WHEN this column is published, trade ministers from 149 member countries of the World Trade Organisation would be getting ready to meet in Geneva to save the current round of trade negotiations from collapsing. The Doha round, so called since it was inaugurated in the capital of Qatar in November 2001, is the ninth round of trade discussions since the end of the Second World War.

An attempt to launch it in 1999 was abandoned for two reasons: determined opposition mounted by a coalition of non-government organisations and unwillingness on the part of several developing countries to be herded like sheep into yet another round of trade talks.

The NGOs were against multilateral trade talks since they believed — wrongly, I think — that the process of globalisation was making transnational corporations so powerful that they could not be controlled by governments. TNCs, said the NGO community, were interested only in their profits and were concerned neither with consumer welfare nor with the interest of the workers they employed across the globe. Their employees in particular were suffering since they were being forced to work in crowded company compounds and at barely subsistence level wages. The welfare of consumers was being neglected since the TNCs showed little concern for the global environment.

Developing countries that opposed the launch of another series of multilateral trade talks did so because they believed that they had gained little from the previous round. In the series of discussions that led to the establishment of the WTO, the developed world had looked after only its own interests. In fact, rich countries had forced much of the developing world to open their economies promising them access to their markets. While developing countries obliged, access to markets in developed countries remained restricted for them. This was particularly the case for the goods and commodities that the developing world was producing.

The objections to the start of yet another round of trade talks found expression in the streets of Seattle, the city in America’s northwest that played host to the world’s trade ministers in 1999. The protesters turned violent and the trade ministers packed their bags and left without launching the “Seattle round.” They reassembled two years later at Doha, two months after the devastating attacks on the United States. It was easier for the tiny state of Qatar to shut down its borders and keep out unwelcome visitors to Doha, the capital. Few NGO activists made it to the city to launch yet another campaign against globalisation and the WTO. Trade ministers from developed countries also arrived determined to show that disparate states in the world could work together to promote the welfare of all citizens. Governments were not prepared to yield ground to the state-less terrorists who were bent upon disturbing the established world order.

The launch of a new round of trade negotiations would demonstrate that the developed and developing countries — from America, Africa, Asia and Europe, from rich and poor regions, from countries with Buddhist, Christian, Hindu and Muslim populations — could work together. It was felt important to demonstrate the need for an ordered and legal underpinning for the working of the global economy. The WTO was an important component of this evolving framework.

The Doha round, therefore, was inaugurated with expectations that it would prove beneficial to all participants in the international trading system. In order to underscore that this time the negotiations would not exclude developing countries, the WTO members agreed to call it the “development round”. The poor countries’ interests were to be given special consideration.

The developing world had four concerns. The first of these was the access to the markets of rich countries for agricultural products. For the developing world as a whole, agriculture still accounted for more than a quarter of the total output and employed more than half the workforce. This sector was of far greater importance to poor countries as opposed to rich nations where agricultural output contributed to less than five per cent per cent of combined national incomes and employed an even smaller proportion of the labour force.

Creating a level playing field for trade in agriculture would, therefore, increase global welfare. But developed countries had erected barriers to agricultural imports and also had in place elaborate systems of subsidies for the small number of people who chose to remain on the farms.

The second area of concern was trade in textiles, by far the largest component of manufacturing in the developing world. While the end of the trading regime that operated under the decades old Multifibre Arrangement (MFA) had removed the quotas on developing countries’ exports to rich nations, the latter continued to charge relatively high duties on imports. Tariffs on textile and garments imports in developed countries were three- to four-fold the average tariffs on all other imports.

However, the developing countries did not approach this issue with one voice. Countries such as Pakistan, that had comparative advantage in this industry, did not want “preferential arrangements” to govern trade. These arrangements allowed the least developed countries and other groups of small nations access to rich markets without paying high tariffs.

This privileged access had caused serious distortions not only in the conduct of trade in textiles and garments but also in the pattern of flow of foreign direct investment. FDI went to the countries in large amounts to take advantage of the export opportunities that existed because of the policies that favoured a small set of producers.

