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G. Srinivasan

Cancun , Sept 12

THE fifth World Trade Organisation (WTO) ministerial meet appeared headed for a stalemate with two groups, in which India plays a prominent part, hardening their stance.

While a coalition of 21 is firm on the phase-out of farm subsidies by the advanced countries, another group is firmly opposed to the inclusion of Singapore issues on the third day today. The Commerce and Industry Minister, Mr Arun Jaitley, together with the Trade Ministers of G-21 held a series of talks as arranged by the WTO's facilitator with the US and the European Union on Thursday.

Mr Jaitley said the idea was that the EU-US framework and the one by the G-21 would have to be discussed thoroughly before the Cancun Ministerial arrives at a decision on the modalities for launching negotiations on agriculture agreement by the end of 2004.

The Singapore Minister, Mr George Yeo Yong-Bon, who acts as a facilitator on agriculture, would release on his own responsibility a new draft framework proposal for the agricultural negotiating modalities.

Meanwhile, Latin American countries too voiced their vexation on the costly agricultural subsidy policy of advanced countries, demanding action rather than words since slashing these subsidies would enable their farmers to compete fairly on the global market.

Even as the G-21 was unrelenting in its demand for drastic reduction in domestic support, elimination of subsidies and enhanced access market to their farm produce, the Deputy US Trade Representative, Mr Peter Allgeier, wondered as to "the unifying principle there among those countries".

The EU too cautioned the alliance of G-21 against false expectations, questioning whether the new negotiating alliance could hold till the end.

As if to remove the doubt of advanced countries, Turkey too joined the G-21 with Latin American countries voicing their like-minded concerns with G-21.

On the Singapore issues, India opened a new window in coalition-building by associating itself with the group of developing countries, including Malaysia, Egypt, Nigeria, Zambia, Bangladesh and China by firmly rejecting the inclusion of these new issues such as investment, competition, transparency in Government procurement and trade facilitation.

The Malayasian Minister of International Trade and Industry, Ms Rafidah Aziz, told newspersons here that even the agriculture issue figured as far back as in 1987 at the Uruguay Round and a formal pact on this was yet to emerge and as such there was no justification for rushing to add new issues on the agenda.

She also dismissed the EU's demand for investment issue, stating that when China was not a member of WTO, the very same countries funnelled massive foreign direct investment into China and now they wanted multilateral investment agreement as if such a pact would ensure FDI flows to the signatories.

She said that the group of over 70 members would oppose efforts to launch negotiations on modalities an instead seek to refer these talks back to Geneva for further clarification.

She further said that opposition to launching negotiations on Singapore issues should not be an excuse to stall progress on agriculture.

Even as these two vital agriculture and Singapore issues appear to hold back progress in the Cancun Ministerial which is to wind up its deliberations by Sunday by thrashing out the specific approach — timetables, deadlines and framework — for wrapping up an agenda of lowering tariffs on agriculture, industrial goods and removing barriers to services exports and a host of other issues, efforts are on to clobber a face-saving formula so that mid-term review of the Doha Work Programme is not to end in a disaster.

This is all the more important now because as the Director General of the WTO, Dr Supachai Panitchpakdi, said that earlier projections of significant increase in world trade would not be met this year as "there is considerable uncertainty" about the world economic outlook.

He also did not subscribe to the view that some countries would quit the WTO over the agricultural issue because WTO negotiations seek to create a package that would benefit everyone involved.

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