Policy makers and academics relate to each other in complex ways, and sometimes they do not relate at all, says Diana Tussie in ‘ The Politics of Trade: The role of research in trade policy and negotiation ’ ( >www.idrc.ca ). There have always been those in policy circles who are aloof to the products of research and who go about their business with only some evidence gathering along the way in a mostly do-it-yourself fashion, she observes.
“By the same token there have always been academics quite content in their ivory towers, working in priest-like fashion at their intellectual constructions regardless of the world beyond or the policy implications of their research.”
Thankfully, however, the once-pervasive segregation between policy and research is now fast retreating, as the ideological cleavages and paradigm wars of yesteryear began to subside and trade liberalisation has become enshrined as a development model in itself, the author notes.
She reminds that policy change involves cognitive maps, the articulation of a vision and of its companion instruments, as well as an understanding of the ways to make them viable. “Research creation and deployment are of growing importance in the drawn-out contest of trade negotiations where competing agendas are at stake. After all, trade policy and negotiations are about who gets what and how.”
Agreements with Sri Lanka and Nepal
One of the chapters included in the book is about ‘trade facilitation in India,’ written by Abhijit Das. He cites the ‘surge in imports from Sri Lanka and Nepal’ as a consequence of basing trade policy on inadequate research. “Since the 1990s, India has allowed duty-free imports of primary products from Nepal. However, alcoholic beverages, perfumes, cosmetics, cigarettes, and tobacco were excluded from the zero-duty access regime. It is not entirely clear whether the products were chosen for exclusion after any detailed study,” begins the discussion.
From 1999, Indian industry started complaining about adverse impact of the increased imports of certain products such as acrylic yarn, zinc oxide, copper products, and vanaspati (vegetable fat used as a butter substitute), Das recounts. He adds that in order to address the concerns of its domestic industry, in 2000-01 India had to expend considerable resources and diplomatic capital to renegotiate the agreement with Nepal.
In the case of Sri Lanka, there is the ISFTA (India-Sri Lanka Free Trade Agreement), signed in December 1998 and effective from March 2000, an agreement under which both countries are committed to the elimination of tariffs in a phased manner. India completed its commitment of reducing its duty to zero in March 2005, except for 429 items appearing on the so-called negative list of excluded items; the selection process, however, for those 429 products is not clear, the author informs.
“Certain segments of the Indian domestic industry have raised serious concerns on the adverse impacts of preferential imports from Sri Lanka, which appear in some cases to be well grounded and supported by facts.”
A key lesson from these examples, as Das argues, is that inadequate research on the likely impact of tariff concessions on trade, output, and employment can result in trade policy decisions that can be modified only at considerable diplomatic cost. Both these experiences underscore the need for detailed research before entering into FTA commitments, he concludes.
Recommended study.
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