WTO: India opposes US, EU bid to hold small-group talks

Taking on India and China, developed members including the US, the EU and Japan have demanded that the talks on tariff reduction on industrial goods should take place plurilaterally between a few like-minded countries.

India, backed by some other developing countries, however, maintained that negotiations on industrial goods (NAMA) should take place within the multilateral framework based on an earlier discussed text, while China said that even if plurilateral talks happen, the concept of special & differential treatment (S&DT) for developing countries should be maintained.

Both India and China have been vocal in demanding the privileges for developing countries at the World Trade Organisation (WTO) negotiations.

“The NAMA talks are an integral part of the on-going Doha Round of multilateral trade talks. There can be no question of holding plurilateral talks in the area within the WTO framework,” a government official told BusinessLine .

The discussions took place at the recent meeting of the NAMA group at the WTO. This was the first meeting after the WTO’s ministerial meeting in Nairobi last December where a number of developed countries had called for an end to the on-going Doha round of negotiations and launch of a fresh round.

It is important for India to ensure that the WTO does not become a forum for plurilateral pacts as any country which is not part of those pacts would become less competitive in the markets of countries that are part of the pact since fellow members would get preferential access at lower tariffs.

“The hallmark of the WTO is the most favoured nation treatment that members accord to each other which means that all members are to be treated equally,” the official said. Brazil, Malaysia and Bolivia, too, stressed that multilateral talks on industrial goods should continue.

Alluding to India, China and South Africa, the US said there has been no change in positions of members that expect multilateral negotiations will lead to the US cutting tariffs while demanding for themselves flexibilities and no binding commitments, according to another official in know of the talks.

Plurilateral talks It said that the success of plurilateral talks could be gauged from the completion of the IT Agreement-II (of which India is not a part) and the pact on environmental goods being negotiated.

The EU and Japan, too, expressed their preference for plurilateral talks, with the EU stating that the multilateral talks cannot progress on the basis that it bears obligations while its competitors enjoy flexibilities.

The US and the EU, for long, have been trying to push large developing countries including India, China and South Africa, to take on fresh commitments to reduce the gap between the applied tariff rates (present duties) on their industrial goods and the bound tariff (levels above which tariffs can’t be increased because of past commitments).

However, these countries have been insisting that the WTO rules mandate tariff cuts from bound rates and S&DT for developing countries which mean that their tariff reduction obligation has to be much lower than that of developed countries.

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