India in the WTO

The latest issue of the Journal of World Trade has an India-related article on an unusual topic. It examines the use of poor Indian women as surrogate mothers by rich Americans from a GATS perspective. The abstract is below. Haven’t read the paper yet but do plan to do so, and will comment on it here. My instinctive and non-academic preliminary response was some discomfort with the treatment of this issue from a trade law perspective. Wouldn’t a human rights or health framework be more appropriate for regulation in this area both in the US (the so-called service consumer) as well as in India (the so-called service-provider). Is gestational surrogacy a GATS “service”?

Here is the abstract:

Christina Stephenson, ‘Reproductive Outsourcing to India: WTO Obligations in the Absence of US National Legislation’ (2009) 43 Journal of World Trade pp. 189-208

Summary:

This article examines the World Trade Organization (WTO) obligations that inhere from US persons or couples contracting with Indian women for gestational surrogacy. Surrogacy contracts are considered in the context of the General Agreement on Tariffs and Trade (GATT) and the differing laws on surrogacy of different US states. By exploring WTO Appellate Body (AB), Panel and GATT Panel decisions, this article endeavors to determine what WTO obligations bind the US in circumstance of cross–border surrogacy contract. This article addresses how the varying state laws on surrogacy affect the WTO obligations of the US in market access, national treatment and most–favoured–nation (MFN) treatment. The article concludes that there are a variety of ways in which the different state laws have the capacity to violate US trade commitments in relation to international surrogacy contracts. In addition, the analysis serves to illuminate the process under which US trade obligations can be scrutinized to determine what commitments are relevant to a service not contemplated in the US Schedule.

Update:

Am still to read this article for the WTO angle, but a recent Indian Supreme Court decision seems to throw a child’s rights mantle over surrogacy at least in Indian domestic law.

Last year, a child was born to an Indian surrogate mother from Japanese parents. The Japanese couple separated and when the child was born, neither parent was in India except of course the natural birth mother.

A public interest habeas corpus petition was filed in the Rajasthan High Court. Eventually, the matter reached the Supreme Court when the Japanese grandmother filed a petition. The Supreme Court gave its decision on 29 September 2008. The decision is available at http://judis.nic.in/supremecourt/helddis.aspx

The Court in effect allowed the baby to leave India with the Japanese grandmother. It did this by stating that any concerns relating to the rights of the baby should be raised before the commission constituted under the Commissions for Protection of Child Rights Act, 2005, and noted that no complaint had been made before this Commission. The Supreme Court also went on to state that the surrogacy procedure "is legal in several countries including in India where due to excellent medical infrastructure, high international demand and ready availability of poor surrogates it is reaching industry proportions".

I find this Supreme Court decision very unsatisfactory. The Court was keen to let the baby leave India (which I don’t have an issue with), but it seems to have laid down the law here (that surrogacy is legal) in the absence of legislation and while a bill was pending before Parliament on the same issue. (See the Assisted Reproductive Technology (Regulation) Bill 2008.)

The Court also abdicated its constitutional responsibility to protect fundamental rights of a child by suggesting that the appropriate forum was the Commission under the Commissions for Protection of Child Rights Act, 2005.

Well, this whole surrogacy issue raises questions of citizenship, which mother’s name will go on the birth certificate under Indian law, immigration, reproductive rights, and child rights. Not too sure of the trade angle.

With Indian national elections due from 16 April, most major political parties have released their election manifestos. I looked at some of these to see if they mentioned the WTO.

The CPI (M) 2009 manifesto does mention the WTO and says this:

WTO and Trade Issues
The CPI (M) stands for:
Protecting Indian interests and that of the developing countries in the ongoing Doha Round of WTO; no further tariff cuts in agriculture and industrial goods.
Restore measures to protect small and marginal peasants, including quantitative restrictions
Keep sectors like health, education, water resources, banking and financial services out of GATS; Press for review of the TRIPS agreement.
Review existing Free Trade Agreements (FTAs); Make public India’s negotiating positions in the FTA negotiations with EU and EFTA.

The Indian National Congress does not mention the WTO in its 2009 election manifesto. The manifesto does talk about its approach to governance and professes a “middle way”:

The Middle Path – the Congress’s way

Balance—or the middle path–has always been the hall-mark of the policies of the Indian National Congress.

