Agri Business

No consensus yet on WTO farm tariff cuts

Amiti Sen New Delhi | Updated on January 24, 2018

wto

India wants tiered formula that will entail steeper cuts for higher tariffs

No consensus emerged amongst key World Trade Organisation (WTO) members such as India, the US and EU on the formula for reducing tariffs on farm products at the agriculture committee meeting early this week in Geneva.

Deadline may escape

This raises further doubts about the attainability of the July-end deadline for agreeing on a work programme for the next WTO Ministerial meeting in Nairobi in December and sealing a trade deal there.

“Most developing countries including India supported the draft text of 2008 which suggests a tiered formula for tariff reduction. This means that higher tariffs would be subjected to higher cuts while lower tariffs would be subjected to lower cuts,” a Government official told BusinessLine.

EU, US differ

WTO members had informally agreed on most provisions of a draft text on agriculture at a meeting of trade ministers in 2008, but it could not be formally sealed as negotiations on the overall Doha Round trade pact collapsed because of differences in some other areas including industrial goods. The EU, Norway and Canada, however, want to move completely away from the 2008 text.

The EU said that it wanted a tariff reduction formula similar to the one used in the Uruguay Round negotiations (1986-94). In that formula, members would have to bring down average tariffs by a fixed percentage; but they would will have the flexibility to much make lower cuts on individual items as long as higher cuts on other items maintains the average agreed tariff levels.

“What the EU wants will result in perpetuation of the tariff peaks (unusual high tariffs) for certain agriculture products that are prevailing in developed country markets, although their average tariffs are low. This is what India is fighting against,” the official said.

The US said that it preferred a simple average cut, which means that all tariffs would be subject to the same levels of reduction irrespective of whether they were high or low.

India’s representative at the meeting said that those members who were opposing the tiered formula should come out and specify what they had against it.

Indian subsidies

“The tiered formula is the fairest formula. Cuts in the highest tariff bands should be the most,” the official said.

There has also been no consensus yet on the permanent solution to India’s problem of treating its food procurement subsidies.

WTO members are trying to pick up pieces of the collapsed Doha Round (launched in 2001) to see if a less ambitious trade pact could be reached in the Nairobi meet.

“As things stand I see very little prospect of delivering the substantive, meaningful work programme which we have been aiming towards. That is the reality today. The question is whether we can change this situation by the end of July — and that is up to you,” WTO Director-General Roberto Azevedo said addressing all members in a meeting on Wednesday.

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Published on June 18, 2015
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