International Covenants not enforceable in India: High Court

In what has been the settled law of the law has received another affirmation in a recent decision by the Bombay High Court; that given the dualist structure under the Constitution of India, international covenants / treaties etc. do not have enforceability under the Indian legal system. In a writ petition filed before the High Court it has been challenged that the imposition of higher taxes on imported wine in the State of Maharashtra was illegal in as much as the GATT and other international agreements under the WTO (to which India is a party) has been agreed upon which sought to restrict the imposition of higher taxes on imported goods under the 'National Treatment' clause in the said agreements. 

Noting the various provisions of the Constitution and declaring the challenge to the levy as without basis, the High Court inter alia declared as under;

34. The Constitution Bench [in Maganbhai Patel’s case] then turned to Article 253 of the Constitution which deals with legislative relations i.e. distribution of legislative powers. The Constitution Bench observed that the effect of Article 253 is that if a treaty, agreement or convention with a foreign State deals with a subject within the competence of the State Legislature, Parliament alone has, notwithstanding Article 246(3) of the Constitution, the power to make laws to implement the treaty, agreement or convention or any decision made at any international conference, association or other body. The Constitution Bench further clarified that in terms, this Article deals with legislative power : thereby power is conferred upon the Parliament which it may not otherwise possess. But, it does not seek to circumscribe the extent of the power conferred by Article 73. The Constitution Bench clarified that if, in consequence of the exercise of executive power, rights of the citizens or others are restricted or infringed, or laws are modified, the exercise of power must be supported by legislation: where there is no such restriction, infringement of the right or modification of the laws, the executive is competent to exercise the power.

35. This judgment lays down the principles in respect of Article 253 and the effect of international treaties. They can be summarized as under :

“(i) The stipulations of a treaty duly ratified by the Central Government, do not by virtue of the treaty alone have the force of law.

(ii) Though the Executive (Central Government) has power to enter into international treaties/agreements / conventions under Article 73 (read with Entries 10 & 14 of List I of the VII Schedule to the Constitution of India) the power to legislate in respect of such treaties / agreements / conventions, lies with Parliament. It is open to Parliament to refuse to perform such treaties / agreements / conventions. In such a case, while the treaties / agreements / conventions will bind the Union of India as against the other contracting parties, Parliament may refuse to perform them and leave the Union of India in default. 

(iii) Though the applications under such treaties / agreements / conventions are binding upon the Union of India (referred to as “the State” in Maganbhai's case) these treaties / agreements / conventions “are not by their own force binding upon Indian nationals”.

(iv) The making of law by Parliament in respect of such treaties / agreements / conventions is necessary when the treaty or agreement restricts or affects the rights of citizens or others or modifies the law of India. 

(v) If the rights of citizens or others are not affected or the laws of India are not modified then no legislative measure is needed to give effect to such treaties / agreements / conventions.”

...

40. The upshot of the above discussion is that the Central Government has in exercise of its executive powers under Article 73 of the Constitution read with Entries 10 and 14 of List I of the VIIth Schedule entered into international treaties with which we are concerned here. The stipulations of the said treaties duly ratified by the Central Government do not by virtue of the treaties alone have the force of law. They are not by their own force binding upon Indian nationals. When the treaty or agreement restricts or affects the rights of citizens or others or modifies the law of India, it is necessary for Parliament to make a law in respect thereof under Article 253 of the Constitution and not otherwise. In any case, it is open to Parliament to refuse to perform such treaties. Admittedly, in this case, Parliament has not made any law under Article 253 of the Constitution. Therefore, the stipulations in the instant treaties do not have a binding effect. The argument that legislation is not a pre-requisite for the court to take cognizance and apply international policy must, therefore, be rejected.

41. The matter can be looked at from another angle as rightly argued by Mr. Khambatta. The Constitution recognizes only two sources of legislation i.e. Parliament (Article 246 read with List I and III of the Seventh Schedule and Article 253) and the State Legislatures (Article 246 read with List II of the Seventh Schedule to the Constitution). The legislative powers of these two sources (and of their delegates in the case of subordinate/delegated legislation) cannot under the Constitution be made subject to the provisions of international treaties / agreements / conventions albeit those to which the Union of India (vide its executive powers) is a signatory.

Have a look at the decision.

Handling Undervalued exchange rates and Sovereign Wealth Funds under WTO: A failed solution already?

