THERE is a reason why I am returning to the subject of international trade and its consequences for Pakistan. I have contributed columns on this subject before but a number of developments have taken place recently that warrant another discussion in this space. It appears increasingly difficult that the countries negotiating the current WTO Doha round will be able to meet the deadline imposed by the United States’ legislative system.

The authority granted by US Congress to the country’s president to negotiate a trade deal will expire in July 2007. Under this authority, the president can present trade treaties to Congress for an up or down vote. To meet the deadline, the president must conclude a treaty under the Doha round no later than December 2006 for it to be ratified in time.

This may be a difficult timetable to follow. Given the tight schedule and the fact that there are still major differences in negotiating positions, there is some indication of loss of interest on the part of Washington in the trade talks. The recent high level changes in the Bush administration resulted in the move of Rob Portman from the position of US trade representative. He was appointed director of the office of budget management. In his place, President Bush appointed Susan C. Schwab, until recently a relatively junior functionary in the administration. These changes may come in the way of further movement on Doha round. What will happen if the Doha round collapses?

This question has two answers for Pakistan. One will depend on how the South Asia Free Trade Area (Safta), scheduled to enter the tariff-cutting phase on July 1, 2006, unfolds. If the full potential of Safta is realised, the collapse of the Doha round would not have a significant impact on Pakistan. However, if the agreement results in not much growth in intra-regional trade, Pakistan will see its prospects reduced in international markets if the Doha round yields no results.

The multilateral trading system is like a bicycle. It must be propelled forward or else it will fall, bringing down with it its hapless rider. The system was kept on a reasonably even keel by a series of negotiations called the “trade rounds” since it was launched immediately after the conclusion of the Second World War. Initially, the rounds involved rich industrial nations and the focus was on reducing the level of tariffs on trade between them. There were two principles on the basis of which much progress was made. These pertained to “reciprocity” and the “most favoured nation.”

Reciprocity meant that all concessions would involve the parties engaged in trade; if one side agreed to lower the wall of tariff against imports, it would expect reciprocity from the trading partner. The term “most favoured nation” meant the opposite of what the term seems to imply. All trading nations would have the same status; there would not be any favoured nation or nations. For instance, if the United States gave a concession to Britain, it would have to provide it to all other countries with which it traded.

For obvious reason, these two principles could not be extended to the developing world. As the tariff walls were lowered among the countries of the developed world, they were prepared to grant “non-reciprocity” to poor countries. For most of their exports, these countries would receive the same treatment as afforded to rich countries. They would, in other words, be able to enjoy the same benefits developed countries gave one another. However, in return the developing world could maintain higher tariffs against imports. During this phase of development, they were not expected to reciprocate.

Economists were prepared to develop a theoretical construct to justify this departure from the expected norm of behaviour. Under their “infant industry” argument, the developing countries were allowed to maintain a much higher wall of tariff while enjoying the benefit of easier access to the markets of rich countries. This comfort was to be available for a short period of time; once the industrial structures in the developing world matured, they were expected to be governed by the same rules of the trading game as those applied to developed states.

Two further departures were made to the rule-based system of multilateral trade, one in favour of rich nations, the other in favour of a select group of developing countries. In return for “non-reciprocity,” the developing world agreed to something called the multi-fibre arrangement, the MFA, which permitted developed countries to institute a system of quotas for textile imports from poor nations. This was the developed countries’ version of the infant industry argument but it reversed the principle under which poor countries were allowed to protect their industries. Non-reciprocity permitted developing countries to protect their infant industries; the MFA quota system allowed rich countries to protect their mature industries.

Europe, Japan and North America argued that they needed some time before they could fully open their market to developing countries exports of textiles and garments. Those were the product lines in which poor countries, because of an abundant supply of cheap labour, had a clear comparative advantage. If, for these products, the levels of tariffs were lowered to those for other industrial items, exports from poor countries would destroy the industries in rich nations. They needed some time for making adjustments. The MFA lasted for almost three decades — far beyond the original time framework. It was removed from the trading books only on January 1, 2005.

The other departure was to divide the developing world into two parts, the “least developed countries” (LDCs) and the rest. The LDCs were allowed even lower tariffs on their exports than those available to other countries. They were sometimes allowed to bypass the quota system. This created a formal structure of developing countries; the words “developing” and “least developed” acquired a formal meaning, which were embedded in international laws and treaties. If a country was “developing,” it was allowed one set of incentives in the trading system; if the country was “least developed,” it could add on several more concessions to the incentives that other parts of the developing world enjoyed.

