the quality of governance and international representation that they offer