North should not grudge large, emerging economies: Nath

Zee News, July 29, 2008

In a sharp retort to comments by the US that countries like India and China were disrupting the ongoing WTO trade talks, India on Monday said the developed countries should not grudge the fact developing nations are large and emerging economies.

“Some developed countries have said large and emerging countries were creating problem in the talks. We are large I cannot help that we are emerging, nobody should grudge that,” Commerce and Industry Minister Kamal Nath said after coming from an WTO meeting here.

The ongoing meeting of 30 key trade ministers here has spilled over to the second week with negotiators making some progress in talks on Friday to open markets and cut subsidies in agriculture and industrial goods.

As per the draft presented by WTO chief Pascal Lamy on Friday, only 12 per cent of agricultural tariff lines can be Special Products and within this, five per cent would take zero cut in duties.

Nath said when the so-called package was announced on Friday India has not agreed on all elements of the package.

India has serious concerns on overall trade distorting support (OTDS) and the non-mentioning of the cotton.

“I was hoping that since the text was presented on Friday, in the next three days there would have been some movement on OTDS, SSM clause, which is a clause for 90 countries,” Nath added.

The US today blamed India and China for creating hurdles in the ongoing WTO talks here and said Doha trade talks have been thrown into the “gravest jeopardy” by these two countries which are not willing to open their markets for more imports.

“Their (India’s and China’s) actions have thrown the entire Doha Round — the Doha Development Round – into the gravest jeopardy in its nearly seven-year life,” a US trade official told ministers at ongoing WTO meeting.

US Trade Representative Susan Schwab too voiced her frustration against the stand taken by developing economies.

Nath however said he is still optimistic about the conclusion of the round and hoped that there would be some movement on the OTDS and special safeguard mechanism.

“Let me give you the good news that negotiations are still going on,” he said.

Earlier US Trade Representative Susan Schwab said the US was concerned about the direction a couple of countries were taking in the negotiations. In a veiled attack on India and China, Schwab said, “We are in a situation where one country is not part to the original agreement and one country is backtracking on its commitment made to us on Friday”.

She said negotiators had reached a “real path forward” last Friday to a successful conclusion of the Doha Development round.

“Six out of the seven in the leadership group embraced the outcome of Friday, which represented a delicate balance,” she said.

“This is a real risk as these countries were advocating selectively reopening the package. This is a threat to the delicate balance and I am concerned it will jeopardise the outcome of this round,” she said adding that ” unfortunately a couple of players have decided that the balance can rebounce in their own favour in 1-2 items”.

Retorting to Schwab’s comments, Nath said there was no doubt in anybody’s mind that out of the group of seven, India did not agree to the proposals brought out by WTO Chief Pascal Lamy on Friday.

India is being marginalised

India is getting increasingly marginalised at the WTO mini-ministerial meet at Geneva as the country’s Commerce Minister was not allowed to negotiate “freely” and there was pressure from rich nations to open Indian markets, a senior official of CUTS said on Monday.

Quoting Commerce and Industry Minister Kamal Nath as saying “I am not allowed to negotiate”, Secretary General of CUTS, a consumer policy research and advocacy group, Pradeep S Mehta said most of the India’s concerns on market access in agriculture and industry have either been rejected or diluted.

“This is symptomatic of the negotiating style which the rich follow to brow beat the poor, just overwhelm otherwise call them spoilsports,” Mehta said.

He said Indian Minister has asserted that the talks were becoming more like advancing the interests of prosperous classes while ignoring those whose livelihood security depends crucially on trade and trade-related matters.

Cotton subsidies ‘deal breakers’

Issues like cotton subsidies and safeguard mechanism for import surges still remain the main obstacles for clinching the Doha agreement for opening the world market even as ongoing WTO Ministerial talks entered second week here on Monday.

“Cotton subsidies, special safeguard mechanism and sectorals are the three major deal breakers that are still on the table,” a senior Indian official said.

He said not much movement has been made on cotton subsidies, with the US refusing to engage with the Cotton 4 group of West African cotton producers — Benin, Burkina Faso, Chad and Mali.

The Hong Kong Ministerial declaration had stated that the cotton subsidies should be “eliminated more ambitiously and expeditiously” by the US than its Overall Trade Distorting Support (OTDS).

“This means that if the US agrees to cut its OTDS by 70 per cent, it would be required to slash its cotton subdisies by 75 per cent in two years from the date of implementation of a global trade deal,” the official said.

At present, the US doles out subsidies of 3.8 billion dollars to its estimated 24,800 cotton farmers.

Cotton is a crucial issue not only for the African continent but also for India and Brazil, the official said, adding that if the US cuts its cotton subsidies, farmers in these countries would get better price for their produce.

The subsidies lead to over production in the US, taking away export markets and business from millions of farmers in Africa. India is a major producer, consumer and exporter of cotton and has deep interests in this issue.

The five-day meeting of 30 key trade ministers has spilled over to the second week with negotiators making some progress in talks to open markets and cut subsidies in agriculture and industrial goods.

New draft texts are expected to come out later in the day in agriculture and NAMA (non-agricultural market access).

“During the negotiations this week, India has shown considerable flexibility with the objective of enabling the negotiations to move ahead towards conclusion,” India said in its statement to the Trade Negotiating Committee today.

India is also pushing for more space to protect its farm products from tariff cuts. As per the latest Lamy draft, only 12 per cent of agricultural tariff lines can be Special Products and within this, five per cent would take zero cut in duties. But the 12 per cent as a whole would still have an average overall cut of 11 per cent.

The official said the overall cut of 11 per cent is “a little to high and this has to be lowered”.

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