While not begrudging the development of Bangladesh’s remarkable garment industry, it would not have taken place but for the distortions introduced by trade policies in the textile sector. The same has happened in several other places including the Caribbean and Central America. The countries in this region don’t have a comparative advantage in this sector but even then many of them have become significant garment exporters.

The third area in which the developing world would like to see a review of existing policies is intellectual property rights (IPR). At the conclusion of the Uruguay round that established the WTO, developing countries agreed to police their economies against the violation of patent rights issued to individual investors as well as transnational corporations.

This issue came to a head in the pharmaceutical sector when countries such as Brazil and India developed significant indigenous industries. In the fight against Aids, the Indians, in particular, offered life-saving drugs for sale in Africa at prices that were a fraction of those charged by western companies. Should intellectual property rights be observed even when hundreds of thousands of lives could be saved? While the United States relented somewhat, the issue continues to be of concern.

There is another dimension to this issue: it is difficult to administer IPR when technology is continuously advancing. Even in the United States that has a strong set of rules and regulations to protect patent rights, music and movie companies are finding it difficult to protect their products. Even in the book publishing industry, new copying technology has made it possible to produce books at a fraction of the cost charged by booksellers. (When I recently went looking for a book in Dhaka, the bookshop owner offered to have one “made” for me if I could give him the original. He offered to do this at a fraction of the book’s cover price.) Can culture be firmly regulated is a question that has acquired considerable importance. This question needs to be comprehensively addressed in the ongoing trade negotiations.

While the three issues to which the developing world attaches a great deal of importance — access to rich countries’ markets for agricultural products, the textile trade, and the protection granted to corporations under the system of intellectual property rights — will receive attention in what is likely to be the final phase of the Doha round, the fourth issue of substance is not on the table. This concerns the movement of what in the parlance of international commerce is called “natural persons”.

This is a complex area of exchange between the developing world and rich countries; the flow is almost entirely in one direction, from the developing to the developed parts of the world. In the increasingly skill-short and labour-short developed countries this issue has begun to attract considerable attention. For instance, as the United States moves towards the next round of national elections, which will be held in November 2006, the issue of migration has acquired the type of significance not expected by political pundits.

Should the United States continue to admit the number of people that have entered the country over the last couple of decades? Since more arrived illegally or, having arrived legally did not leave the country, should these people be allowed to stay or should they be deported? If the 12 million illegal immigrants estimated to be living in the United States could somehow be deported, what would be the impact on the country’s economy? If some kind of an amnesty programme could be launched, what would be the impact of this accommodation of mostly Spanish-speaking people on American culture, education, and politics? All these are hotly debated questions.

Europe has a different set of questions about the admission of new migrants and the presence of those who have already arrived. A large number of immigrants are Muslim and in some quarters their growing influence is deeply resented. And yet there is also the recognition that without a healthy dose of migration to compensate for the sharp fall in population growth in most developed countries, this part of the world will face serious economic problems. It is only for a short time that the issue of migration can be brushed under the table and not incorporated in a larger discussion of international commerce.

Given all the outstanding problems faced by the teams of negotiators in Geneva, will the discussions begun in Doha almost five years ago reach a successful conclusion? Or will they fail? If they fail what will be the impact on the developing world? These are some of the questions for next week.

To clear its growing maintenance backlog, the National Highway Authority (NHA) has reportedly decided to pledge highway and motorway assets to a consortium of banks to raise six billion rupees in loans. Justifying the move, the NHA chairman has been quoted in the press as saying that the Authority generates only Rs5 billion annually through toll collection while maintenance costs run to Rs8 billion.

The NHA also pays a hefty Rs800 million to toll contractors, which according to the chairman himself is “higher than the internationally acceptable level.” What the chairman did not say is that most of the contractors extracting more than the “internationally acceptable level” are none other than military outfits, namely the Frontier Works Organisation (FWO) and the National Logistics Cell (NLC). He complained of higher charges but refrained from mentioning that these very contracts are awarded on a single-tender basis and without inviting bids.

This is not mere hearsay. On December 30 last year, a question was asked in the Senate about contracts awarded without tenders to the FWO since 2001. It was disclosed that out of a total of 94 contracts secured by the FWO, 37 amounting to Rs11 billion had been awarded through open tenders while 57 costing over Rs25 billion had been approved without bids. Twelve of these no-bid projects were awarded by the NHA itself at a cost of more than Rs18 billion. Yes, between 2001 and 2005, the NHA awarded over Rs18 billion worth of projects to the FWO without inviting bids.

