The Hindu Business Line : Draft modalities on agriculture and non-farm market access ‘not balanced’

New Delhi, July 21 The draft modalities for agriculture and non-agricultural market access (NAMA) or industrial tariffs need to be “balanced” as the latter does not appear to be in the interests of the developing countries as they would be subject to steeper tariff cuts.

Official sources told Business Line here that the draft modalities for agriculture released in Geneva on July 17 are “overall balanced text” primarily because it accepted G-20 threshold limit for developed and developing countries with the cuts proposed are more or less nearer to the G-20 position.

The sources said that “we asked for 75 per cent cuts in overall trade-distorting support of the developed countries domestic farm support and we have got 66 to 73 per cent.”

In market access, developing countries said that they would not take more than 36 per cent in the overall average tariff cuts and the suggested one in the draft modalities is 36-40 per cent. In special products, they accepted G-33 formulations. So, “from our viewpoint in terms of market access, it is almost roughly where our position is and we accepted it”, the sources said. While the text on agriculture modalities is “a good basis for negotiations, as they say, the devil is in the details” and “we may have to do the hard work later”. For instance, in special products, developed countries could take two-third deviations and they take only one-third cut and get away with fewer cuts.

Co-efficient

The sources expressed disappointment at the “imbalance” in the NAMA text stating that the text proposed co-efficient of 8 to 9 which gives a duty cut of 30 per cent in the case of advanced countries. But in the case of developing countries, the suggested co-efficient of 19 to 23 gives a duty cut of 70 per cent, which is less than full reciprocity sought by the developing world.

While countries that undertook unilateral liberalisation over the years might not be overly upset with this tariff cut proposals in NAMA, most of the developing countries would be affected and India could not afford to dilute the development content of the Round. Hence it would “not break ranks” with other developing countries in order to ensure the unity and solidarity of the developing world, the sources added.

They contended that whereas the developed countries are taking 50-51 per cent cuts in agriculture, in industrial tariffs they would be taking only 31 per cent cut. But, the developing countries would be taking 70 per cent cut in industrial tariffs, thereby reflecting the asymmetry in cuts.

Asked about the immediate fallout of the texts on agriculture and NAMA modalities for negotiations, the sources said that “we will be doing what is known in WTO parlance the number crunching exercise in the next couple of days”. They added that all these tariff cuts would take eight years to come and official exercise as to the nitty-gritty of what would be the tariff cuts, say in the case of palm oil, pepper and other items being imported would be done to demystify the implications of the latest texts.