It is very recently that we picked up this paper which has been posted on SSRN for sometime now but then that we have and feeling strongly on the issue, we thought it was wise to have an exclusive post on the topic. Today we are discussing in the backdrop of a Working Paper published under aegis of Peterson Institute for International Economics and developed by two economists, entitled 'Currency Undervaluation and Sovereign Wealth Funds: A new role for the World Trade Organization', available at SSRN. Though the paper is economics based, yet has enormous significance in legal arena for it deals proposes for a legal regime for two key issues facing the policy makers across the globe currently; 'Undervalued Exchange Rates' and 'Sovereign Wealth Funds'. The way we proposed to deal with the issues is first to give a basic insight into what the paper talks about and then come up with our understanding of the issues and how they are better not regulated the way the paper proposes.

What the paper proposes?

The paper is based upon two premises; (i) that currencies are artificially undervalued by countries to lag it creates to a fair international trading regime , and (ii) the accumulation of wealth as an outcome of these undervalued exchange rates and also otherwise by such countries and their consequent establishment of Sovereign Wealth Funds. Regarding the first part, the paper cites the examples of most notably China and few more countries (like UAE, Kuwait, Saudi Arabia, Vietnam, Bahrain, all oil-exporting countries) and bases its proposal to deal with the situation under the WTO for the reason that the proper valuation of these exchange rates would provide a significant boost to international trade. Regarding the second part,

To sum up (as the paper itself suggests), the paper is comprised of three parts (i) why and hows of WTO involvement, in collaboration with IMF, in dealing with undervalued exchange rates, (ii) the whys and hows of WTO involvement in regulating SWFs, and (iii) how the placing of the issues on the trade negotiating agenda could help galvanize the Doha Round.

Our views on the proposals

It was not long back that we wrote over the direction in which the Sovereign Wealth Funds are moving and the tensions that their economic might poses to geo-political relations and also generally about the failure of the WTO to come up from the contentious issue of market access (both agricultural and non-agricultural), agricultural subsidies, services and IPR in these two parts (Part - I and Part - II). In general, we have highlighted in all of these posts over how the proposals to regulate the movement of these new instruments of trade policy (basically having a foundation in developing countries) are stimulated by the enhanced fears which these strengthening of developing countries' economies pose to the self-crumbing developed economies, most notably the United States.

For example, China's accumulation of US Dollars as its foreign exchange reserve is so massive (and continues to add significantly every day) that the mere visualization of China doing away with it would send shivers to not just the United States but the consequent fall in dollar would ensue a global economic dooms day. For so long as China keeps these funds to itself, it is fine to all. But then the United States and the international economic community as such have to find to ensure that this continues to be so and they do not get up one fine morning to find the USD collapsing in wake of China's removal of dollar from its reserve. Plus, not just the direct exodus of dollar from China, the indirect investment of China in strategic locations is the major concern. And that China is not into philanthropy, its infusion of $5bn into Morgan Stanley (which saves a liquidity crisis at this US giant) is not just seen as an act of charity but instead the gaining of lobbying power (which MS carries with it) within the United States, and thus requiring an countering act on the part of the US to mitigate any buying of political power through such economic instruments. [For more such examples, have a look at our earlier post on Sovereign Wealth Funds] Now to deal with the proposals, let us handle each issue one by one.

Undervalued exchange rates: not a new phenomenon but an ever-green subject for economic analysis and political bickering, no doubt has tremendous implications for international trade but we have out own doubts on its management under an international institution like the WTO. This is for a number of reasons as we enumerate here;

(i) Now that the impossible trinity is already a fact taken for granted and that countries grapple with the dimensions of international capital flows (installing and managing in between their own ways for promoting/inviting capital investments within their own country), a manipulated exchange rate offers a very viable and effective medium for the host countries (especially the developing countries and emerging market economies) to boost and regulate the ways capital investments flow in their country.

(ii) The flexibility and added trade advantage an undervalued exchange rate offers is not hidden from anyone. China's notorious undervaluation of its currency (Renminbi) by fixed pegging it to USD [8.2765 Renminbi Yuan to USD as wikipedia informs] and the huge trade advantage it provided to its exports (by making them cheaper artificially) is a reminder of the fact that countries with export oriented economies can strive nicely in such pegged regimes by constantly undervaluing their exchange rates.

