The Hindu Business Line : Stalemate on farm issues stalling liberalisation of global trade

AS agriculture continues to be at the core of the Doha Development Round of multilateral trade talks, the continued stalemate in resolving the differences between developed and developing countries on farm issue risks is stalling the ushering-in of further liberalisation of global trade in goods and services.

Even at the recently concluded General Council meeting of the WTO in Geneva, India made this point at the meeting of the Trade Negotiations Committee on July 28, highlighting its vexatious concern about attempts being made by developed countries to introduce elements of additional progressivity into the formula of tariff reduction in agriculture.

Sources in the Government told Business Line that the July 2004 Framework calls for reduction of higher tariffs by higher rates keeping in view the differences in tariff structures.

This objective is lucidly and faithfully reflected in the G-20 proposal through a tiered formula.

The sources said that at the Geneva TNC meeting, the US sought its counter-cyclical payments and Step II programmes to be made part of the new blue box payments for certain crops by which it could continue to provide direct payments to farmers under production-limiting programmes that are exempt from reduction commitments.

If this is not responded to, it seeks further market access to its farm products such as wheat, soyabean, maize, almond and dry fruits (dry grapes).

The European Union (EU), on the other hand, made it clear that it was in favour of elimination of all agricultural export subsidies if others also take equivalent action to eliminate their system of export support, and stressed the need to address both cuts and disciplines in trade-distorting domestic support.

However, the EU is categorical that it is less ambitious in tariff cuts on farm products as it is giving away both in export subsidy and domestic support.

With both the EU and the US having entrenched positions in agricultural negotiations for framing modalities, India should do a reality check as to whether it is in the right alliance on this important issue as it has neither the resources to provide massive subsidy and hefty domestic support to its subsistence farmers nor the means to reduce tariff levels for its farm goods, as cheap imports will directly impinge upon the livelihood concerns of millions of its farmers, trade experts said.

This is also the reason why India said in the TNC that the level of ambition should not be linked to flexibilities being demanded by developed countries on agriculture.

On the second important issue of non-agricultural market access (NAMA), New Delhi did not share the Chair's perception of a convergence on the issue of the tariff formula as the differences over cuts in unbound tariffs at low applied rates or at high applied rates remain unresolved.

On services, India voiced its "acute disappointment" at the current state of the services agenda. It said that it was filing an ambitious revised offer in services, opening up a number of sectors in Mode 3 (commercial presence), which are of interest to the country's trading partners.

These include architectural services, integrated engineering, urban planning and landscaping services, distribution services excluding retail trade and additional areas in construction and tourism, and a host of other areas including in educational, management, and life insurance services.

India has also made further improvement in its substantial Mode 4 (movement of natural persons) offer, including for contractual service suppliers and independent professionals.

As India expands sectoral coverage for these categories, as well as aligned definitional parameters with the proposals presented by it along with other partners, the country is optimistic that its offer would provide "momentum" to the services negotiations.

The sources said that this would spur India's trading partners to reciprocate with improved offers in sectors and modes of interest to the country.

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