Aug 7, 2009

Any more FTAs to be signed, please wait for the Prime Minister to emerge from his bath

Abu Abraham's cartoon in Indian Express

At the height of the infamous Emergency period, noted cartoonist Abu Abraham drew a cartoon in the Indian Express that will never fade away from my memory. The cartoon showed the then President Fakhruddin Ali Ahmed in a bath tub with his outstretched hand returning back a signed bill, and saying: if there are any more ordinances, just ask them to wait. 

Abu's cartoon said it all.

If I were an artist or could draw lines I would have surely drawn inspiration from Abu and sketched a similar cartoon to depict the undue haste with which Prime Minister Manmohan Singh is trying to sign the Free Trade Agreements. I am not sure how much time Manmohan Singh takes to emerge from his bath, but at the rate that he is signing FTAs, I wonder whose pressures he is working under. Sonia Gandhi is certainly not playing Indira Gandhi. Maybe, as someone said the other day, he has been promised an honorary doctorate by the Harvard University..

Well, while we are still struggling to understand the gains that will accrue from the India-ASEAN Free Trade Agreement that the Union Cabinet has cleared only a few days back, comes this report from Seoul that says South Korea and India are to sign a de facto FTA today, which will remove or reduce tariffs over the next 10 years, and also open up the two country's services and investment sector.

The news report quoted Cho Choong-jae, an associate research fellow at the Korea Institute for International Economic Policy (KIEP) telling Korean Times: "Effects of the CEPA should not be evaluated merely by tariff cuts. The pact should be appreciated as having given Korea a stepping stone into the Indian market. In view of its potential, India could emerge as a leading trade destination for Korea similar to China."

The India-South Korea de facto FTA comes at a time when the country is in a tearing hurry to sign bilateral agreements. Without even understanding what these agreements would mean for the country, and without even caring to let the country know the implications of such agreements, what it means for trade, livelihoods and resulting hunger, the Prime Minister is not even waiting to emerge from his bath.

We have the India-EU FTA already on the table. Ministry of Commerce is presently in various stages of negotiations with at least a dozen countries, as far as Chile. Close to 35 FTAs are in the pipeline. And what is worse is that the nation does not know what will be the gain from signing all these agreements. If the Prime Minister knows, isn't it his moral duty to inform and educate the country?

The fast track mode the UPA-2 government has adopted to push all these bilateral agreements actually shows the arrogance of returning to power minus the left party support. Who cares now for what the nation thinks. What the PMO decides should be considered to be in country's health, I mean the economic health. After all, as the media reminds us again and again, we have a distinguished economist in the hot seat. But forgets we are also the world's biggest democracy. Let it be clear, Prime Minister is not the CEO of the country. He cannot be allowed to behave like one.

The FTAs are raining at a time when only a few years back the country's great economists were telling us that a multilateral agreement (read WTO) was in the country's interest otherwise imagine the laborious engagements in signing bilateral deals. Those economists, and their superfluous arguement, have since been silenced. They no longer talk about the multiplying number of bilateral deals that are being signed the world over. I thought they wanted only one multilateral deal to take care of international trade. Why is it that the world is now witnessing some 400 bilateral and regional trade agreements on the horizon?

The Doha Development Round is also back on the agenda. Interestingly, while the United States is not keen on ending the impasse at WTO, India is bending backwards to make that possible. It has already brought about a change in the domestic trade guard, and replaced them with a more pliable team. The underlying message to the US government is loud and clear -- India is ready to sign on the dotted line. You just have to wait for the Prime Minister to finish his bath.

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