A Peculiar Rush Job For WTO

Tough job WTO’s Pascal Lamy
Photo: Reuters

IT’S NOT who, but how the appointment was made, that is the problem. In a week’s time, the Prime Minister’s Office (PMO) — in all probability — will clear a file to appoint former Infrastructure Leasing & Financial Services (IFLS) managing director Dinesh Kumar Mittal as an additional secretary in the Department of Commerce.

This appointment, say insiders in the PMO and the Commerce Ministry, is crucial: Mittal, an IAS officer of the 1978 Uttar Pradesh batch, who has served the same department earlier as a joint secretary, will replace the suave Rahul Khullar — who will now be the new Disinvestment Secretary.

Khullar is the man who represented New Delhi through some of the most tricky issues at the World Trade Organisation (WTO), the global trade body that is often at loggerheads with Indian interests on a host of contentious issues. The latest are a ban on Chinese toys and the fact of several European nations confiscating consignments of Indian medicines on frivolous charges.

But it’s the way Mittal, initially not empanelled for the position and later pushed into contention for the crucial WTO job, that has raised many eyebrows, ostensibly because of his proximity to Commerce Minister Kamal Nath. In fact, it is rumoured that he worked very closely in shaping the controversial Special Economic Zone project that remains mired in contentious land and labour issues. “Everyone seemed to be in a hurry to close this appointment,” a senior ministry official told TEHELKA.

Tough job Commerce Minister Kamal Nath
Photo: AP

“He did not serve his mandatory cooling off period wherein he had to return to his state, serve for a year, and then return to the Central cadre. Someone in the ministry was obviously in a hurry to have him in the ranks,” the official further added.

The official, who spoke on condition of anonymity, said no one has been able to pinpoint why Mittal was first not enlisted for the job and later inserted into the list of contenders. “The manner in which he was pushed through was suspicious, to say the least, because no discussions actually took place over bringing him in for this crucial post,” the official further added.

Commerce Secretary GK Pillai’s office refused comment on Mittal’s appointment, but it’s a fact that there have been too many protests over the manner in which his appointment came through. “For many years, the Commerce Ministry used to have a National Committee for International Trade, in which such crucial issues were discussed and members of civil society were involved. It was an extremely valuable and important exercise, never mind the committee being loaded with industry representatives. But this, unfortunately, has completely died down. It is important for the nation to know who’s discussing its issues at the WTO. Why not put the name on the ministry website and seek reactions from those who matter?” asks Suman Sahai of The Gene Campaign.

Tough job DK Mittal, who will now handle WTO issues
Photo: PIB

Critics say that rushing into the appointment of a secretary could also be counter-productive because it comes precariously close to New Delhi’s slugfest with Beijing over the move to ban import of Chinese toys: many observers feel the ban may not be compatible with WTO rules. While Indian toy manufacturers see the ban as an opportunity to reclaim their lost marketshare, India may actually find it difficult to justify the decision, despite comments from an upbeat Nath that the prohibition was on health grounds and the decision was in compliance with WTO rules. “There is complete transparency in the matter of public health and safety,” the minister said, while making it clear that India would not lift the ban until it was fully satisfied on issues of health.

Domestic toy manufacturers, whose market size is around Rs 3,000 to 3,500 crore, have lost nearly 40 percent of their market to cheaper Chinese toys. “The ban will help boost our share,” says AK Bansal, Chief Managing Director of the Hanung Group, which sells toys worth Rs 100 crore every year in India.

BEIJING HAD earlier objected to the ban, asking New Delhi to show prudence and restraint in using trade remedies and this could pose a threat to its bilateral trade (which touched $51 billion in 2008). Worse, trade experts and lawyers are unanimous that if China drags India to the WTO, the country may find it difficult to justify the decision because there were no details of the grounds for the ban. India should have said it was due to complaints of toxicity — and applied the same standards on domestic toy manufacturers. “This is where such appointments become crucial, because the WTO man handles a lot of contentious issues,” adds Sahai.

The problem in pharmaceuticals is equally important. The domestic generic drugs industry is in trouble since the issue is becoming a major non-tariff barrier against developing countries and the person in charge of WTO issues will have to take it headlong with other countries.

Recently, two large drug consignments of generic major Cipla were seized in the Netherlands by its customs authorities. The two drugs en route to Peru were generic versions of blockbuster medicines used in mental health — Rivastigimine and Olanzapine.

Cipla Joint Managing Director Amar Lulla, it is reliably learnt, has sought the help of the Commerce Ministry and the PMO to solve the crisis. “The global pharma market is working overtime to keep generics out. This is a serious issue and needs to be resolved. Many developing countries seek such drugs from India. The drugs, while in transit to Peru, were held at Rotterdam port because they infringed patents in the EU,” he told reporters recently in Mumbai.

This means that our man at the WTO has a full plate, and he certainly doesn’t need controversy at home, in order to be effective abroad.



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