As the world experiences a severe recession, it is this balance that is standing India in good stead.

It is a balance between the public sector and the private sector, with an important role assigned to cooperatives and self-help groups.

It is a balance between building a modern economy and imparting a  new thrust to traditional industries.

It is a balance between promoting employment in the organized sector and protecting livelihoods in the unorganized sector.

It is a balance between addressing the needs of urban India and improving the quality of life and standard of living in our villages and towns.

It is a balance between taking advantage of globalization and ensuring that these benefits flow to local communities.

It is a balance between regulation by the government and unleashing the creative spirits of our entrepreneurs and professionals.

It is only the Indian National Congress that cherishes and practices this balance in all spheres of our national life including in the conduct of economic and foreign policy.

This balance is needed now more than ever.

Surprisingly, the BJP is still to release its manifesto.

It would be interesting to look at political party manifestos for all Indian general elections since 1990 and trace how the Indian political debate on the WTO has evolved.

In its 1998 election manifesto, the Congress did mention the WTO. An extract:

The Congress will continue to fight for India’s interests in world forums like the WTO. At the same time, it will honour all international commitments in a responsible manner.

In its 1999 manifesto, the Congress talked extensively about exports, trade and the WTO. This manifesto from 1999 is an interesting document and in its detailing and scope goes way beyond what election manifestos in India usually amount to. Some extracts:

A stable, long-term policy on exports of agricultural products and commodities will be adopted. Apart from increasing incomes for farmers this will also generate new employment.

The Congress will impart a whole new look to the Khadi and Village Industries Commission (KVIC) that has significant potential for generating employment in rural and semi-urban areas. KVIC will be transformed into a modern, research-based, technology-oriented, customer- focussed organisation. New programmes for the development and modernisation of the coir industry, handlooms, powerlooms, handicrafts, food processing, sericulture, wool development, etc. – all of which have a high employment potential – will be launched.

A greater thrust on labour-intensive exports of textiles, handicrafts, gems and jewellery, leather, software, light engineering and consumer goods manufacturing will also significantly boost employment. These industries have considerable export potential, which will be taped.

…

Tourism is yet another major employment generator, apart from being a low-cost way of earning foreign exchange. Considering what we have to offer the world, we must aim at no less than doubling international tourist traffic into India in the next four to five years and facilitating an exponential increase in domestic tourist traffic.

…

The services sector, as a whole is another major employment generator. So is the self-employed sector. Both will be expanded and encouraged with the easy availability of finance and reforms of laws and regulations that stand in the way of their growth.

…

The terms of trade will always be kept in favour of agriculture. While remunerative procurement and support prices constitute a key element of this strategy, it is essential to sustain favourable terms of trade through productivity gains and marketing support.

…

India is one giant common market and must function as one. Unfortunately, there are still many fiscal and other barriers, which are preventing the emergence of a truly national common market. These barriers will be eliminated in consultation with state governments. The objective will be to move towards a system of value-added taxation (VAT) and uniform rules for the treatment of interstate trade.

…

Considering the crucial importance of the textiles industry in India, particularly from the point of view of employment and exports, the Congress will come out with a comprehensive, forward-looking textile policy. This policy will, among other things, deal with issues relating to improving the productivity of cotton cultivation, … substantially increasing the global market share of Indian textiles, etc.

…

International Trade and Investment

Immediate steps will be taken to revive the export momentum in the economy that was so much in evidence in the latter half of the eighties and the mid-1990s. India’s exports must grow by at least 15-20% per year on a sustained basis. All policy and procedural barriers to faster exports must be dismantled. Exports create employment and greatly assist in the diffusion of prosperity but high transaction costs and restrictive policies in areas like the small-scale sector are preventing India from increasing her exports and generating new employment.

Government and industry will work closely together to help prepare a plan of action to cope with the new and emerging challenges in the international trading system. A special effort will be mounted in the areas of agriculture, textiles and pharmaceuticals. The Information Technology sector, specifically software, which has emerged as India’s newest motor of growth for exports, will be given every encouragement.

