The Fifth Ministerial Conference of the World Trade Organisation due to commence this week at Cancun promises modest progress in trade negotiations. The setting for this ministerial is quite different from that of the last one in Doha 22 months back.
The Doha ministerial was held barely two months after the September 11 attacks. The Americans were keen on building an international coalition against terrorism. The words of President Bush -- "You are either with us or against us" -- were ringing loud and clear in the minds of those attending the ministerial.
Everyone, except India, was able to grasp the agenda of the world's sole superpower: at Doha, all member countries must appear united against terrorism and launch a new round of negotiations.
However, India went to Doha with a one-point agenda, which was to block any further progress on trade talks, and was hopelessly isolated.
Finally, India had to succumb to pressure and give in. The Doha Development Round was launched. That was quite an achievement after the collapse of the previous trade talks at Seattle two years back.
Almost two years down the line, the Americans are still determined to pursue the war on terror. They have captured Afghanistan and Iraq. But, they still need an international coalition against terror. President Bush would prefer to see the WTO members present a united face once again.
The Europeans and other rich countries also seem to have a similar view. That should normally be enough to ensure that trade ministers will come out with a compromise text of a declaration.
A new round of negotiations, pushed through hastily in Doha, expectedly suffered a setback. The views of the WTO member countries were much too divergent and almost all the deadlines set at Doha were missed.
At Geneva, the representatives of the different countries did little but reiterate the rigid positions of their respective governments.
Cancun promises to be a modest success because not only has there been a symbolic agreement between the European and Americans on agriculture subsidies and an agreement on patents between the US, India, Brazil, Kenya and South Africa, there seems to be greater appreciation that trade liberalisation helps.
India, for example, owes its growth to liberal trade policies of the rich countries in particular. The double-digit exports growth in the last couple of years has helped revive the economy. The fear of a negative fallout because of the abolition of quantitative restrictions have proved to be vastly exaggerated.
The fears that Chinese goods might swamp India have been belied. More and more companies in rich countries are turning to India for outsourcing business processes. Indian industry is more competitive now and able to hold its own against competition.
At Cancun, interest will be centred on whether negotiations will start on the so-called 'Singapore issues'. The Americans have agreed to unbundle the four issues and expects India to agree explicitly to a consensus on transparency in government procurement and investment.
It is an offer that substantially undermines India's stance that the Singapore issues need not be discussed now. However, in the Indian camp there is a quiet appreciation that no great harm will come if negotiations commence on these issues.
These changes in perception and attitude are sufficient to ensure that the Cancun ministerial may end with less acrimony than the one at Doha.
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