Lamy throws the ball in US court, defends EU position

New Delhi, Jan 21 | Updated: Jan 22 2007, 06:37am hrs
Following US trade representative Susan Schwabs comments that substance and content and not artificial deadlines would be able to break the deadlock in Doha negotiations, WTO director-general Pascal Lamy came searching for support in India.

Addressing a dinner meeting, organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) last week, Lamy said, The US will only extend the deadline of its fast track authority if something concrete is on the table.

After expressing this view, the WTO chief said India should be a little more aggressive in farm negotiation and should be less defensive about its stance. India, being a net exporter, has registered excellent growth. He citied products in which India was competitive in the exportssugar, cotton, rice, wheat and wheat products, organic food and flowers. India also has interests in availing benefits under geographical indications (GIs) for many of its products.

Lamys suggestions could not get any significant response from the audience as some of his observations were misplaced. India is not a major exporter of cotton, it rather imports cotton. In fact, India was a net importer of wheat in 2006.

WTO Deadlock

India is comfortably placed in regard to sugar and rice. Global prices, however, remain depressed, making exports not remunerative enough
As expected, Lamy being a former EU trade negotiator, missed no chance in defending the European position
He, however, admitted that reduction in TDS was imperative by the US and
the EU to address the concerns of developing countries

In regard of sugar and rice, India is, of course, now comfortably placed. Global prices, however, remain depressed, making exports not remunerative enough. Regarding flowers, he had the idea when the Ficci secretary general, Amit Mitra welcoming him with a bouquet said: This made of indigenous orchids and imported flowers

Lamys desperate attempts could easily be gauged when he repetitively said that India had an overall interest in pushing the trade talks. India has interests cutting across entire Doha agenda and has potential in value-added agro products, he said and added that if it were to balance its position well, it would not prevent India from ensuring livelihood security to farmers as the current round is a development round.

As expected, Lamy being a former EU trade negotiator, missed no chance in defending the European position. He said EU was biting the bullet on subsides. Saying that the EU has already committed subsidy reduction in its new Common Agriculture Policy, he threw the ball in the US court to follow the suit.

On being pointed out that the EU provides $ 2 per cow per day in subsidy, he said that this figure was not the actual money paid to farmersthe figure includes tariff equivalents and the actual money paid to farmers as found in OECD documents.

We are dealing with only trade-distorting subsidies (TDS). TDS is only a part of the total subsidies. In the US, TDS is one-third of the total subsidies, he said.

Lamy said that the the EU was likely to reduce its tariff barriers, if the US takes initiative on cutting subsidies. The US does not have any problem in reducing its farm subsidies, except for sugar, he said When asked about extension of GIs to Basmati rice from India and Pakistan, the WTO director-general said , Yes there is a case for extension of GIs to products other than wines and spirits, but all developing countries are not one on this issue, particularly some countries in Latin America like Argentina.

On discussions on defining and streamlining the Rules of Origin, Lamy said , This is not part of the Doha agenda and hence no progress has been made. The problem remains with one or two countries like Australia. He, however, admitted that reduction in TDS was imperative by the US and the EU to address the concerns of the developing countries.