(iii) And then emerging nations have not forgotten the last decade's South East Asian crisis, which led to a downfall of many a south east Asian nations, for which the changing exchange rate was a major trigger. Most developing countries would like to vouchsafe against such avoidable exposure to market failures and herd-run.

Now why all are three objections are directed towards a developing country paradigm is for a reason. The reason is the proposed involvement of WTO to regulate the problem (though a problem only for the developed nations which lose out comparative advantage on account of an undervalued currency of another exporting country) is itself full of controversy, given the already hot-waters WTO is in being alleged with lacking the concerns for developing countries. Instead of rewriting what we have already written [for a fuller account, read out our two posts (Part - I) and (Part - II) pointing to the bones of contention and also this critic of WTO's report on six decades of multilaterlism] but suffice would be to point the fact that after the first concrete realization and demand by developing countries for a fair (and not just free) trading regime in Doha in 2001 (though the matter was first brought to light in Seattle in 1999), the WTO has already missed a number of deadlines and has been postponing the matter (as a matter of fact it has been postponed indefinitely now with no deadlines to come out with solution) with the last six years bringing out not even a harmonious discussion ground lest to talk of a solution.

In fact the formation of the G-110 alliance of the developing countries at the last Ministerial in Hong Kong in 2005 (the fact that no date for the next Ministerial Conference has been announced, which technically should have taken place in 2007, is an issue requiring an exclusive post altogether) is in itself indicative of the fact how closely the developing countries view and keep the issue of a fair trading regime which would not compromise their development objectives but would instead promote it and so long they find the WTO's working not in consonance with their inner goals, it seems that the tussle will continue and deadlocks remain.

In this scenario, the apt choice for the developing countries would be to ensure their internal economic stability by regulating their exchange rates at the national level rather than limit their ability at the expanse of an international institution (which no matter how sound economically, would no doubt bring in the political element, a proposition which even the WTO cannot deny) and thus face the risk of economic defacing just to ensure that world trade goes smoothly.

For these reasons, we are of the view that politically and on cost-benefit analysis, the option of subjecting the exchange rate regimes to be judged by an international institution like the WTO is a non-starter proposal given the lack of political consensus. This however does not even include the paradigm of strict reluctance on the part of the developing countries to subject themselves to a more stringent rule based regime under the WTO (as the undercurrents would bring out), considering which the proposal does not even merit scrutiny.

In this background let us compare the proposals. In a run down to the working paper in question, the authors argue "that (1) exchange rates have serious trade consequences and unlike trade interventions, which are being phased out all over the world, episodes of undervaluation are likely to recur; (2) the Fund, the natural forum for regulating exchange rates, has abdicated its responsibility and is unlikely—for political reasons and its own traditions—to be able to remedy this; (3) the WTO could possibly fill this gap by creating new rules on exchange rates to parallel those on export subsidies and import taxes; and (4) these rules—as many others on trade—could become the subject of disputes in the WTO, with the Fund providing inputs on technical matters as it has in relation to trade restrictions for BOP reasons."

To deal with each of these propositions; (1) even though exchange rate have a serious trade consequence, that does not imply that the same should be brought into WTO for WTO is not THE regime to regulate international trade. The Preamble to the Marrakesh Agreement establishing the WTO is catagorical to the effect that per se trade regulation comes later and it is the sustainable development and promotion of developmental goals of the developing countries that takes precedence. In such a scenario, a national management of exchange rates being a better device towards such goals, it is better that WTO keeps out of it; (2) the fact that the IMF has failed to regulate the issue (even though it is its strict mandate to ensure against artificial manipulation of exchange rates) does not imply that another institution should take over. The core principle on which WTO works is essentially different from the IMF and also the two perform contrastingly different roles in international paradigm. Neither is the WTO platform suited to it task nor is the WTO (being a legal and not economic regime) capable of ensuring that the tasks identified for ensuring fair valuation of exchange rates can be meted out at its venue; (3) the WTO can possibly fill the gaps for many other international institutions as well. The comparatively better performance and more relevance of the WTO compared to the UN in today's world does not imply that the WTO should take over UN as well. So the argument that WTO performs better the IMF is really a fallicious and non-starter; (4) the little handling of Balance of Payment (BOP) that the WTO has undertaken has been contentious and argued as unfair and ineffective. There has really been no improvement and work on the 1979 adopted Understanding on BOP effects on trade and with this experience, it is better that WTO does not go deeper in this potential minefield of disputes.

