India wants fresh WTO drafts, seeks fair deal

The Financial Express, July 03, 2008

India has pointed out to the World Trade Organisation (WTO) that for a successful conclusion of the Doha Round negotiations, it is important to release a revised negotiation text—each on agriculture and industrial goods—ahead of the crucial meeting of a group of ministers on July 21. The revised negotiation text shouldincorporate the sensitivities of developing countries, including India, it has said.

Officials close to the negotiation said if the respective Chairs of agriculture and non-agricultural market access (Nama or industrial goods) do not bring out a revised negotiation text by July 10, there is a likelihood of WTO director-general Pascal Lamy intervening and coming out with a ‘Lamy draft’ to prevent the collapse of the Round. Lamy’s predecessor Arthur Dunkel had come out with a draft (Dunkel draft) to save the talks in the Uruguay Round. A Lamy draft can then become the benchmark for future negotiations, in case the talks fizzle out this time, sources said.

New Delhi also warned once again that if the revised texts do not ensure protection of India’s poor farmers and infant and small & medium industries, it would not be party to any deal. “If we feel that the deal is not fair, then there would be no agreement. It is important that the final deal must result in correction of structural flaws in global trade. It should ensure fair trade and not just free trade,” a senior government official said.

Sources said commerce and industry minister Kamal Nath had written to Lamy regarding the need for fresh drafts that specifically contain the demands of developing countries, including India. He had said last week that since a large number of gaps still remain, there was a lot of work that needs to be done to help the group of ministers meeting arrive at some convergence.

One of the demands of India and its industry is that the anti-concentration clause must be removed from the draft Nama text. As per the Anti-Concentration Clause, sensitive tariff lines that would not be subject to tariff reduction cannot be concentrated in one particular sector.

India Inc has alleged that the inclusion of anti-concentration clause in the Nama text was done at the behest of a few developed countries with a complete disregard to development dimension of Doha Round. They said the clause would hurt SMEs in India as several sensitive sectorswould then be vulnerable to tariff reductions. Pradeep S Mehta, trade expert and secretary general, CUTS International, said India must also ask for an anti-concentration clause in the list of sensitive products that the rich countries would be seeking a carve out for.

What has also irked several countries including India is the recent new US Farm Bill that has hiked subsidies for American farmers, at a time when developing countries have been demanding that the US must drastically cut its “trade distorting” agricultural subsidies. US instead wants the developing countries to liberalise their industrial goods markets by reducing duties. “The US has no manoeuvrability now, especially since they would find it very difficult to reduce their farm subsidies due to the Farm Bill,” an official said.

Trade experts are not very optimistic about a successful conclusion of the Doha Round in the immediate future. Nagesh Kumar, director-general, Research and Information System for Developing Countries, New Delhi, said, “The position of all the countries are very entrenched and is unlikely to change in the last minute. “

Though it is clear that Lamy was trying his best for an early conclusion of the deal, it was important that he must be able to persuade the US to deliver by reducing their huge farm subsidies and giving more market access to goods and services from developing countries, Kumar said….

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