Financial Daily from THE HINDU group of publications
Friday, Sep 12, 2003
Agri-Biz & Commodities - WTO
India for rectifying distortions in world farm trade
Cancun , Sept. 11
INDIA on Wednesday said the commitment by the developed countries to rectify distortion in world agriculture through their hefty subsidy policies to their farmers alone hold the key to resolving the differences among the WTO members.
In a forcible statement at the opening day of the plenary session here, the Indian Commerce and Industry Minister, Mr Arun Jaitley, said the plight of farmers in developing countries was directly linked to the level and kind of subsidy extended to the farming sector in the advanced countries.
"It is no surprise that over the past few years, agricultural exports from developing countries to developed countries grew at just half the rate they did to other developing countries," Mr Jaitley said, adding "the agriculture subsidies provided by OECD countries are more than six times what they spend on official development assistance for developing countries."
OECD governments support sugar producers at the rate of $6.4 billion annually a sum nearly equal to all developing country exports. Subsidies to cotton grower in a developed country totalled $3.7 billion last year, which is thrice that country's foreign aid to Africa. While the net effect of subsidising agriculture in advanced countries at the expense of products of the relatively poor in developing countries was to aggravate global income inequalities, developing countries on the other hand were being asked to liberalise their agriculture against all canons of "equity, justice and fair play", he said.
Mr Jaitley said it would be difficult to agree to negotiations which could potentially place at high risk the very livelihood of 650 million people in India, who are solely dependent on agriculture, he said. "The legitimate concerns of billions of farmers in developing countries for whom agriculture means survival and not commercial operation, cannot be sacrificed to subserve agri-business profits of a few millions elsewhere sustained through $1 billion subsidies each day in the OECD countries," Mr.Jaitley asserted.
He also sought policy space to deal with sensitive products in agriculture taking due note of their development needs, including rural development and food security and livelihood concerns. "India reiterates that in no circumstances can it accept any form of harmonisation of tariffs in agriculture or obligations to create and expand tariff quotas," Mr Jaitley said.
On market access negotiations for non-agricultural products (industrial tariffs), Mr Jaitley noted that suggestion for mandatory harmonisation and elimination of tariffs would be most iniquitous to the developing countries. Besides, being at different stages of development, developing countries did not have capacities to undertake binding obligations in all the seven sectors proposed for tariff elimination. He also deplored the short shrift accorded to the development dimension envisaged in the Doha Work Programme. The draft Cancun Ministerial was grossly inadequate on implementation issues and would severely affect the interests of developing countries in agriculture, industrial tariffs and Singapore issues.
Referring to the Singapore issues, Mr Jaitley said, "We are not convinced of the appropriateness of taking a decision on modalities (for negotiations) as it does not give us any idea of the substance and direction of obligations that agreements in this area may require us to undertake".
On India's interests in the services negotiations, he said that for the developing countries the balance of benefits in the negotiations would accrue to the extent to which their service providers were allowed to supply services in important overseas markets either from remote locations or through temporary movement of natural persons.
He said developing countries took part in multilateralism with a view to economic betterment and if this expectation needs to be fulfilled, the system must acknowledge that the developing world cannot afford to travel at the same speed as developed countries to achieve gains. As such, he said, obligations to be undertaken by the developing countries should not arise out of coercion.
Later briefing mediapersons here, Mr Jaitley hoped that the G-21 text would also be considered by the Chairman of the Working Group to evolve modalities on agriculture negotiations as another Group of 22 countries forming the Strategic Products (SP) and Special Safeguard Mechanism (SMS) alliance has also forwarded its proposals.
With two similar groups expressing their common views, the Chairman might take into account their viewpoints too, even as most of the contents of the EU-US framework are incorporated into the draft Cancun text.
In a general statement at plenary here, the USTR, Mr Robert Zoellick said the principal task ahead was to develop frameworks for liberalising trade in agriculture and goods that manage to combine the promise of ambition with flexibilities that some members would need.
This is interpreted as being supportive of G-21 stance on agriculture. He further noted that "we want to eliminate export subsidies and we are willing to cut domestic supports and subsidies and tariffs dramatically if others join us" which meant that EU should also fall in line.
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