Lamy picks up threads of failed Doha talks

Business Line, August 13, 2008

The World Trade Organisation Director-General, Mr Pascal Lamy, met the Prime Minister, Dr Manmohan Singh, on Tuesday and is reported to have sought a clear signal on whether India wants to move ahead or take a pause in the ongoing trade liberalisation talks.

The Geneva talks failed on the issue of Special Safeguard Mechanism (SSM). Negotiations for a global agreement on industrial tariff cuts and reducing agricultural subsidies have dragged for seven years since the launch of the Doha Round in 2001.

Mr Lamy is on a visit to India to bridge differences mainly on the issue of SSM.

The mechanism has been designed to safeguard the farmers from abrupt import surge and price declines by permitting an additional safeguard duty over and above the bound rate.

“The members of WTO were disappointed at the collapse of the talks at Geneva but not discouraged. There is still a possibility to move forward and have a deal and my message in Delhi and Washington is that members should look carefully at what is on the table and not on results, listen to all WTO members and try to understand people at a political level to conclude the talks,” Mr Lamy said after an interaction with industry members at FICCI and CII.

Observing that the negotiations under the Doha round could be concluded early, he said the successful completion would annually bring down tariffs by $150 billion.

When asked if he saw the deal being concluded by next year, Mr Lamy said, “I am just an instrument. I am not in the debating business but running the business. It is the determination of the members which will drive a mandate.”

He, however, said if the round was not completed, trade distorting subsidies would rise to $48 billion annually. “What is on the table should remain on the table and not let it slip,” he said.

Mr Lamy will be visiting Washington next week.

He said while in purely technical terms the issues agreed upon by the negotiating members would be sufficient for drafting the scheduled commitments, the political reality gained the upper hand and a few issues need to be wrapped up, most significantly the issue of safeguards mechanism for agriculture.

The Commerce and Industry Minister, Mr Kamal Nath, doggedly maintained that the Doha Round is not about increasing the prosperity of the developed world but reducing the poverty of the developing countries.

“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.

“Unless this round sees healthy economies in the developing world, there would be no market access for the developed countries,” he said.

He added that the truth is that because of the subsidies given by the rich nations, there have been no investments in agriculture in the developing countries.

On the issue of SSM for agriculture, Mr Nath said if developing countries were to reduce tariff and if there is huge import surge, the remedy lay in capping the surge at 40 per cent.

He urged all WTO members to come to the negotiating table, not looking for what they can get but at what they can give.

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