And the justification for this seemingly special treatment? “[The] FWO is awarded contracts on a single-contract basis because of its inherent capabilities which include a disciplined work force, large pool of equipment, and administrative and financial strength,” the official reply elaborated. One would have thought that given such advantages, the FWO could easily win contracts even in open bidding. Awarding it contracts worth billions without tenders is not a measure of the FWO’s strengths but of its weaknesses. Instead of blaming the contractor, it is the NHA that must be investigated. The Senate question was listed at the bottom at serial No 156. No supplementary inquiries could be made as the question hour had ended. A potentially huge scandal thus went largely unquestioned.

It has also been argued that the FWO is preferred and given work without bids because it is capable of working in difficult terrain where ordinary civil contractors are reluctant to venture. That may or may not be true. But what is true is that the FWO also received NHA contracts for building the Lyari Expressway (over Rs5 billion) and Lahore’s Bund road (Rs551 million) as well as for maintenance of the Islamabad-Lahore motorway (Rs138 million), to name just three contracts awarded without bids. To say that no private contractor was willing to bid for these projects is offensive even to the meanest intelligence.

The NHA not only awarded toll collection contracts to the FWO but went out of its way to cancel existing private contracts and give them to the FWO and NLC. On December 26 last year, a question was asked about toll contracts in the hands of private operators. A shocked Senate learnt that two private contracts had been cancelled and awarded to the FWO and NLC. One reason given for the cancellations: “There was rough handling at toll plazas and transporters started complaining about the dealing of toll operators.”

If that was indeed the reason, why was another operator’s contract not cancelled when its men allegedly tortured and killed a bus driver on April 15, 2006, near Kamalpur on the Faisalabad Motorway? The toll operator, the FWO, initially remained silent but later admitted “a few hot words were exchanged between a plaza employee and the bus driver,” adding that “during the discussion the bus driver fell down unconscious and was rushed to the hospital but died en route.” Nothing happened and the operator continues collecting toll tax. Who will believe that the NHA is so deeply concerned about operators’ behaviour that it even cancels their contracts?

Information about toll locations on national highways and motorways and the contractors appointed for collecting such tax was obtained through a Senate question on May 31 last year. Toll tax is being collected at 54 locations on various highways and motorways. These include the N-9 superhighway, N-5 Karachi-Lahore section, N-5 Lahore-Torkham section, Lahore-Islamabad motorway and the Pindi Bhattian-Faisalabad motorway, among others. According to information placed before parliament, the toll operator at all these locations is either the NLC or the FWO.

For a long time, defence services personnel were exempt from payment of toll tax, even when travelling in private vehicles, while serving civil servants using official vehicles were not. It took a long parliamentary struggle to end the discrimination and bring defence personnel travelling in private vehicles under the toll-tax net. But even now official vehicles belonging to civil departments are required to pay tax but military vehicles are exempt. Why?

Not all is well with the NHA itself. Over two years ago, the then minister, Ahmad Ali, publicly spilled the beans about his own department and his helplessness in terms of correcting the situation. Instead of ordering an inquiry into the allegations, the minister himself was removed from his position and is now cooling his heels in the Senate.

The NHA has been allocated Rs52 billion under the PSDP in the new budget for 52 road projects in addition to Rs4 billion for development schemes. It now plans to pledge motorways to raise another Rs6 billion through bank loans which will be repaid over seven years at 2.5 per cent above the going interest rate. For the banks that will lend the money, this means a windfall of Rs150 million a year for seven honeymoon years over and above normal interest. Make hay while the sun shines.

Raising loans from favoured banks will only increase the NHA’s liabilities. That is not the solution. Instead the government ought to ensure that contracts worth billions are not doled out without open bidding and that the rates charged by toll collectors do not exceed “internationally acceptable” levels.

