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G. Srinivasan

Cancun , Sept. 9

AS the fifth ministerial of the World Trade Organisation (WTO) is all set to take off on Wednesday, India made a last-ditch effort to rope in like-minded countries to its demand for substantial and drastic reduction in the farm subsidies, domestic support and export credit of advanced countries such as the European Union and the US.

Talking to reporters at a late night briefing here, the Union Commerce and Industry Minister, Mr Arun Jaitley, said that he had bilateral talks with the US Trade Representative, Mr Robert Zoellick, and the European Union Trade Commissioner, Mr Pascal Lamy.

Mr Jaitley said that he impressed upon them that ``any outcome short of complete phasing out of export subsidies on all products is a clear violation of the Doha mandate. The recent EU-US framework agreement establishes permitted level of subsidies through export credit which was ``large step backwards which would just allow the US to re-bind its Uruguay Round commitments of export subsidies.''

Mr Jaitley reiterated that the framework failed to provide effective market access in products of export interest to developing countries, which typically attract tariff peaks and high tariffs.

``Now, we have to contend with high-trade-distorting tariffs, less trade-distorting tariffs and non-tariffs'' for the farm products of developing countries, he added.

The Commerce Secretary, Mr Dipak Chatterjee, said that the framework evidently had one objective — ``to pry open markets in developing countries for subsidised exports from developed countries.''

He said insistence on a common framework on tariff reductions for developed and developing countries alike is fundamentally flawed as it disregards the disparities in their farm sector.

``We believe that for developing countries, transparency and participatory approach in procedure and the WTO decision-making is extremely important'', Mr Jaitley said adding that a collective approach to evolve guidelines and procedures for the preparatory process as well as for the conduct of ministerial conference to ensure full participation of developing countries was also discussed.

He said the Group of 10 also discussed the need to restore the priority to the outstanding Uruguay Round implementation issues, which should be resolved ``in a pre-designated timeframe.''

Mr Jaitley also met leaders from 20 poor countries to coordinate their approach during the five-day talks in support of their call for deeper cuts in high tariffs and subsidies doled out by the EU and other industrialised nations.

Mr Jaitley made it clear that there could be no progress on other issues at Cancun such as lowering barriers to industrial goods and deciding whether to pursue negotiations on the so-called Singapore issues, particularly on investment rules, which the EU and Japan have made a key priority but which is opposed by India and most other developing countries, "unless there is momentum in agriculture subsidy cut by rich".

However, Mr Jaitley said that India would show flexibility in the other two components of Singapore issue, such as trade facilitation and transparency in government procurement, if that could help in addressing the concerns in other areas such as agriculture and industrial tariffs.

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