Supachai: ‘An India-China FTA will be better than an India-US FTA’

Financial Express | Sunday , March 09, 2008

THE MONDAY INTERVIEW : SUPACHAI PANITCHPAKDI

‘An India-China FTA will be better than an India-US FTA’

A UN Conference on Trade & Development (Unctad)-led study has, for the first time, turned the spotlight on the role of gender in India’s trade policy. The man at the helm of the agency’s affairs, secretary-general Supachai Panitchpakdi, has said the Indian government should make its pro-poor programmes more women-oriented. “Promote trade, which is gender related,” the former WTO director-general told FE’s Sunny Verma and Arun S in a wide-ranging interview. Excerpts:

You have struck the right chord with women by arguing for ‘gender sensitisation’ of trade policy.

(Laughs) With trade issues, normally women are not much involved. I am surprised that India is well represented by women entrepreneurs’ associations. I saw this as a phenomenon in Southeast Asia. Governments should have consultation with women’s groups to mainstream gender activities into production, investment and trade promotion.

Is there enough evidence to support that increase in trade improves overall status of women?

In labour-intensive and informal sectors like agriculture and textiles, women are paid less and don’t have the basic things, including legal empowerment, negotiating power or fringe benefits. This leads to their exploitation. We want to link globalisation and trade liberalisation with women’s participation. Increased exports were associated with higher female employment in countries like Sri Lanka, Bangladesh, Malaysia, Mauritius, Tunisia and the ‘East Asian Tigers’. We also found industrialisation in Taiwan, Hong Kong, South Korea and Singapore is as much female-led as it is export-led. On the flip side, there was a steep fall in women employment in plantations where exports fell.

Is India’s trade policy falling behind in these areas?

India has benefited in terms of gender empowerment as far as women’s participation in trade is concerned. But there are still some areas of unequal treatment. For example, in wage labour, women are more employed than men, but the treatment they get is worse.

The Indian government has said it could introduce pro-women schemes in foreign trade. How should the country build on this?

India is doing the right thing. But gender should be a part of trade policy. You cannot always legislate on that, but you can target sectors where women are more readily recruitable. Secondly, you can also target industries where women can become self-employed. The government can help them in forming women entrepreneur associations. Thirdly, you have to link their activities not only to the national Economy, but also with international trade. I was talking to women’s cooperatives in India about my work with some Middle East women’s associations that are becoming better organised. I told women in India to link up with them.

What should be done to foster this?

On the UN side, I think there is more to be done on the funding, as there is under-funding of gender activities. On the (Indian) government side, I don’t think it’s a question of funding alone. The quality of the promotion work should be pro-poor trade promotion.

How do you view the proposed free-trade agreement between India and the US?

We should promote FTAs among countries with a similar level of development; there are mutual benefits there. North-South FTAs tends to be WTO-plus; they do not always cover the substantial area of trade. This is a basic concern. I do not object to an India-US FTA, but I would say, beware. Some of the WTO-plus conditions have been discussed at the WTO and dropped, but if you want to take it up once again (in bilateral talks), you better make sure that it conforms to the norms.

The WTO-plus areas cover Trips (Trade-Related Aspects of Intellectual Property Rights) in the pharmaceutical industry, where India has a great interest. There will be tremendous discussion on Trips, especially regarding its application to pharmaceuticals. The Trips agreement has been liberalised to allow poor countries to tap the accessible pharmaceutical market. Bilaterals between North and South tend to take away from this opening up of more market access to affordable medicines.

What about the proposed FTA between India and China?

That’s fine by me. Both countries are at the same level (of development) and can complement each other, which could be enhanced through an FTA. I don’t see much of a conflict of interest in FTAs among these developing countries.

So which FTA is better for India?

The India-China FTA is better than an India-US FTA. If you look at the FTA between Asean and Japan, it is becoming very complicated now, but that has been expanded to cover trade as well as market access.

Such regional trade agreements and FTAs should not just focus on market access. It can be one component, but the agreement should include financial cooperation and development co-operation in the management of public goods like clean air and technology. So, it should be more comprehensive than just trade. Then you avoid the WTO-plus kind of negotiation.

Do you see the Doha round of trade talks progressing?

I don’t think (WTO director-general) Pascal Lamy is imposing any deadlines, but he is trying to ensure that the process is dynamic. If it is stalled at the moment, it might be the end of it. Lamy is trying to push some kind of common platform before the summer-break in Geneva in March-April.

How do you ensure that the development agenda is not scuttled ?

I think Lamy is very conscious of that. Developing countries and least developed countries (LDCs) should stay united and at the same time be magnanimous. You cannot ask only developed countries to be magnanimous. Eventually, LDCs should also be integrated into global trade.