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NEW DELHI, Nov. 13

THE Federation of Indian Chambers of Commerce & Industry (FICCI) has welcomed the Government's decision to set up a Group of Ministers (GoM) on WTO matters, which would expedite the country's decision-making process on the important multilateral trade-related issues.

With less than 10 months to go before the Fifth Ministerial Conference of the World Trade Organisation (WTO) in Cancun (Mexico), this was a much-needed and timely step towards safeguarding the national interest, FICCI said. In its submission to the GoM, FICCI suggested that the GoM should critically examine India's negotiating position on agriculture on a priority basis, particularly in view of the slow progress on farm negotiations in WTO during the past one year.

According to FICCI, failure to live up to the March 31, 2003 deadline would have serious repercussions not only on the farm talks but for the overall negotiations as well. Hence, the Indian delegation to the Sydney mini-Ministerial, scheduled for November 14-15, should put increased pressure on the countries concerned to carry forward the Doha mandate, the chamber said.

"Evidently, at this point of time the level and speed of the reductions in farm subsidies remain at the centre of negotiations.

Therefore, one of our negotiating objectives should be establishment of a clear timetable for the phasing-out of all forms of export subsidies and for the significant reductions of trade distorting domestic support in the developed countries," FICCI said.

Similarly, in special and differential provisions for developing and least developed countries, FICCI pointed out, there had been hardly any achievement on the aspects of operationalisation of the `best endeavour' clauses. It was unfortunate that instead of moving in the direction of the Doha mandate, the timeline of July 31, 2002 had to be pushed back to December 31, 2002.

"Another area of vital significance is negotiations on non-agricultural products where we have to ensure that substantial benefits accrue to the developing nations in terms of greater access to industrial countries' markets", the chamber said. It was important in this regard to forcefully and convincingly establish that in the Uruguay Round tariff cuts undertaken by developing countries were really substantial.

"Also, we have to push for integration of the less than full reciprocity concept in reduction commitments", the chamber said.

One crucial aspect of these negotiations would be the approach to be used for tariff reductions.

Many developed countries have come out in favour of `zero-for-zero' approach, where tariffs in a particular sector are brought down to zero level by all member-countries.

In view of the fact that the domestic industry did not enjoy a level playing field and suffered from a number of structural constraints, FICCI said that such an approach would be detrimental to the country's interests and only exacerbate the existing imbalances.

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