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latter no longer leads naturally to the former, given the specialised training and significant financial investment not to speak of connections and patronage needed to make it to the top levels of Indian cricket. Stars become superstars through media-magnification, and they act as beacons for millions of others who think they are playing the same game. More important, stars and superstars are all subordinated to the logic of money-making which is the primary objective of the enterprise in the first place. Power and impunity are added to money because of the eagerness of politicians to exploit the popular appeal of the game and its stars.

Connectedness and Separation

It is the combination of connectedness and separation between these two games that produces the familiar contradictions of Indian cricket. Passionate public involvement in fixtures featuring the national side, or extravaganzas like the Indian Premier League contrasts with the orphaning of domestic cricket, with even high quality

Ranji matches going unnoticed. Professionalisation of players and standardisation of skill levels as against utterly feudal and corrupt forms of institutional management. And so on. There are also the confounding moments when both games meet the euphoria of ordinary people over the World Cup victory is only the most spectacular instance. The links are also visible in street cricket and the extent to which it has benefited from the free coaching provided by television. You see many more elbows raised classically high in compact defence, many more bowling actions that are clean and efficient, and most noticeably, a massive increase in prestige for those who excel as fielders. All this still does not begin to explain why cricket should be seen as mirroring the nation, why it is so prone to jingoistic annexation. Prominent players from all the three south Asian semi-finalists have made statements linking the game to patriotic events and issues. Easily the most extravagant are those by Gautam Gambhir (who dedicated the victory to the victims of

26/11) and Kumara Sangakkara (who said that his teams victory would honour those who had laid down their lives for the country). Countless advertisements exploit the same link, the crassest being the one that shows Dhoni and a female model riding a bike to hand over an Indian flag to some army men in a truck. Clearly, cricket invokes the feel-good nation we wish for and is useful precisely to console us in our intimate knowledge of the nation that we inhabit in reality. But to say this is only to restate the question: Does the representational aspect of cricket depend in some way on the relationship between the popular and the commercial games? Will we see and feel cricket differently if this relationship is severed, or if it shrivels significantly? To these unanswered questions let me add another as a final disruptive afterthought: What if the unknown person on the flight from London to Dubai who shook my hand at Indias semi-final victory was actually a Pakistani offering his congratulations to an Indian?

India and RTAs: Getting Tangled in the Noodle Bowl

Parthapratim Pal

India has been embracing regionalism in a big way in recent years. Regional trade agreements are growing not only in number but also in their depth and coverage, thus diverting a significant portion of Indias trade through the preferential route. Such a trade promotion strategy emphasises market access rather than deal with supply-side efficiencies.

Parthapratim Pal ([email protected]) teaches at the Indian Institute of Management, Kolkata.

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nternational trade is going through troubled times. World trade is still recovering from the big slump it experienced in 2008-09 and the Doha round of negotiations at the World Trade Organisation (WTO) has not shown any major progress for quite a few years. The financial crisis has made matters worse for the WTO trade talks as there is an apparent shift of emphasis from export-oriented growth. Both in mainstream academics as well as among policymakers there seems to be a realisation that very high levels of export orientation can be problematic for countries.1 Along with this, the fiscal stimulus-driven economic recovery has prompted many countries to use protectionist policies to prevent leakage of their domestic demand. To beat these protectionist trends, some countries are increasingly resorting

to exchange rate management to help their exports. There is growing apprehension that these measures may lead to currency wars among some countries (Economic Times 2010). The real danger for the multilateral trading system is that such uncooperative behaviour in the currency market may spill over and affect the Doha round of trade talks. However, amidst all these uncertainties and problems, the proliferation of regional trade agreements (RTAs) continues unabated. The WTO maintains a database of the RTAs which have been formally notified to it. The database shows that since the launch of the Doha round in 2001, 134 new RTAs have come into force and among them as many as 46 were notified to the WTO between 2008 and March 2011. Large numbers of RTA negotiations are also going on among countries. The financial crisis and related problems do not seem to have curbed the enthusiasm for RTAs, which are growing not only in terms of numbers but also in their depth and coverage. Most modern RTAs aim for deeper levels of integration and cover a much wider range of issues than what is covered

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under the WTO. These agreements may include regulations on environment, labour and investment. The World Bank (2005) estimates that on average, each WTO member was part of six RTAs and 40% of the total global trade took place among the preferential trade partners. Given the continued proliferation of RTAs since 2005, these numbers can only go up.

