Finance News

India campaigns to include main demands in WTO deal

With the crucial July 21-26 mini-ministerial meeting of the World Trade Organisation (WTO) delicately poised, commerce and industry minister Kamal Nath on Friday launched India's campaign to ensure that the country's key demands are taken on board.

Kicking off the groundwork, Nath met WTO director general Pascal Lamy and impressed upon the him that India's core concerns—protecting its infant industries and the livelihood of its poor farmers—be taken on board for a successful conclusion of the Doha Round talks. Nath had on Wednesday warned that India has the full option to walk out of the talks if these core interests are not included in the deal.

To make sure that the unity of the developing countries is intact, Nath would also on Friday attend a G-33 meeting and thereafter meet Alfredo Chiaradia, secretary of state of commerce and international relations of Argentina, and Celso Amorim, foreign minister of Brazil.

Ministers from over 30 countries would gather at the WTO headquarters in Geneva to prevent the collapse of the Doha Round, launched in 2001, by resolving the differences between developed and developing countries. According to WTO, a global trade liberalisation deal could add around $100 billion annually to the world economy.

The developing nations are demanding that the rich countries drastically reduce their "trade distorting" farm subsidies, while the developed countries are asking for more market access in the developing world to their goods.

The ministers' meeting would work towards finalising the main elements to clinch a deal soon.

Nath has pointed out to the WTO that in order to adequately protect the livelihood of India's subsistence farmers, around 20% of the total agricultural tariff lines need to be placed under special products (SPs or farm products that are subjected to minimum or no duty cuts). India has also insisted the special safeguard mechanism (SSM) was not negotiable. Currently, SSM available to protect the farm sector in developing countries continues to be weaker than a similar mechanism available to rich countries, experts said.

On industrial goods, Nath indicated that India would not compromise on protecting its infant industries. Also, India would be unwilling to negotiate on market opening clauses like anti-concentration and sectorals. Sectors like auto, textiles and chemicals are likely to be severely hurt if these clauses are included in the final agreement, as it will result in cheaper imports from developed nations. While the UPA government would be facing the trust vote on July 21 and 22, CPI(M) has put pressure on the government saying India should reject the revised WTO texts as they are not in the country's favour.

Meanwhile, in a bid to take forward the Doha Round talks, the US has indicated its willingness to make "enormous cuts" in its farm subsidies. The developing countries want the US to reduce its "trade-distorting" farm subsidies from $55 billion to around $13-16 billion. As for the other key player, the European Union, while French President Nicolas Sarkozy recently said that the conditions are not right to strike a deal this time, EU trade commissioner Peter Mandelson said the likelihood of a breakthrough in the talks was "improving".

Meanwhile, Brazil, also a leader of the developing world, is facing difficulties from its aggressive farm sector that has demanded that Brazil should breakaway from India and China to ensure that its agricultural business gains in strength. Brazil's agri-exports were worth over $58 billion last year.