India will continue to meet all her international treaty and multilateral agreement obligations in a responsible and time-bound manner and will continue to work to use the WTO to gain additional market access for products and services of interest to India. It will proactively participate in all existing and proposed global discussions with a view to influencing the agenda and enhancing its bargaining strength. It will work with other countries to push for faster dismantling of controls on trade in textiles and agriculture. The objective of tariff policy will be to reach levels prevalent in south-east and East Asia in the next two to three years and global levels shortly thereafter.

India will continue to proactively encourage investment from foreign companies and overseas Indians. There is an entirely new generation of entrepreneurial overseas Indians, which is making a mark in countries like the United States. A special effort will be mounted to attract this group of investors and build enduring networks with them. In the last few years, India has received a direct foreign investment inflow of around $ 3 billion per year. This is a very low figure considering India’s requirement for investment and considering the global availability of capital. Our target should be to reach at least 8-10 billion dollars of foreign direct investment inflows early in the next decade.

India’s insistence on an adequate special safeguard mechanism for agriculture is widely viewed as one of the contributing factors to the failure of the July framework talks in 2008.  Indian trade Minister Kamal Nath often describes India’s position on agriculture, including its demands for reduction in agri-subsidies by the developed world,  as a question of livelihood (and not of business) on which India cannot compromise.

What interests me is the connection between farmer suicides in India and the formulation of Indian trade policy on agriculture and the formulation of India’s Doha round negotiating position on agriculture. News reports in India about the Doha agricultural negotiations and Mr Nath’s various speeches do not directly refer to the spate of farmer suicides in India. Indeed, the political discourse in India itself (as visible in news publications) has not remained consistently engaged with this issue. Small periods of noisy outrage exist between longer periods where the issue is almost absent from the mainstream political discourse.

Though the numbers on these farmer suicides are disputed, yet even allowing for these variations, the figures are high enough to warrant a serious political impact and to expect an engaged political discussion. One would also expect that the issue would seep into agricultural trade policy issues and into Indian demands and sensitivities in the Doha round. (For example see my previous post about India wanting to be included in cotton subsidy talks – surely farmer suicides by cotton farmers in India show the serious impact of cotton subsidies for India and justify its inclusion. But I would suppose the emerging India story makes it embarrassing for the Government to flaunt this issue on the international stage).

Are farmer suicides an issue in the coming national elections? At least not in the English national press.   

So what are the facts? Where is the academic and policy research on these issues? Where are the domestic consultations with farmers groups over India’s position at Doha?

I plan to keep an eye out for what I come across on this and will post about what I find on this blog. But for the moment, the following would be of interest:

A March 2008 paper by Nagaraj of the Madras Institute of Development Studies titled ‘Farmers’ Suicides in India: Magnitudes, Trends and Spatial Patterns’, available online here  estimates that between 1997 and 2006, 166,304 farmers have killed themselves in India. For 1995-2006, the figure is close to 200,000. An average of 16,000 farmers have committed suicide in India every year for the last 12 years. The author considers even these figures an underestimation of the full extent of farmer suicides. Farmers without a property title to their farmlands are not included in the official definition of a farmer in some Indian states. The rate of suicides has shown an increase over the years. The farmers who have killed themselves are overwhelmingly male as per official figures. Female farmer suicides are most likely not counted as most female farmers would not have title to the land. Maharashtra, Karnataka, Andhra Pradesh,  Chhatisgarh and Madhya Pradesh are the top five states with the most farmer suicides. These are five contiguous states in the India heartland.

While India is now touted as a fast-growing booming economy (or at least was until the recent global recession), it is also undergoing a serious agrarian crisis. What is the link between farmer suicides and India’s agrarian crisis? The paper by Nagaraj points to a multi-causal explanation behind farmer suicides. He describes these as a social phenomenon certainly linked to India’s widespread and persistent farm crisis coupled with pre-existing conditions of vulnerability and an absence of alternative livelihood opportunities. Nagaraj dismisses sporadic, disjointed and single-point policy interventions and suggests that the crisis needs comprehensive policy intervention and a complete reorientation of agrarian policies. So where is the research on what should be India’s agricultural trade policy in the context of these suicides? 

Also see the Final Report on Causes of Farmer Suicides submitted to the Mumbai High Court from 2005 by the Tata Institute of Social Sciences.

