India`s no to draft duty-cut treaty

Business Standard, October 03, 2007

By Rituparna Bhuyan

India, along with 100 developing countries, has not accepted the latest provisions in the draft agreement on non-agricultural market access, a key component of the Doha round of world trade talks.

Observers say the development could mean the Doha Round negotiations would be prolonged for another two years.

Although no specific deadline has been set, the G4 group (India, Brazil, European Union and United States) had earlier said they would try to wrap up negotiations by December this year.

A paper, submitted by South Africa to the World Trade Organisation recently, on behalf of 100 countries, mentions that the current proposals in the draft agreement non-agricultural market access (which deals with industrial goods) prepared by Canadian Ambassador Don Stephenson, are ‘not acceptable’.

“The proposals are not in-sync with the development agenda of the Doha Round of World Trade talks,” said an Indian government official.

As per the new formula, proposed by Stephenson, developing countries like India will have to cut their duties by 65 per cent, while for developed countries like United States, the cut will be between 45 to 50 per cent.

From an Indian point of view, this would mean cutting its average applied duties (which are actual rate of tariffs), from the current level of 14 to 15 per cent to 12 to 13 per cent.

“We have not rejected the draft. But the provisions in it are not acceptable to the developing countries, it does not follow the less than full reciprocity mandate of the Doha Round. Accoeding to this mandate, developed countries will have to carry out deeper cut in tariffs than developing countries,” the Indian government official added.

Observers said India, which is seen as a key developing country in global trade talks, is with the other developing countries on the issue, so as to pressure the developed countries to accede to their demands in other areas like Agriculture, talks on which are also stuck.

The paper, while not accepting the draft proposals on industrial goods, has maintained that agriculture related issues remain critical to the Doha Round.

“From an Indian point of view, duty cut on industrial goods is not a major issue, as we have already cut them down over the years. But developing countries in Africa and South America find the cut too steep to execute. Also, we have defensive interests in Agriculture and unless there is a commitment on issues related to it, why should we concede on industrial goods negotiations,” a government official said.

Analysts maintain that the Doha Round negotiations are likely to continue till elections in the USA get over in November, 2008.

“Moreover, there is a possibility of election in India as well. Unless these political events get completed, Doha round will not move forward,” said Pradeep Mehta, secretary general of civil activist group CUTS International.

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