Developing nations to benefit from WTO: Lamy

Commodity Online, August 13, 2008

Pascal Lamy, Director General, World Trade Organisation (WTO) has submitted detailed statistics on how developing countries could get a lion’s share of gains from scheduled commitments made at ministerial meeting in Geneva last month.

However, he admitted that differences remained between US and India on key issues. He was addressing a CUTS-FICCI conference on ‘Global Partnership or Development: Where do we stand and where to go’ here.

“I am disappointed but not discouraged,” Mr Lamy, here on a two-day visit, said. Commerce Minister Kamal Nath, on the other hand, maintained that there were still major issues to be sorted out and called upon developed countries to return to the negotiating table in a spirit of sacrifice to bolster the economies of the poor nations.

In what was the WTO chief’s first interface with Indian industry after the stalled mini-Ministerial meeting, Mr Lamy said “If the current round had come to a successful conclusion last month, import tariffs would have come down by half, resulting in a saving of $150 billion. The developing countries would have contributed a third of the sacrifice, but benefited to the extent of two thirds by way of savings.”

He, however, said although figures did not reveal which country would gain by how much, adherence to the scheduled commitments would have brought down trade distorting subsidies by the US to $14.5 billion a year “Without the current round, this amount could reach a whopping US$ 48 billion a year,” he emphasised. Lamy said, while it is agreed that increase in agriculture productivity was vital in developing countries, it was important to note that trade could play a better role in bringing this about.

Refuting this, Mr Kamal Nath maintained that the Doha Round was not about increasing the prosperity of the developed world but reducing the poverty of the developing countries. “Unless this round sees healthy economies in the developing world, there would be no market access for the developed countries,” he said. Because of subsidies given by the rich nations to their own farmers, there had been no investments in agriculture in the developing countries, he added.

On the issue of SSM for agriculture, Mr Kamal Nath said if the 40 per cent cap in import surge was accepted as proposed by the US, “by the time imports reach that level, my farmers would have committed suicide.”

Later, at an interactive session with CEOs of Indian industry, Mr Lamy said his message to Indian officials and industry heads was three fold. Firstly, there was need to look carefully at what was on the table. Secondly, one needed to listen to all WTO members to make an effort to see the round was concluded.

Lastly, one needed to try and understand each other a bit more on the political level.

In this context, Kamal Nath agreed there was a lot on the table. “But what’s on the table is not on my plate. And there is not enough on the table to put on everybody’s plate.”

Stating that 17 out of 20 items listed for negotiations at last month’s failed talks at Geneva had been cleared, Mr Lamy said at the end of his day long talks with Indian officials and industry heads, differences remained between India and the US over special safeguard mechanism (SSM) to protect domestic agriculture from import surges.

With India being the first country the WTO chief was visiting to try and bridge the gaps for a successful conclusion of the Doha Round of talks, Commerce and Industry Minister, Mr Kamal Nath, said India held the same position it did last month. “I have reiterated that the concerns of livelihood of farmers and the agriculture sector remain, not only for India but for 100 developing countries,” the Minister underlined, agreeing that there was a need to find a solution. He requested Mr Lamy to convey India’s concerns during his visit to the US next week

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