Developing countries spent a fair amount of political capital in maintaining one category or other for themselves. Even countries such as Israel and South Korea did not want to dispense with the description of “developing.” Countries such as Bangladesh, which had done reasonably well over the last quarter century, continued to work hard in order to retain the designation of “least developed.”

It is now generally accepted that the previous round of trade negotiations produced very few benefits for the developing world, particularly for those that were least developed, or relied on labour-intensive exports, or continued to depend on agriculture for a significant proportion of their gross domestic product. In fact, several economists and analysts have argued that the distortions produced by the MFA system as well as the unwillingness on the part of the Europeans, the Japanese and the North Americans to eliminate subsidies for the agricultural sector did more harm to the developing world than the benefits provided by easier access to the markets in rich countries.

For these reasons developing countries worked hard to get rich nations to focus on their situation while negotiating the Doha round. In the meeting held at Doha in November 2001, Europe, Japan and North America agreed to bring about significant adjustments in their economic and trading systems in order to provide larger and accessible markets for the low income producers of agricultural and simple manufactures. It is with this expectation that a number of developing countries have participated vigorously in the Doha round.

Promises made at Doha notwithstanding, developed countries have moved very little in terms of dismantling the elaborate system of subsidies they have created over time for maintaining a small proportion of their populations on the farms. The protected and subsidised farming sectors in the developed world have reduced the ability of poor farmers in developing countries to produce for export. This is particularly the case for commodities such as sugar and cotton, in which developing countries have a distinct advantage.

Not only do the developed countries subsidise agriculture, they also have a number of rules and regulations concerning health standards that must be met by producers before they can enter their market in agricultural products. Some of these regulations are genuine in the sense that they aim to protect citizens against diseases that could result from contaminated or infected products. Nonetheless, some of the regulations fall under the category of non-tariff barriers. They are in place simply to protect the domestic farmers against imports from the developing world.

In a previous article (January 7, 2006), I discussed the outcome of the ministerial meeting in Hong Kong held in December 2005 to move towards the conclusion of the Doha round. However, little progress was made. And not much has been achieved since the meeting in Hong Kong. Agriculture has become the most contentious issue, largely because of the differences in the positions adopted by the Europeans and the United States.

Washington argues that the best way of helping the developing world and to keep the promise made at Doha is to slash agricultural tariffs. It has proposed to cut them down by about two-thirds while leaving a small number of “sensitive” items exempt from such reductions. The Europeans, whose farmers are used to extensive government protection and are loathe to lose them, have put on the negotiating table a proposal that would reduce tariffs by about 40 per cent, while maintaining a large list of sensitive items. An alliance of developing countries including Brazil, India and South Africa have taken a position somewhere in between these two.

The Europeans want only small changes in the “common agricultural policy” they have in place to protect their small farming community. The numbers may be small but the farmers carry a large political clout particularly in France which has indicated that it would not be prepared to accept concessions made by the European Union that violate the interests of its farmers. Under the European system, trade matters are the responsibility of Brussels. But an approach that brings about marginal changes is not acceptable to Washington and to the developing world.

As she prepares for the make-or-break meeting in Geneva later this month, Susan Schwab said that “the disheartening thing is that there are a number of countries that think that some minimalist outcome is going to be satisfactory. But that is not an outcome that will be satisfactory to the United States.” What will happen if the Doha talks fail; what will be the impact of this failure for Pakistan; could a successful Safta produce results for the country it hopes to achieve through the multilateral process? I will address these questions over the next several weeks.

THE establishment view as well as public opinion in Pakistan is that the main threat to Pakistan is from India. After all, some Indian leaders did make irresponsible statements about Pakistan being a temporary phenomenon in 1947.

Even now, leaders of the extremist Rashtriya Swayamsevak Sangh use belligerent rhetoric against Pakistan that may be only for internal consumption but which does cause anxiety in Pakistan.

Soon after Pakistan gained independence, India positioned its army on the frontiers of the new state. Then, the Pakistani public believes that it was India that dismembered Pakistan in 1971. India also developed nuclear capability as early as 1974 and is seen as the aggressor in Kashmir and Siachen in Pakistan. With this history, it is no wonder that India is seen by the people as the greatest external danger to Pakistan.

What is generally not appreciated is that all governments in India, including that of the Bharatiya Janata Party, have actually avoided wars with Pakistan, not as a favour to Islamabad but because modern warfare is costly, messy and one can never really win. Determined members of the public commence guerilla activity to defeat an aggressor. This was true even before Pakistan developed nuclear weapons. Indeed, while nuclear weapons can turn any war into defeat for both countries, guerilla action can ensure that nobody would actually try and conquer a country as big as Pakistan.

