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