Sovereign Wealth Funds: The emerging new saga of national investments in international framework, a hot topic for economists, lawyers and most importantly the politicians to argue over. While IMF is already mulling over the possibility of bringing out a Model Code of Conduct or sorts to ensure transparency and non-political investing through these SWFs, nonetheless the issue remains to be contentions for the description in the first part above. [for more read our earlier post on SWFs].

Before we give out our own reasons as to why we think dealing SWFs under a WTO type regime is a non-starter, let us analyze why the paper argues in favour of such an approach. In sum the paper culls out two reasons for WTO to be the home for a multilateral agreement entailing a regulatory regime for SWFs; "Firstly, the WTO already, albeit somewhat opaquely, covers investments by SWFs in its services agreement—the General Agreement on Trade in Services (GATS). A second argument in favor of WTO regulation is its dispute settlement mechanism (as in the context of exchange rates). Consider a situation where a WTO member felt that a foreign SWF was behaving inconsistently with its obligations. Instead of taking unilateral action based on its own judgment—actions that can provoke retaliatory protection and spiral into a trade or investment war—the member would now have recourse to the WTO dispute settlement mechanism. The well-established mechanism would offer institutionalized consultation and, when necessary, impartial assessment of conformity with mutually agreed conditions."

The first argument does not hold scrutiny for the fact that GATS calls forth for a non-protectionist regime, requiring the grant of market access and non-discriminatory treatment, to say the least. Dispute such rules, it is being argued that the market-access offered by the developed countries to the service providers of developing countries is cluttered with indirect and perceived obstacles and thus whatever is provided is not sufficient. In this scenario, imposition of prior-check rules and retaliatory checks on inbound investments only for the fact that they arise from nations (being SWFs) and not independent parties, would not only incite more tension between the North and South but also cast doubts on the objectivity of the entire trading system as such.

The second argument is also non-workable given the legal system that WTO's Dispute Settlement Understanding provides. Even if the proposed rules find a place in WTO, at the most their coverage would be limited to transparency and mode of entry. It couldn't go further than that for doing so would imply searching for the motivations behind the investments made by these SWFs, a subjective task and not capable of judicial determination. In any case, it would be unwise for the developed countries to argue for a move towards bringing in multilateral rules for regulating SWFs for that would imply inability to act on their own volition, delays in retaliatory action (given the standard time frame required to be followed before a judicial determination can take place) and also given the inroads this would make in the ability of the nations to handle such affairs politically.

The paper discusses other perspectives as well (such as SWF investor protection etc.) as arguments for a multilateral trading regime on SWFs but then these are only incidental and if the main purpose is not sufficed, we doubt that countries would choose to exercise their political might for a half-efficient solution. After all the scenarios are better dealt with under an economic framework but then when it turns to geo-economics, it brings in geo-politics as well and the ten years of working of the WTO have proved just the same.

WTO at 60: six decades of multilateralism

GATT/WTO at 60: six decades of multilateralism. Sounds nice indeed. But then what do be look back at? Is this video prepared by the WTO Secretariat give a correct depiction of it? Or the accompanying annual report [click here for the full text] portray the state of affairs on the right tune? I would not agree with that. In my two earlier posts [click here for Part - I ; Part - II] I had an occasion to trace the historical evolution to WTO right from GATT to the present times where the issues are really grappling and end up with more of an egoistic standing rather than logical conclusions.

But then frankly, where do we stand after 60 years of multilateralism in international trade? Director General Lamy would be quick to point out that all is not over. There is still a lot which the WTO is capable of and in fact doing with the negotiations continuing on other aspects of the matter such as anti-dumping, textiles, etc. And I would counter-argue that the success of an institution is not determined by the work it does on issues which are ancillary to the main objectives which it promotes but instead is determined by how well it pursues the main objectives which it is meant to serve and in case of WTO; free and fairer trade.

It is recognized in the WTO preamble itself [i.e. the Preamble to the Marrakesh Agreement establishing the WTO] that "relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand". But then what has it done to ensure that the developmental difference are bridged up by designing facilitating terms to trade? I am yet to find an occasion either in the texts or in practice where this has been done.

