Post-Cancun: Third World Alliance On Farm Fragile, Says Expert

New Delhi, Nov 13: | Updated: Nov 14 2003, 05:30am hrs
The G-20 alliance of developing countries in agriculture is fragile and does not rest on solid commonalty of interest, feels noted trade economist Arvind Panagariya.

Delivering a lecture on Indias options after the unsuccessful Cancun ministerial meet of the World Trade Organisation (WTO) organised by the Confederation of Indian Industry, the professor of economics at the University of Maryland said that India should think about what its strategy should be in case the alliance weakens.

He said that India and Brazils interests were quite different as the former wanted liberalisation of agriculture and the latter believed in protectionism. China was somewhere between the two, Mr Panagariya said, adding that South Africa could be bought off easily, especially if its trade minister was offered the post of the next director general of WTO.

Indias interest lies in getting rid of subsidies offered by the OECD (Organisation for Economic Cooperation and Development) countries so that it could have access to their markets, Mr Panagariya said. India should also offer liberalisation of its own agriculture and resort to safeguards wherever required, he advised.

In the area of non-agriculture products, Mr Panagariya said that it was in Indias interest to back the US proposal of total tariff elimination. This will help India deal with the problems of tariff peaks and tariff escalations practiced by developed countries. Tariff peaks are abnormally high imposed on certain products of interest to developing countries while tariff escalation refers to increase in tariff levels with increase in level of value addition of a product.

The problem which India could face due to increasing number of regional and bilateral agreements can also be countered by the proposal for tariff elimination.

Mr Panagariya said instead of agreeing to the deadline of 2015 as suggested by the US, India could propose to bring down tariffs to 8 per cent by 2015 and eliminate tariffs by 2025.