Taking the Preferential Route

India has also embraced regionalism in a big way. India has been a part of the Bangkok Agreement signed in 1976 and a south-south preferential trade agreement (PTA) under the Generalised System of Trade Preferences (GSTP) scheme of the United Nations Conference on Trade and Development (UNCTAD) signed in 1989. Since the establishment of the WTO, India
Table 1: Indias Top 20 Export Destinations in 2009-10
Exports Share in Total (Rs 000 Crore) Exports (%)

and Kuwait), Thailand, Malaysia, Indonesia, Canada, Australia and New Zealand. Along with the FTAs/PTAs, India is also pursuing deeper integration with some other countries through comprehensive economic cooperation agreements (CECAs). These agreements are more broad-based than FTAs and they may include areas like investment, services and other forms of economic cooperation. Between 2009 and 2011, India signed CECAs with Finland, Association of South East Asian Nations (ASEAN), Japan, Korea and Malaysia. A major trade and investment agreement with the European Union is presently under negotiation. India is also part of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC). The ministry of commerce website also indicates that an FTA with
Status of Preferential Agreement (not including GSTP and the Bangkok Agreement Countries)

European Union UAE US China Hong Kong Singapore Saudi Arabia Japan Indonesia Malaysia Bangladesh Brazil Sri Lanka South Africa Israel Taiwan (Taipei) Iran Vietnam Thailand

159.21 113.35 92.42 54.71 37.30 35.95 18.55 17.14 14.60 13.50 11.50 11.36 10.29 9.75 9.29 8.81 8.81 8.67 8.23

18.83 13.41 10.93 6.47 4.41 4.25 2.19 2.03 1.91 1.73 1.60 1.36 1.34 1.22 1.15 1.10 1.04 1.04 1.03 0.97

Bilateral Trade and Investment Agreement under negotiation Part of Indo-GCC RTA Proposed RTA (but not much progress) Signed CECA Part of Indo-GCC RTA Signed CECA Signed CECA Part of Indo-ASEAN RTA, separate RTA also under negotiation Part of Indo-ASEAN RTA, separate RTA also under negotiation Part of SAFTA, BIMSTEC, separate trade deal also Part of the Indo-MERCOSUR RTA Part of SAFTA, BIMSTEC, separate RTA also Part of India- Southern African Customs Union RTA

Korea Republic (South) 16.13

Part of Indo-ASEAN RTA Part of Indo-ASEAN RTA, BIMSTEC, separate RTA also under negotiation

to form RTAs account for more than 60% of Indias exports and close to 60% of its imports. Table 1 shows data for Indias top 20 export destinations for 2009-10 and their status of engagement in regional trade with India. It is evident from the data that India is trying to forge trade (and investment) deals with most of its major trading partners. The notable exceptions to this are Israel, Taiwan and Iran and it is most likely that political factors are constraining India to form trade deals with these countries. The only other major exception has been the United States (US). So far India has not initiated a PTA with the US. One possible reason could be that India still has controls on its capital account and one of the pre-conditions imposed by the US on its preferential trade and investment partners is the abolition of capital controls. The rationale for Indias drive to form so many preferential trade and investment agreements has been articulated in a strategic plan paper posted on the ministry of commerce website (MOC 2011). The paper points out that the basic objective of the ministry is to double Indias exports of goods and services by 2014 with a long-term objective of doubling Indias share in global trade by the end of 2020 through appropriate policy support (ibid: 1). And to attain this goal, expanding market access through FTAs has been highlighted as one of the most important strategies of export promotion. As stated in the paper, the efforts towards successful conclusion of Free Trade Agreements (FTAs) with our important partners would receive utmost attention (ibid: 3).

Source: India Trades database by CMIE and ministry of commerce website on Indias Trade Agreements (http://commerce.nic.in/ trade/ international_ ta. Asp? id=2&trade=i).