Leaves me wondering who is accountable for these large number of deaths?

For more see this Counterpunch story, this New York Times story

Indian Commerce Secretary says India cannot be kept out of Doha talks on reducing cotton subsidies. The Economic Times reports:

India has said it should be included in the exclusive meetings which the US has been holding with West African cotton producing countries on subsidy cuts as part of the on-going Doha round of multilateral trade talks at the World Trade Organization (WTO). As India is the second largest cotton producing country in the world, it said that it should be made part of all discussions on reduction of the high US subsidies on cotton.

Addressing a seminar on threat to multilateralism in the evolving global scenario organised by Ficci on Friday, commerce additional secretary R Gopalan said that India wants to be part of the discussions taking place between the cotton four countries (which includes Benin, Chad, Burkina Faso and Mali) and the US on subsidy reductions in cotton. “We, too, want to be part of the discussions as we too are a major cotton producing country. We cannot be kept out of the talks,” he said.

Well this is interesting. India ought to worry about a special deal on subsidy cuts being offered by the United States to the Cotton four (all least developed countries) as part of WTO special or differential treatment or as what it is more fashionably called these days, –“variable geometry”.

It also shows how despite India becoming a part of the so-called “core group” in Doha round talks, it can still be excluded from talks on issues that directly affect it and where its stance is likely to be viewed as hindering a deal. Of course these are bilateral talks between the United States and the Cotton 4, yet once a deal is reached there and with Brazil the other main stakeholder in this issue, India might get sidelined and be confronted with a deal that it will find difficult to renegotiate.

Joseph Stiglitz in his film ‘The World According to Stiglitz’, draws a direct connection between such subsidies and the drop in cotton prices in India which led to thousands of poor farmers committing suicide last year. See here

Meanwhile Brazil has reportedly asked the United States for $2.5 billion in sanctions for losses caused to Brazilian cotton producers on account of illegal US cotton subsidies between 1998 and 2000. The report:

GENEVA: Brazil is asking the World Trade Organisation to approve $2.5 billion (1.97 billion euros) in sanctions against the United States in a dispute over US cotton subsidies, the Brazilian ambassador said Monday. Roberto Azevedo said the request was lodged at a meeting of the WTO’s Dispute Settlement Body in Geneva. “We have asked the WTO to ensure that Brazil is compensated $2.5 billion for the prejudice … suffered by our cotton producers between 1998 and 2000,” Azevedo, Brazil’s ambassador to the WTO, said after the meeting. “If the big countries are not sanctioned for violations of WTO rules, that would affect the credibility of the organisation,” he added. Last June, a WTO panel upheld a Brazilian complaint that the United States had breached trade rules over its subsidies for cotton farmers. Brazil first brought the case to the trade bloc in 2002. It estimates that total US cotton subsidies were worth 12 billion dollars between 1999 and 2002. Compared with the value of cotton produced, which reached $13.9 billion during the period, it means that subsidies came to about 89.5 percent. After the WTO ruled in its favour, Brazil had said it could seek more than $1 billion in retaliatory sanctions. The subsidies paid by Washington to US cotton farmers have been criticised by non-governmental groups, who say they depress world cotton prices, thereby penalizing producers from poorer countries, particularly in Africa. The C4 group of West African cotton-producers — Benin, Burkina Faso, Chad and Mali — has since 2003 been fighting for the cotton issue to be included in the Doha Round of negotiations for a global free trade pact.

So is this as compensation or retaliation? Also, if granted, will such sanctions apply on an MFN basis to benefit cotton farmers in third countries like India?

The sixth round of India-EU FTA negotiations in New Delhi has Indian NGOs demanding access to “secret” FTA negotiating texts. The Times of India reports that protestors were detained outside the office of the European Commission in New Delhi. A body called the Forum on FTAs (described elsewhere as an umbrella group of 75 organizations) is spearheading these Indian civil society protests. An entity called FTA Watch-India has sprung up recently.

