Business Standard, India
Bilateral trade deals to end, predicts expert
Our Bureau / Kolkata
5 January 2006
Country-specific trade agreements might finally give way to an integrated trade agreement or organisation, indicated Abdul Quader Shaikh, Senior Economist, United States (US) Department of Commerce at a seminar on the WTO today.
"The country-specific trade agreements will finally perish as the ultimate aim is to have an integrated world trade organisation", said Shaikh.
"Globalization is an irreversible process and we should jump onto the bandwagon and take advantage, or we will be left behind", he added.
WTO might finally move towards attaining rights for free movement of individuals all over the world, something that will augment it’s objective of obtaining fair and free trading rights for nations all over the earth, said Shaikh. Shaikh spoke about the need to look into quality of products and unit labour cost in the manufacturing sector.
He said that while less developed countries had the advantage of lower labour cost to attract foreign investment, at the same time, they did not have the infrastructure needed for high quality goods.
There is a need to improve infrastructure and reduce this disparity for less developed countries to continue getting business, since today’s consumer is educated enough to demand quality goods, said the economist.
Trade is growing faster than gross domestic product (GDP) as countries are using trade as an economic vehicle, said Shaikh.
The US is looking for a level playing field in terms of trade and if smaller markets grow, they would become better trade centres for the US.
WTO is a multi-lateral trading system that offers tech support to less developed nations to help them become international players, added Shaikh.
Speaking on India, he said that as the world’s leading countries are moving away from manufacturing and turning towards the service sector, India has a huge competitive advantage, as the country is trying to raise its information technology (IT) exports from $17 billion last year to $ 60 billion this year. He said that India is the 10th most industrially developed country in the world with a ranking of four on the purchasing power parity scale (PPP).
However, there is a need for a policy for sustainable growth, he cautioned, just as there is the need to lower tariff and fight red-tapism at the borders to lower product cost.
Shaikh stressed on laying focus on rural development to lower poverty level in the country and increase GDP. He said infrastructure development is needed for that.