Nath, Lamy call for restarting WTO talks

Financial Express, August 13, 2008

In a renewed bid to conclude a global trade deal by this year-end, Indian commerce and industry minister Kamal Nath and World Trade Organisation (WTO) director general Pascal Lamy on Tuesday called for resumption of Doha Development Round negotiations of the WTO.

Nath, however, warned that any progress in the talks would be difficult unless “revival of the weakest (economies)” forms its core, instead of “survival of the fittest (economies).”

The move for restarting the talks comes a fortnight after it collapsed mainly due to differences between India and the US over safeguards to protect poor farmers in developing countries from import surges of agricultural products. However, India said the gains that the developing countries have gained in the talks so far should be retained.

Speaking at a conference organised by a consumer advocacy NGO, the Consumer Unity & Trust Society International, or CUTS and the Federation of Indian Chambers of Commerce and Industry (Ficci), Nath said, “India is committed to the multilateral system but when we resume, I urge you to come to the table looking not for what you can get, but what you can give.”

He said it was important for a global trade deal to ensure healthy economies in developing countries. Among those who attended the conference were representatives from the US, the UK, Brazil, Japan, Canada and Uruguay.

He said it was harsh on the part of the rich nations to ask developing countries to give something in return for reducing their trade-distorting farm subsidies that had flawed the global trading system in the first place.

Speaking on the occasion, Lamy had said that if WTO fails to reach a deal, the US overall trade distorting subsidies could reach a whopping $48 billion dollars a year from the ceiling of $14.5 billion that the Bush administration had offered at the Geneva Mini-Ministerial Meeting. Lamy is here on a two-day visit to seek India’s help to re-start the talks. He said after the talks were suspended, several WTO Member countries have asked him to look at the possibilities of keeping the talks alive.

Later in the day, he held discussions with Prime Minister Manmohan Singh too. Lamy would be proceeding to the US, where he would hold talks with US Trade Representative Susan Schwab.

Lamy 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 has gained the upper hand and most significant among the outstanding issues was the issue of special safeguards mechanism (SSM) for agriculture.

The SSM enables developing countries like India to hike agricultural tariffs to protect the livelihood of its hundreds of millions of poor farmers from import surges and price declines of sensitive farm products.

Lamy said if the Doha Round is concluded successfully, it can result in worldwide import tariffs being reduced by 50%, which in turn would result in savings of $150 billion a year in tariffs. Two-third of these tariff cuts would be expected from the rich nations. This means developing countries would benefit to that extent and gain more market access.

On SSM, Lamy said, there were two diverging views which proved impossible to reconcile in the talks last month—one, developing countries need a safety net against a surge in imports to protect their farming system; and two, like all safeguards under the WTO rules, SSM should be subject to certain conditions and limitations in order to ensure that it does not hamper normal trade flows and that it should not be misused. “That was the main political difference,” he said.

Nath said India could not have accepted a remedy against import surges with several strings attached. He said developed countries had already been using a similar mechanism for the last 14 years, Nath said.

He said India wanted a “reasonable figure (of SSM) and “it must have a reasonable remedy.” Nath said he was ready to negotiate “numbers”, he could “not negotiate attitude and mindset.”

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