India Rejects WTO Draft On Agriculture

New Delhi, Bangkok, July 30 | Updated: Jul 31 2004, 05:44am hrs
India has rejected the revised draft framework agreement on the on-going World Trade Organisation (WTO) negotiations as it had failed to address its concerns in most areas.

Commerce and industry minister Kamal Nath, who is presently in Bangkok attending the BIMST-EC summit, has reportedly said the new draft is not acceptable. He is flying back to Geneva on Saturday to explore the possibility of framing a new draft acceptable to all members.

The revised draft framework agreement, while yielding some ground to the developing world in the area of agriculture, maintained its earlier stance in the non-agricultural sector.

The new draft is being studied by WTO member countries attending the General Council meeting in Geneva where attempts are being made to thrash out a deal by Saturday.

In agriculture, the new draft, like the earlier draft, proposes reduction in domestic support according to a tiered formula.

Under this, members having higher levels of trade-distorting domestic support will make greater overall reductions in order to achieve a harmonising result. What is new here is the mention that the first installment of the overall cut, in the first year of implementation, the sum of all trade-distorting domestic support of such members will not exceed 80 per cent of the overall base level.

Blue-box support, which are linked to production and are seen as partially trade-distorting, will not exceed 5 per cent of a members average total value of agricultural production, the new draft said.

In the area of green box, the new draft repeats the contents of the first draft where it was stated that green box criteria will be reviewed and clarified to ensure that it has no, or at most minimal, trade-distorting effects or effects of production.

On export competition, apart from talking about agreeing upon an end-date for elimination of export subsidies like the first draft, the revised version goes a step further stating that all export credits and export credit guarantees will also be eliminated. The earlier draft had only mentioned the elimination of the trade distorting element of export credits.

On sensitive products, the new draft says that members should designate an appropriate number, to be negotiated, of tariff lines to be treated as sensitive, taking account of existing commitments for these products.

In the area of non-agriculture market access, the revised draft sticks to the proposal of a non-linear tariff cut, which calls for countries with higher tariffs to bring about sharper cuts.

It also repeats the section on mandatory tariff elimination on identified sectors, which developing countries including India objected to.

In the area of Singapore issues, the second draft, like the first one, is silent on the three issues of investment, competition policy and government procurement, while laying down the modalities for negotiations on the fourth component related to trade facilitation.