Supply-side Issues, Trade Deficit

The emphasis on higher market access through the formation of trade blocks raises certain questions. India presently has a market share of 1.3% in global merchandise trade. Given such a low share it is unlikely that demand-side factors are becoming a major constraint for Indias export growth. In fact, the strategy paper carries out a SWOT (Strength-Weakness-OpportunityThreat) analysis for export growth. Not surprisingly, demand-side factors do not figure at all in the list of Weaknesses and Threats. Among Weaknesses, the factors
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has signed trade agreements2 with south Asian countries (South Asian Free Trade Agreement or SAFTA), MERCOSUR (Brazil, Argentina, Uruguay and Paraguay), Chile, Afghanistan, Bhutan, Sri Lanka, Nepal and Bangladesh (the last four are separate agreements and these are in addition to the SAFTA). Free trade agreement (FTA) negotiations are on with more countries including the Gulf Cooperation Council (GCC, members include United Arab Emirates, Bahrain, Saudi Arabia, Oman, Qatar

China is in the pipeline.3 However, reports suggest that the Indian industry is vehemently against an FTA with China and therefore the prospect of an IndoChina FTA seems quite bleak. From the above list it is quite evident that once these agreements are signed, a significant portion of Indias foreign trade will be diverted through the preferential route. A look at Indias trade partners for 2009-10 shows that the countries with which India already has RTAs or is trying
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which are highlighted are: (i) major infrastructural deficit in terms of power, ports, roads, railways, (ii) lack of state of the art technology in many manufacturing sectors, (iii) low investments in R&D, (iv) low literacy levels and generally poor quality of technical education (except in a few colleges), (v) low productivity and high morbidity burden on labour, (vi) high transaction costs and cost of lending, (vii) red tape and procedural delays (including in the judicial proceedings), and (viii) corruption. In Threats to Indian exports, it points out high productivity and better infrastructure in China and the emergence of low-cost competitors like Bangladesh and Vietnam. If demand-side factors do not figure in the list of top weaknesses and threats then one wonders why so much importance is given to market access-related issues in Indias trade promotion strategy. The SWOT analysis of the strategy paper clearly shows that supply-side inefficiencies are the major constraining factors for Indias export growth. In that case more energy and resources should be diverted towards solving those problems. Blocking up resources and personnel in long and complicated FTA negotiations may be premature unless Indian exports become sufficiently efficient to take advantage of the existing and future market access. It is worth remembering here that FTAs do not open up any new markets for India in the partner countries. 4 They only allow India to face a lower tariff rate than the most favoured nation (MFN) rate in the partner countries. Second, even if one assumes that access to preferential markets will help Indias exports, the strategy paper seems to be completely silent on what will happen to Indias imports. The logic behind the push for doubling of exports is that higher exports can add to the aggregate demand of the economy and can lead to higher growth, higher employment and improved efficiency through better utilisation of resources. However, FTAs are essentially reciprocal agreements for the reduction of trade barriers. While India will get preferential access in the markets of its partner countries, the partner countries will also have to be given preferential access to Indias markets. Therefore, there is a very
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high possibility that imports will also increase. If imports increase more than exports, the trade balance will be negative and in that case it will not add to the effective demand of the economy. Here it is
Table 2: Indias Trade Balance with Some of Indias Top Trade Partners (Rs 000 crore)
Exports Imports Trade Balance

European Union UAE China Singapore Saudi Arabia Japan Korea Republic (South) Indonesia Malaysia Bangladesh Brazil Sri Lanka South Africa Vietnam Thailand All

159.21 113.35 54.71 35.95 18.55 17.14 16.13 14.60 13.50 11.50 11.36 10.29 9.75 8.67 8.23 502.95

173.19 91.80 146.05 30.62 80.66 31.89 40.55 41.01 24.49 1.21 16.26 1.85 26.90 2.46 13.89 722.84

-13.99 21.55 -91.33 5.32 -62.11 -14.75 -24.42 -26.40 -10.99 10.30 -4.90 8.44 -17.15 6.21 -5.66 -219.88

These are countries with which India already has RTAs or is negotiating RTAs. This list is drawn from the top 20 export markets of India in 2009-10. Source: Same as Table 1.

important to highlight that in Table 1, there are 15 countries with which India either has an FTA or is negotiating one. India runs a trade surplus with five of these countries and a trade deficit with the other 10. Overall, India runs a big trade deficit with these 15 countries (Table 2). There is no reason to believe that reciprocal tariff liberalisation of FTAs will change the trade pattern in a way that Indias trade deficit will be reduced.