While I cannot comment specifically on the demands of this group in the EU-India FTA context, a discussion on how India makes its trade policy and whether it adequately consults with domestic stakeholders in formulating negotiating positions is much needed. Domestic stakeholders who ought to be consulted include not only NGOs, but also parliament, business, labor unions, farmers groups and consumers. Not much literature is available on the Indian trade policy-making process. There is however an interesting paper by Biswajit Dhar on this in a publication by IISD available here.  See Biswajit Dhar and Murali Kallummal, “Trade policy off the hook: The making of Indian trade policy since the Uruguay Round”, in Halle and Wolfe (eds.) Process Matters: Sustainable Development and Domestic Trade Transparency, IISD 2007.

I had earlier posted on a news report on the low appetite in India these days for new FTA commitments given imminent elections and the domestic impact of the global economic downturn. An Economic Times story shows that the concerns about the EU-India negotiations are not limited to civil society, but also emanate from business and agricultural economic interests.

Speaking to ET last week, a commerce ministry official sought to allay the growing concerns in domestic circles over the proposed India-EU economic agreement. “There are strong complementarities between the EU and India. After all, we have not yet reached the stage of making the trade-offs and so the fears being expressed now are unfounded,” said the official, who was busy preparing for the sixth round of India-EU bilateral talks beginning Tuesday.
This, however, could be an over-simplistic view. There is clearly a need for greater involvement of all stakeholders in the negotiation process. The high-level trade group which had drawn the broad contours of the agreement was not representative enough.
The EU is India’s largest trading partner, accounting for a fifth of India’s total trade and also one of the largest sources of foreign investment in India. As opposed to this, India currently accounts for less than 2% of the EU’s total trade.
Clearly, as things stand now, India has much to lose (or gain) from the agreement as compared to the EU. Note that the agreement would cover a gamut of areas—trade in goods and services, IPRs, cross-border investments, competition policy, government procurement etc. So India’s policymakers ought to be more chary of the proposed pact than their European counterparts. There is a need for more transparency as well as greater involvement of all stakeholders in the negotiations.
Going by the high-level group’s report, India might need to go WTO-plus in the area of trade in goods, with no commensurate reciprocal gestures from the EU side. The agreement would, as things stand now, allow India to keep just 10% of the tariff lines—which include both agricultural and industrial goods—outside its scope.
It may be noted that India has been resisting the multilateral (WTO) trade liberalisation deal even as it did not have to cut tariffs on 5%f agricultural tariff lines and only make less-than-average reductions in another 7%, and looked close to getting the freedom to keep 5% of industrial tariff lines outside tariff reduction formula. Besides, India has already got preferential (zero) access to EU in case of several tariff lines under the GSP system, which reduces the scope for India to gain in terms of reduction in tariff barriers by the EU.

India and China are in bilateral official-level talks in New Delhi. China is now India’s largest trading partner and India is China’s 10th largest trading partner. There is a huge trade surplus favoring the Chinese side, but China says it does not intentionally seek a trade surplus with India. From the new developments it seems unlikely that China will go in for formal WTO dispute settlement on the toy imports issue. The Indian government has admitted that the safety standards applicable at present exclusively to toy imports from China, need to be extended to imports from other countries and that comparable standards need to be put into place for Indian-made toys as well.

Xinhua reports:

During the talks, both sides agreed to set up a joint working team to coordinate and communicate regularly on the problems of bilateral trade, said the sources

    The Chinese side expressed great concern over India’s frequent trade remedy probes against Chinese products, especially the prejudicial restrictive measures against Chinese toys, and asked India to avoid abusing trade remedy measures to over-protect its domestic products, and to uplift the restrictive measures on Chinese products, which were imposed merely out of prejudice and contradicted the WTO rules, said the sources.

    The Chinese side also hoped that the two sides should solve bilateral trade disputes through government-to-government communications and coordination and strengthening of dialogue between the industrial sectors of the two countries, said the sources.

    Vice Minister Zhong said at a media conference that China reserves the right to resort to the WTO dispute solution authorities over India’s ban of Chinese toys, but still believes the two sides have the capability and wisdom to solve this problem through communications and coordinations

    Secretary Pillai said that according to Chinese statistics, bilateral trade between India and China has attained a volume of 51.8 billion U.S. dollars in 2008, so China has overtaken the United States as India’s largest trade partner.

    Pillai expressed his hope that both sides expand bilateral trade and investment, and stand up against trade protectionism, saying India is willing to solve the problem of on-going anti-dumping and anti-subsidy investigations against Chinese products through coordination at the level of the joint working team.