But the history of Pakistan-India wars does not entirely bear out the charges of Indian aggression. Pakistan has repeated one basic strategy — covert resistance in Kashmir, to wrest the state away from India. One variation of this basic strategy was to keep the pressure on India by sending armed fighters, generally recruited from religious groups, in an attempt to bring India to the negotiating table.

This strategy was dangerous for Pakistan. It actually resulted in the 1965 war while during the Kargil period (1999), it almost brought about a nuclear confrontation. The low-intensity proxy war gave a bad image to Pakistan and in December 2001 we again started sliding towards confrontation.

Under the circumstances, it was General Musharraf’s abandonment of this policy which pulled us back from the brink. The question which now remains is whether this reversal of previous policy is merely tactical or strategic, temporary or permanent? One hopes it is the latter because, while no rational Indian government will risk an all-out war with Pakistan, such undeclared and covert conflicts have a way of spiralling out of control. The danger to Pakistan is the commitment to such policies by sections of the public and the decision-makers, and not a sudden bid for conquest of Pakistan by India.

The greatest danger to Pakistan is that the public will be divided over the government’s changed policy on Kashmir. It will assume that General Musharraf is not hawkish enough because of American pressure. This will divide us in the face of possible danger. If Pakistan is to be served through peace, the public should really support the government.

Unfortunately, all the governments of Pakistan have created hawkish views about Kashmir among the citizens. The rhetoric of belligerency remains in place even today as seen in school and college textbooks and radio and television programmes. So, successive governments find themselves prisoners of their past policies. This makes any real settlement of the Kashmir problem — such as dividing it along religious lines, or letting it have its independence from both Pakistan and India — very difficult to bring about. The public at once rises up to accuse the government of treason if such solutions are suggested. This attitude, then, is Pakistan’s greatest danger.

The other danger is from the US, or, rather, from the neo-conservative, neo-imperialistic policies of its present rulers. Once again, when the US attacked Afghanistan, General Musharraf exercised the only sensible option. He supported the US and abandoned the Taliban. But, unfortunately, this decision has also proved divisive. As in the case of the changed policy towards India, the changed policy towards the Taliban has also polarised opinion in Pakistan. Large sections of the people in the Federally Administered Tribal Areas and in the religious lobby oppose this policy.

Possibly some powerful sections in the military, the intelligence agencies and the bureaucracy also oppose it. This opposition is the result of a world view which was nourished for decades by the most powerful sections of the establishment. Islam, the concept of ‘strategic depth’ and antagonism to communism were all evoked to support the Taliban and the creation of religiously motivated private armies which are now the enemies of General Musharraf as well as the US.

But there are other aspects involving America that Pakistan cannot overlook. The US has created a lawless and volatile situation in Iraq and embittered the Palestinians and a defiant Iran. If Iran is attacked instead of being engaged, Pakistan will be in real danger. To support the US on this would be to invite rebellion from one’s own people, especially the religious parties. Not to support it would make the US abandon all pretence of civility and tighten the screws on Pakistan on the pretext of nuclear proliferation, state failure, etc.

Similarly, as the situation in Iraq and Palestine gets out of hand, Pakistan will find it increasingly embarrassing to support the US, especially if the latter openly woos India. Once again, all policy options regarding the US will only deepen divisions in Pakistani society.

The real danger, then, is the polarisation of opinion in Pakistan. Allied to this is the ‘captivity syndrome’ or being unable to be flexible in policy options because of public opinion. The external dangers, then, have internal dimensions. And these, one feels, are the real dangers to the country.

THE urgency of halting the proliferation of nuclear weapons, and moving toward their elimination, could hardly be greater. Failure to do so is almost certain to lead to grim consequences, even the end of biology’s only experiment with higher intelligence. As threatening as the crisis is, the means exist to defuse it.

A near-meltdown seems to be imminent over Iran and its nuclear programmes. Before 1979, when the Shah was in power, Washington strongly supported these programmes. Today the standard claim is that Iran has no need for nuclear power, and therefore must be pursuing a secret weapons programme. “For a major oil producer such as Iran, nuclear energy is a wasteful use of resources,” Henry Kissinger wrote in the Washington Post last year.

Thirty years ago, however, when Kissinger was secretary of state for President Gerald Ford, he held that “introduction of nuclear power will both provide for the growing needs of Iran’s economy and free remaining oil reserves for export or conversion to petrochemicals”. Last year Dafna Linzer of the Washington Post asked Kissinger about his reversal of opinion. Kissinger responded with his usual engaging frankness: “They were an allied country.”