In fact, there are reasons to believe the contrary. Table 3 shows the tariff rates of the countries discussed in Table 2. In most of Indias big export markets, the MFN tariff rates are lower than in India. Hence any reciprocal reduction of tariff rates may also open up the Indian market. This may have a negative impact on Indias trade balance vis--vis these countries. Table 3 also indicates that as the level of tariff in bigger markets is generally low; preference margins will not be high enough to create remarkable differences in market access for Indian exporters.5 It can also be argued that higher imports may also help efficiency through trade creation. This takes place when due to the formation of the regional agreement, RTA members switch from inefficient domestic producers and import more from efficient producers from other members of the RTA. In this case, efficiency gains arise from both production efficiency and consumption efficiency. In textbook theory, the assumption of full employment ensures that trade creation does not decrease employment by assuming that resources freed up in the domestic import competing sector will be employed in the export sector. However, such smooth transfer of factors of production is not possible in a developing country like India and any improvement in efficiency due to trade creation will have to be weighed against the utility loss arising out of

Table 3: Tariff Rates for Countries in Table 2 Comparison with India (MFN Applied Rates, latest year available)
Rank Simple Average Tariff (in %) All Products Agriculture Non-Agriculture Trade-Weighted Average Tariff (in %) All Products Agriculture Non-Agriculture

10 Bangladesh 11 Brazil 3 China 1 European Union 8 Indonesia 6 Japan 7 Korea Republic (South) 9 Malaysia 5 Saudi Arabia 4 Singapore 13 12 15 14 South Africa Sri Lanka Thailand Vietnam India

14.7 13.6 9.6 5.3 6.8 4.9 12.1 8.4 4.8 0.0 7.7 11.2 9.9 4.9 10.9 12.9

17.6 10.2 15.6 13.5 8.4 21.0 48.6 13.5 5.9 0.2 8.9 24.8 22.6 6.8 18.9 31.8

14.3 14.1 8.7 4.0 6.6 2.5 6.6 7.6 4.7 0.0 7.5 9.2 8.0 4.7 9.7 10.1

9.2 8.8 4.3 2.9 4.1 2.0 8.3 6.3 4.6 0.0 5.0 7.8 4.3 4.2 6.5 6.0

5.4 10.6 10.3 9.8 4.3 12.5 119.8 16.7 6.9 1.4 10.0 19.9 12.5 7.9 9.9 13.7

10.8 8.7 4.0 2.4 4.1 1.2 3.3 5.6 4.2 0.0 4.7 6.0 3.9 4.0 6.3 5.8

2 UAE

The rank of the country is in terms of value of Indias exports to these countries. This is not an absolute ranking but a relative ranking for the 15 countries presented here. Source: World Tariff Profile 2010, WTO.

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possible loss of employment in the import competing sectors.

Whither Multilateral Trade?

A look at Indias recent engagement in FTAs/CECAs/CEPAs shows that India is also engaging with other developed countries for preferential access. Indias traditional approach has focused on forming south-south trade relations through agreements like the GSTP or the Bangkok Agreement. However, north-south agreements are generally more problematic. In most cases provisions of north-south RTAs go well beyond the WTO rules and are likely to impose higher levels of restrictions on the developing countries. It will also force countries to adopt more market friendly measures in areas such as investment and intellectual property rights (IPR) issues. As the UNCTAD Trade and Development Report (2007) points out, these new RTAs have increasingly included provisions for deeper integration among countries and include policies which require a much higher degree of harmonising national policies with a reform agenda that favours greater freedom for market forces (ibid: 54). Particularly for a country like India, which still suffers from bad infrastructure, high transaction costs, poor productivity and in general, a less favourable business environment, such measures may have serious negative impact on the industrialisation and growth of its economy by constraining the policy space available to the policymakers. It has also been argued by a number of economists that by pushing aggressive trade treaties on a bilateral basis, developed countries are weakening the power of developing countries in multilateral trade negotiations. As discussed above, in an RTA between a developed and a developing country, the developed country often manages to include aggressive trade liberalisation clauses, investment protection clauses and extraneous issues in the treaty. Having abandoned objections on these issues on a bilateral level, the developing country cannot oppose these on a multilateral platform. As India has adopted a fairly well balanced and firm position in the WTO trade talks, a major deviation from such positions in bilateral trade and investment deals may damage Indias credibility in multilateral forums.

