India for fresh WTO talks if flaws are removed: Kamal Nath

The Hindu, August 12, 2008

India on Tuesday indicated to the World Trade Organisation (WTO) its readiness for another go at reaching a world trade agreement provided the flaws in multilateral rules are effectively addressed and removed.

“If the basis of the round [Doha negotiations initiated seven years ago] has to see a change in its very objectives, it would be a tough going for global trade integration,” Commerce and Industry Minister Kamal Nath said while sharing the dais with WTO Director-General Pascal Lamy at a CUTS-FICCI organised conference on global development goals.

Responding to Mr. Lamy’s remarks, Mr. Nath unequivocally declared that “revival of the weakest” and “not survival of the fittest” should form the core of the negotiations for reaching an agreement.

Otherwise, he warned that the renewed attempt being made by Mr. Lamy and others to bring the talks back on track could meet the fate of the recently abandoned talks in Geneva.

While India, he said, was keen on resumption of multilateral negotiations, “it cannot be expected to accept the flaws — the price developing countries are being asked to pay for developed countries to cut subsidies,” he said.

Later in the day, Mr. Lamy met Prime Minister Manmohan Singh. He is understood to have sought a clear indication whether India wanted to move ahead in the troubled Doha negotiations or take a pause.

The meeting was significant as the WTO chief has renewed efforts to bridge differences, mainly on the issue of the safeguard for agriculture in the developing countries, between India and the U.S. following the failure of the Geneva talks a fortnight ago on the issue, known as the Special Safeguard Mechanism in WTO parlance.

“My simple message here in Delhi and next week in Washington is that (members should) look carefully at what is on the table and not on results, listen to all WTO members and efforts should be to conclude the talks,” Mr. Lamy had said earlier.

After getting the feedback from New Delhi based on consultations with the Prime Minister and the Commerce Minister, industry and the NGOs, Mr. Lamy will visit Washington next week.

Mr. Lamy said after his meetings with Dr. Singh and Mr. Nath: “The good news is there may be still a possibility to move this forward and conclude negotiations within the time-frame, that is end-2008.”

Speaking at the CUTS-FICCI meet, Mr. Lamy had observed that if the WTO could not reach a deal, the U.S. agricultural trade distorting subsidies could see a sharp jump to over $48 billion a year from a ceiling of $14.5 billion, which the Bush administration had offered at the Geneva Mini-Ministerial Meeting.

If the Round was not to conclude, “the U.S. will be able to spend much more (on subsidies),” Mr. Lamy said.

The WTO chief, who is India within two weeks of the collapse of Geneva talks to seek India’s help for reviving the negotiations, said the success of the Doha Round could result in worldwide duty cuts of $150 billion a year.

Further, he said, two-third of these cuts would be expected from the rich nations. In other words, this would be the level of market access for the developing countries.

Mr. Lamy, however, acknowledged that the current food crisis is also a result of the lack of investment in the developing countries. “One of the reasons for decline in production is the trade distorting subsidies and high tariffs in the rich countries,” he added.

Mr. Nath also underlined that the devil lies in the details of the proposals being put on the negotiating table.

“If the EU says we are going to reduce tariffs for airplanes, what does it mean for India and Africa,” he asked during the interaction attended among others by several diplomats from Africa.

Signalling to the American negotiators that India would fully leverage the issue of high cotton subsidies in the negotiations, Mr. Nath said: “I want to import cotton from Africa. But if there is 40 per cent subsidy in the U.S., my industry is not going to buy it from Africa.”

Significantly, Mr. Nath received support from the Secretary-General of the United Nations Conference on Trade and Development, Supachai Panitchpakdi, who said, “I would have thought cotton would have become a goodwill case…cotton must be tackled seriously.” Dwelling on the reasons for failure of the negotiations between 30 trade ministers, Mr. Nath said India could not have accepted a remedy against import surges with several strings attached.

Differences over the level of Special Safeguard Mechanism between the U.S. and India proved to be a deal-breaker in Geneva, he said.

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