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In fighting trade wars, it is not the number of soldiers that counts but their dedication. So says India's general/ambassador to the World Trade Organisation Ujal Singh Bhatia who, from his bunker in Geneva, is fending off stealth strikes in the draft text, blocking divide-and-rule tactics and squashing rebellion among allies stoked by well-armed battalions of US and European negotiators. As a high-level showdown in Hong Kong draws near, Bhatia's top priority is to save India's poor farmers from the onslaught of heavily subsidised exports from the big guys.

"They stripped China down to its underwear before it joined the WTO. Now all eyes are on India. But we are not an easy shoot," says a charged Bhatia, ably assisted by his band of seven samurais—each an expert in the arcane battles of blue-box subsidies, non-agricultural market access, special safeguard mechanisms and geographical indications. As the trade ministers of 148 countries prepare themselves to converge at the WTO ministerial meeting in Hong Kong on December 13, there's a feeling that acute transigence, mainly from the US, EU and a few developing nations (like India), is likely to turn it into another failure.

Hopes of a peaceful ending have already dimmed with the WTO's new director-general, Pascal Lamy, having circulated a short draft agreement that is mostly in square brackets. In WTO jargon, square brackets indicate issues on which there are sharp disagreements. "It will be impossible to sort out all the differences in Hong Kong. Most contentious square brackets are about agriculture. We are almost looking at another ministerial meeting in March-April," says trade expert Bibek Debroy, director, Rajiv Gandhi Foundation. Even US trade representative Rob Portman admits that differences among developed nations over how far to cut agricultural tariffs practically meant "the progress in Hong Kong won't be as great as we hoped".

India's stance on the controversial agriculture-related issues provides another indicator of the extreme positions. "Global agriculture is hugely distorted. Farmers in rich countries get subsidies of $1 billion a day. Where is the question of Indian farmers competing on commercial terms with them?" notes Bhatia. He adds that India will agree only if provisions are made to protect sensitive crops and block imports to prevent flooding of its domestic market. Although India heads the G-33 countries on this, it's willing to stand alone if push comes to shove. "These are non-negotiable. There will be no trade-offs," Bhatia avers.

Kamal Nath, India's commerce minister, too referred to the $1 billion-a-day farm subsidy by rich nations as against $1 per day in developing nations. But such arguments may be vastly exaggerated. Renowned economist Jagdish Bhagwati recently said rich nations' annual farm subsidies that distort production and trade are not more than $100 billion, instead of the oft-quoted figure of $280 billion. Of the former figure, the actual export subsidies may not amount to more than $3-5 billion. Arvind Panagariya, a professor in Columbia University, agrees and says the higher figure includes all measures taken to raise producer prices above global ones. By that logic, the free power given to Indian farmers should also be counted as subsidies, and included in India's figures given to the WTO.

Direct subsidies to the US farmers—the biggest producer followed by France—come to around $23 billion. Of course, indirect subsidies accrue in many forms. Already, the US has offered to cut the trade-distorting subsidies—60 per cent on export subsidies, 75 per cent in market access and 45 per cent in domestic support. The EU claims that it has reformed its agriculture policies and has offered a 25-30 per cent in market access, but bowing to pressures from members like France, has refused to improve them. If France and the US have to reduce the support to their farmers, they would obviously ask for reciprocal concessions in the same area from the G-20 nations, including Brazil and India, to appease domestic farm lobbies and MNCs like Cargill. For example, the EU has asked the G-20 to make serious offers to open their goods and services markets.

According to Panagariya, India can gain from this round as it has many comparative advantages in agricultural products and its share in agriculture exports is higher than in industrial goods. He adds that nations like India should be ready to provide more market access for foreign goods, especially as the average tariffs in India were higher than those in the US and EU. India, for instance, has 44 per cent trade-weighted average tariff, compared to 39 per cent in China, 12 in the EU and 3 per cent in the US.

Several experts also believe that the battle over agriculture, which is mainly being fought between the US and other big exporters, is one that India should ideally have little interest in. India's farm exports are insignificant, except in the case of rice (18 per cent share of the global trade in 2002). Although imports are high, India's interest here is in not conceding greater market access to developed nations for political and other reasons. On the contrary, the current impasse in agriculture is prohibiting developing nations like India from focusing on non-agriculture market access (NAMA), where they have much to gain.

To be fair to India, in terms of priorities, it's keen to discuss issues such as services and amending TRIPs to protect biodiversity, defend India's industrial tariffs and defeat the aggressive ploy of dividing the strong developing countries' lobby. The tough approach has been a success. On the issue of protecting genetic resources and traditional knowledge as well as halting bio-piracy of indigenous treasures like haldi and neem, it has managed to raise an awareness. But, despite a clear clash between the Convention of Biodiversity (CBO), which calls for protecting the varied wonders of this earth, and TRIPs, which gives exclusive patent rights to companies, the US has refused to look the problem in the eye because it implies infringing on corporate rights. Washington has signed, but not ratified the CBO.

So, if the developed nations are unwilling to come to the table, India too seems to be in no mood to give in. On the Lamy draft, the country expressed disappointment with "the serious and growing development deficit" in the Doha Round. "There has been virtually no progress in the Doha Mandate on s&d (special and differential) treatment, calling for provisions to be made more effective, precise and operational. Even the five prioritised s&d proposals of the least developed countries have not been agreed to. There is a similar lack of emphasis on development issues in agriculture, nama and TRIPs. Urgent action is required to rectify this if the outcome of the Round is to have any credibility and relevance for developing countries."

An unbending posture like that by most of the relevant countries is likely to derail any multilateral consensus. This also explains why, of late, the importance of WTO has been diluted as nations seem more interested in forging regional free trade agreements(FTAs) and trade pacts. Says Samar Verma, director, Centre for Trade and Advocacy (under Oxfam): "These pacts now account for around half of global mfn (most favoured nation) trade. And it is a process that was started by the US with all the developing countries following suit." It has helped nations to get away with lot more stringent commitments than are allowed under TRIPs, as was the case with the US-Thai pact with Washington emerging a winner. The same can be said of the Indo-Sri Lanka fta in terms of market access. While most experts agree that such regional pacts may become meaningless in the near future, it's a good way to forge blocs and lobbies with convergent interests to negotiate successfully at the multilateral WTO forum.

Varma expects that the Hong Kong Round could yet be salvaged through Lamy's intricate bargaining skills as happened in Cancun when he dropped the prickly Singapore issues. Even if it doesn't, says Panagariya, "I'm very optimistic about the successful conclusion of the round in 2006. Virtually everyone wants agriculture to be liberalised. And if the member countries pass on this opportunity, the sector will remain protected for years to come." It's a thought for India which has done exactly this in an area that provides livelihood to one-third of its people. After all, when cereal or cotton prices fall to absurd levels, Indian consumers can benefit too. And state governments can ensure that the farmers do not suffer. It's time now for India to match its rhetoric at multilateral levels with action at home.

However, opening up of the farm sector, especially to foreigners, is highly likely to spell political doom for any party in India. No politicians, especially the Congress leaders who have regularly insisted on reforms with a human face to help those living in rural areas, can be seen to give on agriculture-related issues at WTO. As long as that consensus cannot be built within the country at all levels, commerce ministers like Kamal Nath will have to keep opposing such issues, be it in Hong Kong or in the next ministerial round.