Overall, it can be said that the domino effect of regionalism has caught up with India. Like other developing countries, India is scrambling to forge RTAs and other deeper forms of economic cooperation agreements to protect itself from exclusion in its key markets. The WTO negotiation is also not going forward and countries are falling back on FTAs to further liberalise trade. This is creating a kind of a vicious cycle, where lack of progress in the WTO is prompting growth of regionalism and growth of regionalism is reducing interest in the WTO trade talks. It must be kept in mind that in spite of all its shortcomings, the WTO is still a rule-based and democratic set-up and it is easier to get a fair deal in the WTO than is possible in a north-south trade and investment agreement. India must ensure that in its quest for market access it is not giving up policy space and compromising on key developmental issues. It is also worth reiterating that given Indias problems with low productivity and inefficiency, tackling the supply-side shortcomings may provide better medium to long-term export promotion than seeking marginal increases in market access through small reductions in tariff rates.

prompted better stakeholder participation and generation of debate regarding various aspects of the trade talks. The ministry of commerce may want to consider more dissemination of information regarding the ongoing trade and economic cooperation deals so that at least there is more awareness about these agreements.
Notes
1 For example, according to Prasad (2009), With the increasing importance of Asian emerging markets in the world economy, rebalancing growth in developing Asia toward more reliance on domestic demand and less on exports is an important component of the global effort to stabilise world financial and economic systems. There are subtle differences among the concepts of RTAs, PTAs and FTAs. But in this paper, these terms will be used interchangeably. Source: http://commerce.nic.in/trade/international_ta_pipeline.asp. This is true as long as Indias preferential trade partners are WTO member countries. For nonWTO members, an FTA can open up new markets. However, from the list of countries with which India has FTAs or will have FTAs it can be seen that they are all WTO member countries. Russia is the only exception so far. However, Russia has fulfilled all the requirements for WTO accession and is in the course of joining WTO as a member very soon. See Pal (2008) for a more detailed discussion on this.

2 3 4

References
Economic Times (2010): Currency Turmoil Could Jeopardise Recovery: WTO Chief, 19 October, available at http://articles.economictimes. indiatimes.com/2010-10-19/news/27604067_1_pascallamy-exchange-rate-currency. MOC (2011): Strategic Plan: Department of Commerce, available at http://commerce.nic.in/ann/ StrategicPlan.pdf . Pal, Parthapratim (2008): Regional Trade Agreements and Improved Market Access in Developed Countries: The Evidence, Economic & Political Weekly, Vol 43, No 48. Prasad, Eswar (2009): Rebalancing Growth in Asia, Finance and Development, December, Vol 46, N0 4, available at http://www.imf.org/external/ pubs/ft/fandd/ 2009/12/pdf/prasad.pdf. UNCTAD (2007): Trade and Development Report 2007: Regional Cooperation for Development (New York and Geneva: United Nations). World Bank (2005): The Global Economic Prospects 2005: Trade, Regionalism and Development (Washington DC: World Bank).

Transparency Issues
Another important feature of Indias recent bilateral trade negotiations seems to be a complete lack of transparency during the negotiations. The ministry of commerce website hardly has any updates on the status of these negotiations. For example, negotiations on the Indo-EU trade and investment agreement have been going on for some time and there is not much information available in the public domain regarding these negotiations. Similarly, the negative list prepared for the Indo-ASEAN trade deal was not disclosed till the agreement was signed. While it is possible that for the sake of efficient negotiation and national interest some amount of information needs to be kept among the negotiators and decision-makers, the extent of secrecy presently maintained by India seems somewhat baffling. This is also contrary to the practice followed by the WTO during the Doha round. The WTO periodically publishes updates on the status of negotiations and this information has
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