    In order to avoid possible prejudice against Chinese toys, India will also study and make up as soon as possible the safety standards for toy products, so that all imported toys and domestically made toys will all abide by the standards, he added.

    The Indian side also hopes that China will solve as soon as possible the problem of quarantine and safety tests for Indian agricultural products and beef products bound for Chinese market, and take concrete measures to expand import of such products from India.

    The Chinese side said that China does not intentionally seek trade surplus with India and wants to have a balanced development of bilateral trade and push forward the solution of the problem of quarantine for Indian food products.

    According to statistics of Chinese Ministry of Commerce, from October 2008 to February 2009, India has launched 17 trade remedy probes, including those of anti-dumping and anti-subsidy, against Chinese products, covering industrial salt, steel, auto parts, coal products, porcelain products, textile and rubber products, which means a total loss of more than 1.5 billion U.S. dollars for the Chinese producers and traders.

    Moreover, the Indian government has imposed restrictions on imports of Chinese steel, chemical and textile products and declared a six-month ban of Chinese toys in January. But due to opposition of home toy dealers, India has eased the ban on boys and allows import of products with international safety certificates.

Due to the continuing interest in the discussion on the recent Indian measures against imports of toys from China on safety considerations (first the ban and then its revision to new mandatory safety standards), I have created a new blog category Indian safety measure for Chinese toys where all posts and comments on this issue can be accessed. I hope this will facilitate retrieval of information for those interested.

The Economic Times reported yesterday that China has raised the issue of the mandatory safety standards imposed by India on imported Chinese toys before the WTO Committee on Technical Barriers to Trade. 

In its complaint to the WTO, China has alleged that India’s quality checks violate the condition of “national treatment” laid down under WTO’s trade rules as they did not apply to toys manufactured in India or imported from any other country.

In its submission to the WTO committee on technical barriers to trade, China pointed out that since the restrictions apply only to Chinese toys, it could be viewed as a general ban on and a discriminatory measure against Chinese toys.

This breached a series of fundamental principles embodied in the WTO agreement, including that of most favoured nation treatment (every member country will be treated on a par with other member countries), and national treatment (product from a member country will be given the same treatment as that given to a product made locally), along with provisions of technical barriers to trade (TBT) agreement.

China also pointed out that India did not inform WTO about the restrictions, a procedure necessary under the transparency obligations of TBT agreement.

“China strongly requests that India revoke its discriminatory and WTO-inconsistent restriction on Chinese toys immediately,” the submission stated.

So China is alleging that even the revised Indian notification violates both MFN and national treatment. Further, it violates the notification requirement in the TBT agreement. For more background, see earlier posts on this subject under the category –public health. See http://indiainthewto.wordpress.com/2009/03/02/indian-government-relaxes-ban-on-chinese-toy-imports/

Why did the Indian government not use Clause 2.10 of the TBT agreement permitting the issue of safety standards in urgent cases with post-facto notification to the WTO secretariat and other members? Such a notification requires the statement of objectives and the rational for the standards. India will probably argue that these are international standards not requiring notification, but the application of these standards exclusively to imports from China does raise potential violations of MFN and NT.

The Indian authorities could have avoided a lot of trouble if only they had also followed the letter of WTO rules in this matter. The flexibility to take action against imports for safety reasons is fully available, but the Indians seem to have messed up on procedure. Is this an example of lack of capacity in Indian government institutions to use the WTO rules effectively? Why do they not consult lawyers more? 

The Hindu meanwhile has an interesting take on the matter:

China is likely to convey its concern to India over New Delhi trying to restrict import of Chinese goods, even though Beijing has not "yet" dragged its neighbour to the World Trade Organisation on the issue.

Chinese Vice Minister of Commerce Zhong Shan is expected to convey his country’s strong resentment over India resorting to protect its industry against imports from China, when he meets Commerce Secretary G K Pillai here this week, sources said.

"We have nothing on this yet," WTO spokesperson said in an e-mail from Geneva when asked whether China has lodged any formal complaint against India. China was upset over India slapping a ban on import of Chinese toys on January 23, which was partially eased within six weeks, provided the toys conformed to international health and safety standards.

