India welcomes new WTO draft with caution

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New Delhi, February 12:: India, cautiously welcoming the new WTO draft proposals on agriculture and NAMA, said that it would hold consultations with other developing countries and stakeholders in the country before shaping its final views.

Reacting to the new farm draft issued on February 8 in Geneva, the Union Commerce Minister, Kamal Nath said : "We will do our best to protect our poor farmers who cannot be expected to bear the burden of trade distorting subsidies in rich countries".

He said while convergence has been achieved in some areas in the draft, yet there remained some issues to be resolved. He pointed out that significant and effective reduction of trade distorting subsidies of the developed countries was an issue on which there can be no compromise.

Nath, however, expressed satisfaction over the new farm draft bringing back the original G-20 proposals for a minimum 54% in agricultural tariff by developed countries and maximum tariff cut of 36% for developing countries.

The minister said that the agriculture text distilled the progress made in negotiations between September 2007 and January 2008. While convergence has been achieved in some areas, the chair has also put out brand new text in some other unresolved areas and these would require detailed deliberations e.g. Special Products (SPs), Special Safeguard Mechanism (SSM), Special Safeguards, Tropical Products, Tariff Simplification etc. There were also some other issues on which large divergences still exist, e.g. OTDS, market access in Sensitive Products, Tariff Capping etc.

He said: "Significant and effective reduction of trade distorting subsidies of the developed countries is an issue on which there can be no compromise because they impact adversely upon the livelihood of millions of our poor farmers". He added that: "Indian agriculture cannot be expected to carry the burden and most definitely not in a Development Round".

The minister expressed satisfaction at the fact that the original G-20 proposal of a minimum 54% cut in agricultural tariffs for developed countries and a maximum tariff cut of 36% for developing countries was back on the table.

"India had always espoused the concept of two thirds proportionality between developed and developing countries in tariff reductions," he said.

Nath said that a lot of work still remains to be done on Special Products (SPs). India has already indicated that one of its "must-haves" on SPs was a significant number of tariff lines, which did not have to take any tariff cuts. Also, logic demands that the cuts for other SPs had to be more favourable than for Sensitive Products.

On the Special Safeguard Mechanism, the minister opined that some of the proposals in the text were likely to render the SSM unworkable and detract from its utility. The SSM was a defensive instrument to safeguard livelihood issues: "How can a weak instrument provide the required protection?" he asked. Volume and price triggers have to be sensitive and independent of each other. This has to be recognized. India has always maintained that a simple, easy-to-use SSM was in the best interests of all.

On the new NAMA draft, Nath said : "Our industry would need greater lexibilities as compared to the industries in the developed countries. He expressed his disapproval over the removal of numbers on Para 8 of the earlier Non-Agricultural Market Access (NAMA) text, which gave some flexibilities to developing countries and has been on the table since July 2004.

Nath noted that though the revised NAMA text continues with the earlier proposals on Swiss coefficients, it reflects that there are other points of view held by many countries. He stated that these numbers were the very least that the developing countries, including India, needed in order to protect their infant industries, small-scale industries, and vulnerable sectors. "We need greater flexibilities" he added. The chair should not have withdrawn the numbers from the text and left room for ambiguity to creep in.

He expressed the hope that the chair of the Rules Negotiating Group would take a cue from the NAMA chair and now come out with a revised text, which can truly reflects the views of the membership rather than representing just the views of one country, as in the case of the anti-dumping proposals. He said that the text on fisheries subsidies has to be radically revised in order to take into account the actual conditions in which small, artisanal fisheries in the developing world have to operate. "This is an issue that critically impinges upon the livelihood of millions of poor fisherfolk in India and other countries. It cannot be left unaddressed" he added.

Sounding an optimistic note, Nath said that the revised texts can form the basis for constructive engagement and negotiation in the coming weeks. However, a lot of hard work still lies ahead. For instance, there are around 170 square brackets in the agriculture text alone, which have to be reduced through intensive negotiations to a small and manageable number.

"There are admittedly a number of areas where there are strong differences of opinion. Convergence in these areas will have to be incrementally achieved in these areas," he said.

It was vitally important to bear in mind the overarching development mandate of the round. If India's developed country trading partners recognize this, it would hasten the process of removing the square brackets and reaching convergence. India was committed to concluding the Doha Round quickly, he said.