India-Brazil-South Africa call

Font Size

Print

Feedback

Email

Discuss

: that agriculture remains the key to the conclusion of the Round.

In India, domestic industry has urged the government to strongly counter the “simple Swiss” formula in the Nama pillar of the WTO talks at the mini-ministerial meeting at Dalian in China. The argument is that this proposal, being pushed by the US and EU, goes against the spirit of the Doha mandate. In a statement, Assocham has said the Swiss formula makes a case for higher cuts in higher tariffs, thus adversely affecting the interests of developing countries. Further, under the formula, no matter which coefficient is applied, developing countries will face higher tariff cuts than developed countries. In contrast, the modified Swiss formula jointly proposed by Argentina, Brazil and India, would be fairer to developing countries.

According to Assocham, developing countries—especially the group of 20 led by India, Brazil, and China—should remain firm on Nama issues, and must not succumb to the US and EU’s unreasonable trading terms. “It must maintain its tough stance in the negotiations because of its extensive research and experience. India is in a position to gain market access on all fronts and should aim to do so. The tariff reduction formula must be only on the basis of bound rates and any move to base negotiations on applied tariffs should be strongly opposed,” it states.

Assocham notes that developed countries extensively apply non-tariff barriers to block imports from developing countries. It feels India should aim to reduce tariff and non-tariff barriers in areas of crucial interest.

Ambassador Falconer circulated four further working documents on December 21, 2007, reflecting the latest on the talks. These papers are one result of the intensive negotiations that began in September on the revised draft modalities paper which the chairperson circulated in July and August.

There is nothing new in it, except an exhortation to continue to reduce agriculture subsidies and export subsidies, and to improve market access and keep up the work on the Swiss formula to bring down Nama tariffs to ensure a level playing field for a compromise formula for both developed and developing countries. All very unsurprising.

But one thing is now clear to all. If the WTO has to survive, the world’s developed countries will have to develop the political will to reduce trade-distorting subsidies, as enunciated in the Doha Development Agenda.

The author is trade professor Icfai Business School Chandigarh. These are his personal views.