It should withdraw tax exemptions for all official and private vehicles whether civil or military, enforce accountability in the real sense within the NHA and make no exceptions under the questionable pretext of “honest mistakes made in good faith”, as was done in the case of the purchase of railway locomotives. Therein lies the solution.

The writer is a former senator.

SOMETIME in the next several months, US Secretary of State Condoleezza Rice or a senior colleague is likely to sit down at a negotiating table with representatives of the Islamic Republic of Iran.

As she prepares for these meetings, I suspect Rice is reviewing the most famous instance of America talking to an enemy: Henry Kissinger’s secret opening to China in the early 1970s. A new window has just opened on Kissinger’s secret diplomacy with the National Security Archive’s publication of the eyes-only memoranda summarising some of his most sensitive discussions. Reading these transcripts is a reminder that Kissinger’s diplomacy was, to use a modern expression, “outside of the box.”

As a diplomatic emissary, Kissinger was almost recklessly frank — gossiping, teasing, wheedling, flattering. In a June 1972 meeting with Chinese Premier Zhou Enlai, Kissinger described Senate Democratic leader Mike Mansfield as “monastic,” Democratic presidential candidate George McGovern as “professorial” and his own foreign policy bureaucracy as “pro-Soviet.” Even the wily Zhou was obviously charmed by Kissinger’s seeming willingness to broach any subject. It conveyed the useful sense that in the US-China opening, nothing was off-limits.

He told Zhou at one point: “We achieve secrecy by saying so much that no one knows what is true.”

Running through Kissinger’s discussions was the same fundamental tenet of foreign policy realism: Rational nations act in their self-interest. Their diplomacy is driven not by emotion or abstract moral principle or past practice but by the bedrock of mutual interest. In his discussion with Zhou, for example, Kissinger was startlingly frank about America’s willingness to subordinate Vietnam: “We believe that the future of our relationship with Peking is infinitely more important for the future of Asia than what happens in Phnom Penh, in Hanoi or in Saigon.”

I asked Kissinger last week what lessons he would draw for the new US engagement with Iran from his own diplomatic experience. Kissinger said he didn’t want to give public advice to Rice, but he said that as a general proposition, the United States should seek to find common security interests with Iran — stressing that a strong and prosperous Iran doesn’t threaten the United States so long as the Iranians refrain from reckless and destabilising actions.

“Iran has to take a decision whether it wants to be a nation or a cause,” Kissinger explained. “If a nation, it must realize that its national interest doesn’t conflict with ours. If the Iranian concern is security and development of their country, this is compatible with American interests.” If Iran connected with the global economy, he argued, it could soon become a regional economic powerhouse, comparable to South Korea.

Kissinger noted that America’s good relations with Iran while he was secretary of state during the early 1970s were based on US national interest rather than on the personality of the Shah or the domestic political system in Iran. “There is no rational reason why America should be a threat to the national security of Iran,” he said. “It is in our interest to have a stable country and a prosperous country. If it went in the direction of South Korea, that would be in our interest.” But he cautioned: “If the Iranian interest is to destabilise the region, then it will be difficult to come to an agreement.”

On the nuclear issue at the heart of the US-Iran dialogue, Kissinger argued that the Iranians must recognize that nuclear proliferation threatens their own security as much as that of the United States or Israel. Wherever the nonproliferation line is drawn, it will seem unfair to countries that don’t yet have the bomb, he said. “But if the process isn’t stopped, it threatens every country, including the proliferators.”

Thinking about Kissinger’s opening to China, it seems to me that one clear lesson for the Bush administration is that it shouldn’t be overly cautious in its engagement with Iran. It’s time to talk, and if the Iranians will agree to the West’s appropriate precondition that they halt enrichment of uranium, then all issues should be on the table. You can’t have an opening that’s constricted. What’s needed is a broad discussion of whether the security interests of Iran and those of the United States and its allies can be linked.

Here’s the pitch that you can imagine Kissinger making: Iran’s hopes of becoming a major power can be achieved only by halting its nuclear programme and working with the United States to stabilise Iraq and the wider Middle East. I hope Secretary Rice is preparing a similar presentation. If that seems like an impossible goal, think how far China has come in the few decades since Zhou was coaxed and cajoled by Henry Kissinger. —Dawn/Washington Post Service