Take for example the TRIPs Agreement, which has brought to the DSB more number of countries than any other Agreement and has ensured that the countries which cannot provide food security for their citizens ensure that the IPRs of foreign authors and inventors are protected. Similar is the case with the anti-dumping Agreement whose strict rules for imposing anti-dumping duties have ensured that it such duties can be challenged at length in the DSB and thus take away a trade-protection-tool from the hands of many a countries who invoke it genuinely.

It may be a case that even developing and least-developed countries have got a tool to ensure that they can set themselves equally off with the developed countries by invoking the terms of the various agreements and getting them implemented through the DSB. But then again, the political pressures and the green-chambers have ensured that it doesn't happen that way. Had it been that way, I am sure the developing countries would not have to clout through G-110 to ensure that they are heard (mark the words 'heard') at the WTO about the ill-cries of their producers and traders who fail to get market-access in the developed countries.

It may be a good face-saving exercise to sing the saga of the 60 years gone and the achievement of the times, but then without facing the reality and the contentious future, I am not sure what purpose it serves.

WTO at the cross-roads: Part - II

In the last post I wrote about the genesis of WTO and international trading regime. Here I essentially continue from where I left, raising issue and bringing to fore the controversies which have stalled the progressive liberalization of international trade, which has been the hallmark of this institution.

It starts with agriculture (which incidentally has also been the first objective of international trade) and ranges from services to Intellectual property et. al. The seeds to these were sown in the Uruguay Round itself. The Agreement on Agriculture was the outcome of a compromise. A comprise effectuated between the North and the South wherein concessions were given by both the sides in order to conceive an international institution promoting free and fair trade. While the North agreed to open up its (1) services sector (technically known as 'Market Access') and also did up with the licensing and quota policy on (2) textiles, the South compromised on (1) Intellectual property and (2) agriculture.

All WTO agreements on these four sectors, owing to the compromise, were incomplete and transitionally existent. They provided for a progressive liberalization, which would result into binding obligations for the WTO Members in a manner which was considered to be liberalization of international trade. It was agreed that the Members would generally and without being affected by prejudicing national interests (sic) think rationally and thus allow the free flow of international trade and thus permeate into effect the economic notion of competitive advantage, which predicted welfare for all.

However the fallout were different. The governments of these Member states, who committed to these agreements were already under immense criticism from their national rival political parties for having bound their country in the hands of an hitherto unknown institution. Further, the developing countries had a fair cry of immediate necessity whereunder they were required to act quick in order to provide for their citizens whereas such philanthropic gesture was not forthcoming with such promptness. Then there was the NGO factor, which cried foul the entire institution as an instrument in the hands of the developed few to extract what remained in the developing. The very first cases very these developing countries were dragged to the binding dispute settlement mechanism of the WTO coincided with such allegation of abuse and violation of trust. For example see; (1) India-Patents (2) Argentina-Patents (3) Pakistan-Pharmaceuticals (4) Brazil-Aircrafts, just to name a few.

This, inter alia, led to developing countries to unite and strive for the rights they were legitimately entitled to under the agreements but were denied. The developed countries continuously kept pressing for increase in market access in the developing countries (ever wondered why India and other countries are continuously raising the FDI limits in various sectors and that to at such a frequent pace?) (and also the raising standards for intellectual property rights) while they did not simultaneously dilute the barriers to agricultural imports from these developing countries, which incidentally was the only prominent tradeable commodity for them.

Intense international pressure led the WTO to dedicate the Doha round (for more please read the last post) to development. However this was never felt sufficient for the members representing the developing countries had been used to lip-service and wanted some significant works now. The EC cited its own internal problems (such as the 'Common Agricultural Policy' or CAP, and the development of the internal markets) while the US argued that the developing countries had still not done enough to expect concessions. Then there was the Cairns group, which was totally opposed to the developing countries getting a strong-hold in agricultural trade. Thus arose a complicated tussle, which no one was willing to find a solution for.

The Members kept postponing the deadlines, but could not arrive at any agreement, being unwilling to budge from their position and avoiding giving concessions. The issue thus lingered around. One who moved first and sought to break-the-ice, would have been considered the weaker link and would have been compelled to provide more concessions. Thus the negotiations were stalled.