In 1976 the Ford administration “endorsed Iranian plans to build a massive nuclear energy industry, but also worked hard to complete a multibillion-dollar deal that would have given Tehran control of large quantities of plutonium and enriched uranium — the two pathways to a nuclear bomb”, Linzer wrote. The top planners of the Bush administration, who are now denouncing these programmes, were then in key national security posts: Dick Cheney, Donald Rumsfeld and Paul Wolfowitz.

Iranians are surely not as willing as the West to discard history to the rubbish heap. They know that the United States, along with its allies, has been tormenting Iranians for more than 50 years, ever since a US-UK military coup overthrew the parliamentary government and installed the Shah, who ruled with an iron hand until a popular uprising expelled him in 1979.

The Reagan administration then supported Saddam Hussein’s invasion of Iran, providing him with military and other aid that helped him slaughter hundreds of thousands of Iranians (along with Iraqi Kurds). Then came President Clinton’s harsh sanctions, followed by Bush’s threats to attack Iran — themselves a serious breach of the UN charter.

Last month the Bush administration conditionally agreed to join its European allies in direct talks with Iran, but refused to withdraw the threat of attack, rendering virtually meaningless any negotiations offer that comes, in effect, at gunpoint. Recent history provides further reason for scepticism about Washington’s intentions.

In May 2003, according to Flynt Leverett, then a senior official in Bush’s National Security Council, the reformist government of Mohammad Khatami proposed “an agenda for a diplomatic process that was intended to resolve on a comprehensive basis all of the bilateral differences between the United States and Iran”.

Included were “weapons of mass destruction, a two-state solution to the Israeli-Palestinian conflict, the future of Lebanon’s Hizbullah organisation and cooperation with the UN nuclear safeguards agency”, the Financial Times reported last month. The Bush administration refused, and reprimanded the Swiss diplomat who conveyed the offer.

A year later the European Union and Iran struck a bargain: Iran would temporarily suspend uranium enrichment, and in return Europe would provide assurances that the United States and Israel would not attack Iran. Under US pressure, Europe backed off, and Iran renewed its enrichment processes.

Iran’s nuclear programmes, as far as is known, fall within its rights under article four of the non-proliferation treaty (NPT), which grants non-nuclear states the right to produce fuel for nuclear energy. The Bush administration argues that article four should be strengthened, and I think that makes sense.

When the NPT came into force in 1970 there was a considerable gap between producing fuel for energy and for nuclear weapons. But advances in technology have narrowed the gap. However, any such revision of article four would have to ensure unimpeded access for non-military use, in accord with the initial NPT bargain between declared nuclear powers and the non-nuclear states.

In 2003 a reasonable proposal to this end was put forward by Mohamed ElBaradei, head of the International Atomic Energy Agency: that all production and processing of weapon-usable material be under international control, with “assurance that legitimate would-be users could get their supplies”. That should be the first step, he proposed, toward fully implementing the 1993 UN resolution for a fissile material cutoff treaty (or Fissban). ElBaradei’s proposal has to date been accepted by only one state, to my knowledge: Iran, in February, in an interview with Ali Larijani, Iran’s chief nuclear negotiator. The Bush administration rejects a verifiable Fissban — and stands nearly alone. In November 2004 the UN committee on disarmament voted in favour of a verifiable Fissban. The vote was 147 to one (United States), with two abstentions: Israel and Britain. Last year a vote in the full general assembly was 179 to two, Israel and Britain again abstaining. The United States was joined by Palau. There are ways to mitigate and probably end these crises. The first is to call off the very credible US and Israeli threats that virtually urge Iran to develop nuclear weapons as a deterrent.

A second step would be to join the rest of the world in accepting a verifiable Fissban treaty, as well as ElBaradei’s proposal, or something similar.

A third step would be to live up to article six of the NPT, which obligates the nuclear states to take “good-faith” efforts to eliminate nuclear weapons, a binding legal obligation, as the world court determined. None of the nuclear states has lived up to that obligation, but the United States is far in the lead in violating it.

Even steps in these directions would mitigate the upcoming crisis with Iran. Above all, it is important to heed the words of Mohamed ElBaradei: “There is no military solution to this situation. It is inconceivable. The only durable solution is a negotiated solution.” And it is within reach. — Dawn/Guardian Service

The writer is professor of linguistics and philosophy at the Massachusetts Institute of Technology.