US hardens stand on Doha Round

Written by Rituparna Bhuyan | New Delhi | Updated: Jan 1 2010, 06:30am hrs
The US rhetoric on the WTOs Doha Round has become shriller. The two fresh nominees of the Barack Obama administration to the multilateral body have promised to be more abrasive than their predecessors as they told a designated Senate panel that Washington should not sign the Doha deal unless advanced developing countries like India, China and Brazil commit market access over and above all offers on the table.

The nominees think that unless the applied tariffs on industrial goods in countries like India, China and Brazil come down significantly, the US would not gain any real market access. The differential between bound and applied tariffs is virtually the only area where countries like India are on a better wicket than the west.

Although India is not very keen to conclude a deal that wont bring significant benefits to it, the US intransigence might still be worrisome as some analysts think that the fresh US demands could practically exert a great deal of pressure on them.

In their presentation to the US Senate committee on finance, Michael Punke and Islam Siddiqui, nominated by Obama to be chief negotiators for industrial goods and farm products respectively at the WTO, have basically taken the line that US does not need to sign the deal unless its interests are fully safeguarded.

Replying to a query on how US interests will be secured in the Doha Round, Punke said, I agree that industrial and manufactured goods represent a vital sector of our economy. I also agree that US exports are faced with relatively high tariffs in many markets, including in key advanced developing countries like China, Brazil and India. If confirmed, I will commit to seeking a strong reciprocal market access outcome for industrial and manufactured goods as part of any Doha Round Agreement. Siddiqui toed a similar line in front of the senators. If confirmed, I will insist on a deal that achieves significant new opportunities for US exporters, including American farmers and ranchers, he said.

But Indian trade negotiators see the two nominees statements as a complete breach of the Doha mandate and the negotiations that have taken place in the last eight years. They arent amused, not in the least because politically sensitive farmer interests are being threatened.

If US want additional market access, then lets meet for a ministerial and negotiate. The Doha mandate and the Hong Kong declarations are very clear that developed countries will have to give more. How can they ask for additional market access, over and above what has been negotiated in the past eight years, asked a trade diplomat. If this attitude persists, then it will be difficult to conclude the Round by 2010.Trade experts see the responses of the US nominees as sweeteners for the senators, who will ultimately approve a global trade deal for US.

We must remember that while US will cut down their applied tariffs if the Doha Round is inked, India will cut only its bound customs tariffs, which are higher than the applied tariffs. Hence, US wants additional market access in emerging economies like India through mechanisms like sectorals. This way, India will have to cut its applied industrial tariffs, leading to more market access, said Biswajit Dhar, director general of RIS.

Sectorals are a proposed mechanism through which a group of countries will completely eliminate customs duties in 14 industrial sectors. For India, it means completely eliminating duties in chemicals, industrial machinery, electronics and enhanced healthcare equipment.

Developing countries, including India, have been maintaining that as per the Hong Kong ministerial declaration, one should participate in sectorals only on a voluntary basis. India believes that sectorals will lead to an inverted duty structure duty on raw material will be more than that of finished products and also harm the SMEs.