The leaders of India, Brazil and South Africa (Ibsa), at a summit meeting at Tshwane in South Africa, have reaffirmed their commitment to carry the Doha Round of trade negotiations at the World Trade Organization (WTO) towards an outcome that is ?fair and acceptable to all?.
This commitment came in a joint declaration by the Prime Minister of India, Dr Manmohan Singh, the President of Brazil, Luiz Inacio Lula da Silva, and the President of South Africa, Thabo Mbeki, following the second Summit of the India-Brazil-South Africa Dialogue Forum held in Tshwane on October 17, 2007.
The three leaders noted that the Doha Round is entering a critical stage, and that these negotiations are now in a genuine multilateral process, with draft modality texts for agriculture and non-agriculture market access (Nama) under consideration. This comes just as the chair of the agriculture negotiations at the WTO has been conducting consultations among some 36 representative delegations on various agriculture issues?export competition, domestic support and market access.
While the chair, Ambassador Crawford Falconer of New Zealand, has claimed a reasonable degree of progress on export competition issues, this does not seem to be the case with domestic support and market access issues. A report in WTO Reporter cited Falconer as saying on October 17 that there has been little new that has emerged from the discussions. Nothing much has emerged on the treatment of sensitive products and subsidies for cotton. The report also quoted Falconer as saying that there was nothing more to say on the issue of trade-distorting farm support, and such decisions would have to be made at the political level.
At a meeting of the General Council on October 9, four developing country groupings?the ACP Group, African Group, Nama-11 and Small and Vulnerable Economies (SVE) Group?stressed that the modalities for Nama have to respect such development principles as lower percentage reductions of tariffs for developing countries and flexibilities that suit the diverse needs of different countries.
While not formally rejecting the draft modalities paper of the Nama negotiations chair, the proposal by these groups has major points of divergence from it?such as in the tariff reduction formula, the flexibilities given to developing countries affected by the formula cuts, and special treatment to categories of developing countries.
In their joint declaration, the three leaders reiterated the importance of the development dimension of the Round and welcomed the solidarity and cooperation among developing countries. They underlined 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.
E-mail: vasu022@gmail.com