The official Chinese media had reported that the country was mulling to drag India to WTO for contesting the ban. However, Mr. Pillai is expected to confront Mr. Zhong with data showing surge in imports from China.

While the bilateral trade has seen a sharp rise in the fiscal 2008-09, it is highly skewed in favour of China. In 2007-08, India’s exports to China stood at USD 10.83 billion, while imports was USD 27.11 billion.

So why would Indian Commerce Secretary talk to the Chinese about surging imports in a matter to do with safety issues? To be fair, the discussions between the Indian Commerce Secretary and the Chinese Vice Minister of Commerce will likely cover all the recent trade tensions between the two countries. And the discussion of import surges will probably feature in that context.

I found an extremely interesting paper on SSRN on this topic that examines the historical relationship between trading institutions and religious violence in India.

See  Jha, Saumitra,Trade, Institutions and Religious Tolerance: Evidence from India (January 10, 2008). Stanford University Graduate School of Business Research Paper No. 2004. Available at SSRN: http://ssrn.com/abstract=948734. The full-text is available for download.

Jha examined the prevalence of Hindu-Muslim religious riots in India during the period 1850 –1950 and found that trading ports had 25% less religious riots than other Indian towns. He also found that trading ports in Gujarat dating back to medival times, were less afflicted by the 2002 Gujarat riots. Jha explains this difference as due to the persistence of institutional mechanisms that developed to support inter-religious medieval trade. These institutions encouraged specialization, inter-ethnic complementarity, and the mitigation of incentives for ethnic violence by allowing the gains from inter-ethnic trade to be shared between religious groups. Mechanisms for sharing the gains from trade included joint ventures, voluntary provision of public goods and direct inter-group transfers.

Jha’s paper demonstrates the effects of social institutions in preserving social capital  and draws attention to how policy interventions are required for trade to contribute to peace.  It provides a good example of John Ruggie’s “embedded liberalism” idea, the need for trade liberalization to be embedded in the social community. 

At the request of the U.S. Senate Committee on Finance, the US International Trade Commission has launched a fact-finding investigation into whether US agricultural exports to India are being impeded due to Indian tariff and non-tariff barriers. The ITC news release has more:

The investigation, India: Effects of Tariff and Nontariff Measures on U.S. Agricultural Exports, was requested by the U.S. Senate Committee on Finance.

In its letter requesting the investigation, received on January 13, 2009, the Committee stated: "U.S. agriculture depends on reliable access to global markets. Strong economic growth in developing countries like India presents opportunities for U.S. agricultural exports…. While U.S. exporters can provide individual examples of trade measures that prevent their sales to India, the extent to which trade and investment measures account for the disproportionately low U.S. share of India’s agricultural imports remains largely undocumented."

As requested, the ITC, an independent, nonpartisan, factfinding federal agency, will provide an overview of the Indian agricultural market; a description of the principal measures affecting Indian agricultural imports; information on Indian government regulations, including state regulations, covering agricultural markets and foreign direct investment affecting U.S. agricultural products in India; an evaluation of the impact of India’s food marketing and distribution system; and a quantitative analysis of the economic effects of Indian tariffs, and to the extent possible, nontariff measures on U.S. agricultural exports to India.

The ITC will submit its report to the Committee by November 12, 2009.

The ITC will hold a public hearing in connection with the investigation at 9:30 a.m. on April 21, 2009. Requests to appear at the hearing should be filed no later than 5:15 p.m. on March 24, 2009, with the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. For further information, call 202-205-2000.

The ITC also welcomes written submissions for the record. Written submissions (one original and 14 copies) should be addressed to the Secretary of the Commission at the above address and should be submitted at the earliest practical date, but no later than 5:15 p.m. on June 26, 2009. All written submissions, except for confidential business information, will be available for public inspection.

Further information on the scope of the investigation and appropriate submissions is available in the ITC’s notice of investigation, dated February 9, 2009, which can be obtained from the ITC Internet site (www.usitc.gov) or by contacting the Office of the Secretary at 202-205-2000.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means. The resulting reports convey the Commission’s objective findings and independent analyses on the subject investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigations reports are subsequently released to the public, unless they are classified by the requester for national security reasons.