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The anti-Dunkelites who have suddenly become vociferous in opposing India’s decision to sign the draft agreement on the 8th round of negotiations on the General Agreement on Trade and Tariffs (GATT) are propagating Paranoia. Their prevailing demagoguery maintains that it will hurt the farmers. It will increase drug prices and allow greater market access to multinationals while denying similar benefits to India.
It will do no such thing. It does not stipulate reductions in subsidies for Indian farmers. Interestingly, the maximum opposition to the draft came, in fact, from developed countries who are being forced to reduce massive agricultural subsidies. Such reductions will raise world prices and make India’s agricultural products more competitive in the international market. There may be genuine concern among farmers that they may be debarred from marketing patented seeds or paying royalties on them to protect the interest of multinationals. But in the long term cost-benefit analysis, these worries are outweighed by the advantages of high quality, standardised seeds and new technology that will flow in.
Product patents in the pharmaceutical sector may cause some prices to rise. But only 5 to 10 per cent of drugs are covered by patents. And alternative non-patented drugs can act as price-breakers. In any case, the prices of drugs have risen despite draconian controls for reasons other than patents.
And the rest of the news is good, too. Ask any garment exporter. After 10 years, India may have to bring down its import duties on certain textile items to below 40 per cent. This is a minor trade-off compared to the major benefit of developed countries like the US agreeing to gradually abolish their import quota systems.
Not signing the draft would be ruinous for India. It would mean its virtual exclusion from GATT the trading partnership of 117 nations under which each country gives the other treatment as favourable as to any other in the application of tariffs. Free trade, ultimately, is an opportunity. The chance to show your excellence, ability to compete and make the necessary internal adjustments like allowing more economic farming, a more efficient credit system and loosening controls while tightening procedures. But to hunker down and protest against the “foreign invasion” is to display a contemptible lack of faith in indigenous ability and entrepreneurship.