‘It’s unacceptable that EU spirits are punished’

‘It’s unacceptable that EU spirits are punished’
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First Published: Wed, Mar 07 2007. 03 04 AM IST
Updated: Wed, Mar 07 2007. 03 04 AM IST
Describing herself as a farmer’s wife, European Union agriculture commissioner Mariann Fischer Boel made it a point to visit farmers on Piyala and Jatola in Uttar Pradesh on her way back from the Taj Mahal in Agra to get a ‘first-hand feel’ of the condition of the Indian farmer. Though the size of the farms at around eight acres compare poorly with her own farm size of 700 acres, Boel said she was struck by the healthy crops and good irrigation in the fields. Boel, who is on her maiden visit to India, spoke exclusively to Monica Gupta
The last few weeks have seen hectic parleys between India, Brazil, the US and the EU on WTO. What is the sense you are getting on the direction in which these talks are headed?
The clear sense is that there seems to be a convergence between the views of India and the EU. We are saying clearly that the US has to deliver on cuts in domestic support because the US has been focusing its domestic support on five main commodities (wheat, rice, corn, soya and sugar) of which some of them are of huge importance to India. They (US) have to be realistic and forthcoming on their contribution to a positive round.
Since the US is not willing to give numbers (specify the reduction in the farm support), are you still optimistic about the WTO talks?
Since July last year we have actually continued the technical discussions at the level of senior officials and we had been able to explain, for example, on our treatment of sensitive products, which I would not say is parallel to your special products (items such as tea, pepper). We hope the US will come with figures on cuts in domestic support. That is the stumbling block.
There are concerns that India could be isolated in agriculture if the US, the EU and Brazil converge?
From the very beginning, commerce and industry minister Kamal Nath has been stressing continuously the importance of special products for India. He had not missed any opportunity so we need to find a decent solution to treatment of special products.
Do you share the view of some in the EU who say that India needs to clarify its position regarding providing market access in even the special products?
It is quite clear that the treatment of special products and sensitive products does not mean that you can completely avoid increased market access in these areas. We have said that even if we want certain products to be treated as sensitive, it will give market access in those areas. You cannot protect completely, you have to reduce tariffs or introduce tariff rate quotas (lower tariffs for a certain volume of imports). India has to realize that keeping 20% of its tariff lines as special products is a very high percentage and the ambition has to be lowered.
You are accompanied by a huge business delegation in the food processing sector. What are you looking for?
We are looking at new business opportunities and possibility of seeing whether its possible to find new approach to export and import into India from Europe and on the other hand to see some possibilities for joint ventures in India. It’s a two-way street and of course to explore to see how difficult or how easy it is to start trading with India.
Do you find the investment climate conducive in India?
India exports agriculture products worth €1.3 billion whereas Europe has only managed to export to India €200 million. So therefore, there should be room for improvement in our trade. It is clear that we are looking at the obstacles as well where there are difficulties and the most obvious one is of course on the surplus taxation that has been put on wines and spirits. I was very disappointed to see that this problem was not solved in the Budget announced a few days ago.
It is unacceptable for Europe that our spirits will be punished with a special high import tariff of 500% while our wines are taxed at 200-280%. We are both members of the WTO and therefore expect India to follow the ruling laid down by the WTO agreement.
What is the next course of action for the EU?
There is a huge pressure on us from some of the European companies in the wines and spirits segment and of course we are considering the various tools that are available to us within the WTO and we are considering seriously whether to raise a WTO panel. But no decision has been taken yet. We will be under pressure and we will discuss in Europe what our next step will be.
Indian industry says there are restrictions on some agriculture exports from India?
All the discussion on tariffs is discussed within the ongoing WTO negotiations. Hope that we would be able to find a balanced solution within a short period of time. We have another two months available. We have clearly indicated that if we get a balanced deal in agriculture, NAMA (Non Agricultural Market Access) and services, we would be willing to lower our tariffs in agriculture on an average of about 50% which is very close to the G-20 proposal. We are willing to phase out all our export subsidies by 2013; what we need now is to see that the US comes on board because we have seen absolutely nothing from them. Their (US) initial idea on cutting tariffs suggested 90% reduction in tariffs in the top end. Countries like India would have had to cut 60% in the upper band and I know Kamal Nath has said that 40% was the absolute maximum that India could do and so this proposal (of the US) goes through the roof. Let’s try to find a common ground on the WTO and we are stressing on this. Agriculture is not a win situation either for India or for Europe, which is why we need good results in NAMA and services and a cut in domestic support by the US.
What is the progress on the bilateral trade and investment pact with India?
We hope to have a final discussion in Europe soon so that we can begin negotiations with India—the agreement will be of mutual benefit. It is important that India realizes that Europe will be a complementary trade flow. We are not in the market to spoil the possibility of survival of your subsistence farmers. We cater to a completely different segment catering to high-quality products and value-added products.
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First Published: Wed, Mar 07 2007. 03 04 AM IST
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