ADDRESS
BY SHRI K.R. NARAYANAN, PRESIDENT OF INDIA, AT THE INAUGURATION OF THE SEMINAR
ON INTERNATIONAL TRADE LAW AT VIGYAN BHAVAN
NEW DELHI, JANUARY 3, 1998
In 1946,
even before India became independent, Pandit Jawaharlal Nehru, had foreseen
that “the world, in spite of its rivalries and hatreds and inner
conflicts,” was moving “inevitably towards closer co-operation”.
He declared that “it is for this one world that free India will work,
a world in which there is the free co-operation of free peoples, and no
class or group exploits another”.
The
world has in fact moved in the direction envisaged by Nehru. However in
spite of the end of colonialism and the cold war, and the emergence of
a pluralist world order, international law and international trade law
have not yet taken a definite shape capable of eliminating political and
economic conflicts among nations. As a strategic thinker in the United
States has observed the world has entered a new era of “geo-economics”
in which nations and groups of nations are “pursuing adversarial
goals with commercial means”.
In spite of these underlying economic
rivalries and inner conflicts a new body of international trade laws has
emerged calculated to regulate and resolve trade disputes and to free
international trade from the shackles of old restrictive practices. But
if international law in the past had been moulded and biased in favour
of the great political and military powers of the world, international
trade law to-day tend to be tilted in favour of the great developed economic
powers and the multi-national corporations many of which dispose of economic
power greater than the budgets of the governments of the developing countries
put together.
It is
against this larger context that the efforts of the United Nations system
and of the international legal community to develop and codify international
trade law must be seen. I congratulate the International Law Association
for organizing this important international Seminar in Delhi at a time
when the developing countries of the world are struggling against being
marginalized in the sweep of this revolution in world economics and international
trade. This increasing pace of development in the field of international
economic relations has emphasized the need for a viable legal system guaranteeing
smooth transaction as well as the security of international trade.
In recent
times several international trade agreements have brought about significant
transformations in the conducting of international economic and trade
relations. The United Nations Commission on International Trade Law (UNCITRAL)
was established in 1966 by U.N. General Assembly with the general mandate
of progressive harmonization and unification of the law of international
trade. In establishing this institution the United Nations recognized
that the disparities in economic development and the consequent disparities
in laws created obstacles to the flow of international trade. I am glad
to see that the International Law Association has been considering various
international trade conventions concluded by this United Nations Commission
(UNCITRAL).
Technological
changes have resulted in quick movement of goods across borders. During
the last two decades the dramatic growth of information technology has
increased significantly the speed at which commercial decisions can be
taken and implemented. Electronic Commerce has now become an important
instrument of international trade relations.
By far
the most significant recent addition to the body of international economic
law has been the agreements reached during the Uruguay Round of Trade
Negotiations concluded in December 1994 and now being implemented and
administered by the World Trade Organization. There are as many as 24
such agreements and associated documents. Some of these agreements, like
that on TRIPS (Trade Related Intellectual Property Rights) and GATS (General
Agreement on Trade in Services) have established whole new regimes vaster
in scope that even GATT. It is therefore not surprising that the Agreement
establishing WTO has been called a “treaty of treaties”.
The
WTO underpins a new world trading order the ramifications of which have
only now started unravelling. At least in the formal sense, the new trading
order is more liberal than the old GATT in that it has resulted in significant
tariff reductions and bindings, has marked the beginning of liberalization
in trade in agricultural products, and has for the first time laid down
the principles and the framework for the liberalisation of trade in services.
The new trading order is also ostensibly more transparent and predictable
in that it lays down specific requirements, often in quantitative terms,
for resorting to restrictive measures. However, this liberalisation has
not helped as far as restrictions on goods of export interest to developing
countries are concerned.
International
trade law has to adapt to all these changes very rapidly. In the new global
trade system that has been built up developing countries have become the
weaker parties. Indeed their position seems to have become weaker than
even before. While there are clauses in the various WTO agreements providing
for special and differential treatment to developing countries, it is
noticed that in practice many of them are not implemented in spirit if
not in letter. The repeated use of anti-dumping provisions against imports
from developing countries, has created concern regarding the fairness
of the multilateral system of rules. There are also a feeling in several
developing countries that while the developed countries use the letter
of the law to prise open markets in developing countries, they are at
the same time not averse to creating new non-tariff barriers to prevent
the inflow of imports. Social standards and environmental concerns are
being used to deny to developing countries whatever comparative advantage
they may have in respect of trade in some goods. At the same time no allowance
is made for the wide gaps in levels of technology, and there is no positive
effort to transfer technology at reasonable cost to developing countries.
One
of the most disconcerting features of the new trading system is that countries
like India have been required to give up the policy options and choices
which the developed countries had enjoyed until a few years ago. These
included subsidisation of manufactured exports, maintenance of the system
of process patent only in sensitive sectors, and freedom to direct foreign
investment to achieve export-oriented growth and facilitate transfer of
technology. In the case of agriculture, such policy options were available
to the developed countries till the other day.
I am
not proposing, by any means, that we beat a retreat to regain the props
we leaned upon under the old system. We know that it was necessary to
give them up if we wanted to be in the mainstream of world economic development
and be competitive in the world market. But there is no reason for us
to give up legitimate policy options which constitute the bulwark of our
sovereignty and self-reliance. The one world and the global society that
is emerging is a pluralist world and a pluralist society, where the identities
and sovereignties of nations have not been extinguished, but where they
are reaching out to a larger identity and to a larger sovereignty. International
trade law like international law itself must reflect this character of
the world to-day as a pluralist phenomenon based on the democratic concept
of equality before the law and equal protection of laws.
In recent
years with the liberalisation of the Indian economy, the importance of
transnational trade law in the Indian perspective has increased. Once
again international trade has gained momentum for us and India, along
with other developing economies, is seeking to take its rightful place
in the world economy. If international trade is to be conducted with less
friction and with a measure of fairness we need a trade law and a mechanism
for settling trade disputes. I believe that this international Seminar
of legal luminaries will make a significant contribution to the legal
framework for the conduct of international economic and trade relations.
Thank you
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