Thus stands the WTO today, all being unsure of its fate. Whether the institution would survive the onslaught of time and developmental needs of more than half the world population remains to be a proposition requiring the test of time. However one thing is sure; WTO being the first international institution with a binding nature of obligations, it is quiet possible, with the stalling which it has faced, that future international commitments move back to the original position and keep the international law making more of a voluntary and optional type rather than conceiving a binding institution.

WTO at the cross-roads: Part - I

2007: what a year!!! marks 60 years of the General Agreement on Tariffs and Trade, (or GATT) a landmark international agreement, with no predecessor and leading to an institution of its own. I thought what better to describe the landscape of international trading regime on this occasion. No doubt wikipedia had a huge content list on this topic and an awful lot of scholarly and political writing has gone into being behind it, but the fact remains that this arena has witnessed much that any description of it would in all terms be subjective and cannot remain apolitical. So here I go, giving my account of WTO. Starting from the start, coming of the present and the future in store.

The history of international trade can be traced back to the start of human civilization itself. Not that there were nations at that time but the first civilizations were generally settled across river beds and kept shifting. As times passed, they began to settle at a place and as they grew, came the principle of division of labour and specialization. And then the trade started; across cultures, across people, across places. The medieval era was marked by fixed international trading routes and the history of Constantinople tells it all.

But in the modern times, the prominence of the event is marked by the Great Depression, that followed the First World War. Facing economic crisis, trading nations being to impose heightened tariffs (or 'Customs duties') on goods coming into their territorial borders from other countries. The United States, infamously, levied duty to the tune of even 1000 percent on some goods. What followed was an international tug-o-war between nations, competing each other on imposing higher tariffs.

This led to wishful thinking of a rule-based regime in international trading systems. The problem was sought to be addressed at the Bretton Woods Conference, which led to the culmination of three international institutions; International Monetary Fund (IMF), International Bank for Reconstruction and Development (or World Bank); and the International Trade Organization (ITO). While the IMF and the World Bank survived the political onslaught and fierce criticism of the third-world countries, the ITO died a political death. President Henry Truman of the United States did not keep his commitments at the Conference and did not submit the ITO Charter (also called the 'Havana Charter') for ratification before the US Congress. Thus ITO could never materialize.

But what survived for the interim measure; the GATT. It was considered to be a stop-gap arrangement for meeting impelling necessities till the time ITO became operational. But since ITO could not come into being, GATT provided the international players an arena to experimental playground to bring out rules for a free-trade regime. And the outcome was various negotiating rounds, with the last one being in Uruguay in 1986, which lasted till 1994. As a result of this eight year intense negotiations was the WTO, as we know today, providing an unprecedented binding regime of commitments in international scenario. There was a huge hue-and-cry of loss of sovereignty by the national governments by accessing to the WTO but this new-yet-old institution survived the political onslaught for the time being.

However the troubles were far from being over. While the second Ministerial Conference went on to promulgate new rules for international trade, the third one in Seattle was a disaster. A huge clout of NGOs continuously interrupted the Conference and did not allow the Ministers to transact much in terms of political making. This led to giving these NGOs as a observer-status in WTO, a move which the policy makers will regret for ever, but was a necessary-evil at that point of time.

The huge scouting by these NGOs and the formation of various developing countries blocks forced the next Ministerial (at Doha) to rewrite the entire agenda as a development-based one. Initiated in 2001, it was planned to be over by 2003 (i.e. by Cancun Ministerial) but issued spilled over. Things could not be packed even by 2005 (i.e. till the Hong Kong Ministerial), despite an in-principle agreement being reached in August 2004.

And here we stand, in 2007, with the institution facing a crisis and dilemma as to the future course of action. The EC has its own internal issues to tackle and thus has never been able to contribute much for the growth of international trading. The United States is fascinated with its own internal revenue collections and thus carries a short-sighted agenda for the international trading community. The majority of agriculture based developed countries (called the 'Cairns group') is busy stock-taking its own policies. The developing countries (now 'G110'), led by India and Brazil, form an alliance of their own and are pursuing vigorously for their own interests. The WTO Secretariat, led to Pascal Lamy is wondering how to set the agenda, being crunched into the issues of agriculture and services, stands baffled.

What is at stake is not only the institution but national faiths in an international trading regime. I cannot predict the outcome of this tussle between the north and the south but one thing is for sure; the solution does not seem imminent.